Avanti Communications Share Discussion Threads

[tychee100] 05/6/2016 19:16

Hi weatherman, I agree with your post and believe this company will be a great British success story given time. I think Elrico and co have self importance issues and they really believe their snide comments will have any bearing on the share price. I look forward to next year for the launch of H4 and hopefully some pre contracts during the build up. Its very obvious this company will prosper and will still be here for many years to come. Its a shame posters dont research winnies ventures before spreadibg his word.

[my retirement fund] 05/6/2016 18:56

This will become insolvent and in PLC form will cease to be able to raise further funds through equity sales. It there for will be restructured and incorporated in another format. Existing equity investors will suffer a 100% loss whilst debt investors will probably eventually be able to share meaningfully in a private equity restructure.

[weatherman] 05/6/2016 18:05

Care to justify that statement in simple terms for those of us who haven't got your superior financial skills Elrico?

Now I know Edison has made some howlers in the past on forecasts - I think Synchronica being one, a company that treated share issues like confetti.

But according to the Edison note, which looks realistic to me, capital expenditure on H3/4 is nearly over with $120m in place for the final payments. Then over the next 12 months 2016/17 non capex cash outflow is forecast to be $10m - with a $72m additional facility in place. We'll get an indication of whether this is achievable in early July I hope.

[elrico] 05/6/2016 17:18

If CEO Williams wants to apologise for trying to bully me, all he has to do is just that and perhaps I will behave.

[elrico] 05/6/2016 17:14

Seball - You need to distinguish the difference from advice and opinion. If I was of a similar mind to you i would tick you down for such a silly mistake....but I'm bigger than that....so lets keep to the facts. I offered an opinion, nothing in my post is advisory. OK, let's see who is right by Christmas, my target price is nearer 10/20p, what is your price and what price did you buy at? You assert AVN has the potential to make you all riche, and the down side is limited.....limited only to the fact it can't go below 0.

Weatherman - if your post is aimed at me, I believe I have made my position clear. But to avoid any doubt, I have never been a holder of AVN shares, I would never hold these, not even at a 1p because the odd's are in the bears favour and plain to anyone whom can read a balance sheet and treat AVN's creative accounting policy with the contempt it deserves.

I do wish someone would list these "top name companies" along with real revenues these will generate and over what period of time, because for the life of me, I can not and not a single bull has done this either.

[weatherman] 05/6/2016 16:54

There are some here who think that AVN is just another AIM con trick, like some notable examples of companies that have failed. There are others who have lost a lot of money on this stock, have a chip on their shoulder, and seek to get some back by going short. Personally, I didn't invest at the top because I thought it over priced - I only started taking a position at around 200p.

I attended Farnborough airshow a few years ago and it became clear that AVN was seen as a prime company in the Government's drive to grow the UK space sector, with support from UKSA and ESA. It is a serious company with top quality products and management. But as the new kid on the block it has struggled to gain traction. Now after a few years that traction seems to be coming through with a list of top name customers. There is risk in all investment, but the risk reward ratio is moving in the bulls favour - in my opinion.

[seball] 05/6/2016 15:35

Thanks for your advice but after doing my research this share is a cracking buy under £1. Let's see who is right in 6 month time. Wish you well in your investments and I'm sure we may have the same opinion on some share but not on this one. Cheers

[elrico] 05/6/2016 15:29

It is always said (by those that have ill timed their entry) "I have traded in and out and my exposure is small or limited." I put it to you that AVN will not see £1 again, in fact, I would say it is more likely go belly up, but not before William et al have made themselfs nice little feathered nests at your expense. No amount of negative ticks is going to change the direction of the share price, but I accept it's the ONLY PLEASURE you are likely to get from investing in AVN.

If I came across as patronising in my earlier post, weatherman, I apologise, that was not intended.

[seball] 05/6/2016 10:33

When does AVN reach cash break even
"One of the most-watched market developments in the commercial satellite telecommunications market today is these new high-throughput satellites’ effect on traditional satellite capacity.

Eutelsat on May 12 issued a profit and revenue warning that was based in part on evidence that competitors’ high-throughput satellites were taking future business away from Eutelsat’s conventional widebeam satellites for certain data applications. “Market demand for high-throughput Ka-band satellite capacity across EMEA [Europe, the Middle East and Africa] is strong,� Avanti said. “Avanti continues to secure new high-quality customers, particularly in the large telco and government sectors, where sales cycles are long but contract value is high. “This success is being driven by either migration from more expensive and lower-capability legacy systems, or the ability of high-quality Ka-band networks to grow the market for new satellite applications,� Avanti said.

Operators have said high-throughput satellites should be judged by a new set of key performance indicators, and that satellite fill rate is no longer a relevant metric. Avanti, for example, has said for the past year that its fleet is between 25 percent and 30 percent full – a level that conventional satellite operators would view as intolerable. For these businesses, a fill rate of 75 percent or higher is the goal."
hxxp://spacenews.com/avanti-promises-revenue-acceleration-new-ka-band-over-europe-by-june/

Edison in their report dated 4th February 2016 pick up on this point "An average fill rate of c 40% on HYLAS 1 and HYLAS 2 is needed for cash break-even before capex, which we expect to be achieved by the
end of FY18." (www.edisoninvestmentresearch.com/?ACT=18&ID=15771)

Edison again in their later report say that they believe that Hylas 3 expenditure is now mostly complete and that Hylas 4 is 80% complete. (

So if the analysts are correct AVN does not need 75% plus fill rates but only 40% for cashflow breakeven. On recent performance they should be achieving this capacity level in about 12 mths. The Edison report could not have anticipated a win of the size of the EE contract hence their later date.

