Avanti Communications Share Discussion Threads

[sg31] 15/9/2007 19:29

The market likes short term plays,this does not fit into that category.The risks keep reducing and the value gets better.If the market misprices the company buy more shares.
The institutions may think the CEO is flakey but i dont.He has had a long term vision and he hates dilution.Everything he has promised so far has been delivered and he intends to stay with the company, If that is flakey i wish there was more of it about.
I have held since the screen media days and bought at £1.20 topped up at £1.60 and at £2.I love these long term plays.I will continue to hold.Keep the faith.

[woozle1] 11/9/2007 08:45

Any ideas why this is so weak. The company got the debt funding; the chances of launch failure look very remote if it's going up with US astronauts; new money raised at the time of the debt facility. I'm baffled by the weakness?? Any thoughts. I do know that many institutions think that the CEO is flakey but evenso they should be able to look through to the underlying story.

W

[petergoddard] 10/9/2007 17:30

Worth a look around:

[currypasty] 10/9/2007 14:14

RNS Number:5251D
Avanti Communications Group Plc
10 September 2007

Date: 10 September 2007
On behalf of: Avanti Communications Group plc ("Avanti" or "the Company")
Embargoed until: 0700hrs

Avanti Communications Group plc
* Secures satellite launch services

Avanti Communications Group plc (AIM: AVN), the satellite operator, is pleased
to announce it has signed a contract to purchase launch services for the launch
of its first satellite, HYLAS, on schedule and within budget from Space
Exploration Technologies Corporation, USA ("SpaceX").

A launch window enabling the satellite to be launched between March and December
2009 has been booked. The satellite will be launched from the SpaceX launch
facility on the US Air Force Range at Cape Canaveral, Florida. Avanti has also
secured options for further launches.

Avanti's Chief Executive, David Williams, said:

"I am pleased to report the completion of another significant project milestone.
The SpaceX Falcon 9 launch vehicles that we will use are also planned for use to
transport US astronauts to the International Space Station, so for us to secure
a service of this quality within the budget is pleasing. SpaceX share our
vision of changing the speed and economics of space services so we look forward
to working together."

[terryebby] 10/9/2007 09:43

under budget as well - wonder how much by - AVN is already stuffed to the gunnels with cash

[anusol] 10/9/2007 08:00

Nice anouncement - must be a pretty reliable rocket if they send humans up in it too. So very very good chance of getting that satellite into space without any hitches.

[illiswilgig] 05/9/2007 00:43

Why pick on SSY? It doesn't have to be a quoted company! There is a rumour that at least one of the private owned space industry companies is up for sale in the next few months,

Illiswilgig

[sg31] 31/8/2007 22:49

The french can sod off they won't get my shares.

[terryebby] 31/8/2007 09:11

Telegraph business section has a story today saying that Thales of France is looking to acquire a small UK sopace business. How many of those are there ????

[sg31] 28/8/2007 21:46

Do not mention break-up and HYLAS in the same sentence.

[sirlurkalot] 27/8/2007 21:57

I've just come across the 6 June 07 Avanti Comms note from house broker ABN. Here's the front page:

Stargazing
The demerger of Avanti Communications creates a focused satellite networks business. It is at a