By cashflow breakeven I mean that they are covering all outflows including interest. This is of course not suddenly achieved on day 365 as they will build towards it from day 1. The importance of this is that operational cash outflows should start dropping now and Q4 results should show this happening. If this is so the share price could move substantially from present levels as the market wakes up to the fact that AVN is actually disrupting the traditional market as it operates on an entirely different cost model.

[seball] 05/6/2016 00:50

Agree weatherman, Avanti at this price has the potential to make us all very rich. The downside is limited imo and upside significant. Good luck and thanks for your input.

[weatherman] 04/6/2016 21:13

Your concern is touching Elrico - so far I have lost a few hundred pounds on AVN having bought and sold on several occasions, and now my exposure is small. But the upside is potentially x5 to x10.

But there are people here with an axe to grind and are not being rational.

[bwakem] 04/6/2016 15:21

weatherman "once built and placed in orbit they can add lots of customers" - Why aren't they customers already? There's plenty of spare capacity.

[weatherman] 04/6/2016 14:46

DM - I don't think your model is an accurate reflection of the situation. AVN have spent 80% on two satellites sitting on the ground, several hundred million dollars worth. So their margins an capital employed are bound to look poor.

Secondly, once built and placed in orbit they can add lots of customers with little increase in costs. Clearly AVN is undercharging on width to increase customer usage quickly. Once more mature they may be able to increase prices.

The immediate question is not whether they can make a profit on capital employed, but whether they can cover the costs and interest payments to survive. You say the figure is $99m, the Edison note suggest $135m. Of course depreciation will impact on the profit statement, but it is a non-cash item and actual replacement is a long way off.

[dangersimpson2] 04/6/2016 12:57

The statement of cash flow positive with 40% is clearly not correct.

We know that based on H1 revenue of $31m which is 25-30% utilisation (I will pick 27% as midpoint) the full year, full utilisation revenue would be c$230m at current pricing.

Current GM is 40% but we can model utilisation & GM scenarios:


Gross Margin 30% 40% 50% 60% 70% 80%Utilisation 27% 19 25 31 37 43 50 30% 21 28 35 41 48 55 40% 28 37 46 55 64 74 50% 35 46 58 69 81 92 60% 41 55 69 83 97 110 70% 48 64 81 97 113 129 80% 55 74 92 110 129 147



They have $64m debt interest & $35m admin costs annually so cash flow break even is $99m.

40% utilisation wouldn't break even, even at 100% GM.

In reality they need to get their GM up to 60% and utilisation to 70% to break even.

This is also a highly optimistic model. It assumes no more pricing pressure, that they don't need the $71m extra (at which point cash flow break even would likely go to c$115m pa) and that none of the H1 16 $61m revenue was equipment sales.

They may break even at 40% utilisation after the launch of HLYAS 3&4 but that will be 2020 at the earliest imo.

[weatherman] 04/6/2016 07:55

AVN needs quarterly revenue of ~$35m to stop the cash outflow. They should do $35-40m in the last quarter to meet targets - in July we'll find out if that is accurate. This final quarterly revenue is possibly a little ahead of the game, but going forward the target is not that far away, forecast in the range $30-35m. In 2016-17 (next FY starting in 4 weeks) Edison's note gives a forecast of $126m, only about $10m behind the total cost of $135m of running the business - which is easily covered by the $71m additional facility headroom. If they meet the target in July, then shorters will be throwing in the towel and admitting the game is up.

[elrico] 03/6/2016 23:36

AA - whome sets the bonus targets? Which tin can has spare capacity...all of them.
I am correct and the share price suggests I am.

Weatherman - Williams is well clued up with the fiscal situation for sure, hence the reason he topped up with petty cash he must have found under his office desk. Have any bulls ever asked why, if Williams is so confident about AVN's future and the targets the company has set, why he did not throw a huge wad of is over-BLOATED salary at AVN INSTEAD OF PETTY CASH?

Ill tell you why he didn't...Williams realises his ramptastic RNs have less effect and nobody believes him anymore and he knows AVN is running out of cash, and fast.

[hpcg] 03/6/2016 17:43

No, originally they targeted Europe. H1 beams go over NW Europe and UK. H1 is still not full.

[weatherman] 03/6/2016 17:27

A few things have changed. Initially they were selling to Africa, which is proving a slow market. They are now targeting Europe more and are focussing on getting the sales through to completion, this change seems to have followed Walsh joining in an advisory capacity. So sales are picking up and I have greater confidence in the company meeting targets.

Williams is also experienced in providing finance to telecoms from a previous banking role, so I guess he understands the bond issue better than most.

The next FY starts 1 July 16 and they need to be making $30-35m per quarter to reduce the reliance upon spending borrowed money. They should do this in the final quarter of this FY.

[aa29] 03/6/2016 16:34

Sorry elrico, that has to be wrong.

The executive directors have been paid bonuses (I think, every year but one) so that must mean they've hit lots of targets !!

[elrico] 03/6/2016 16:00

I love an eternal optimist...when have AVN EVER HIT their own targets? NEVER!!

[seball] 03/6/2016 10:25

Letter by Craig Penfold from Avanti in today's Telegraph p15 extolling the virtues of Avanti's satellite broadband.
Nice to see some good PR in the national press.
GLA long termers.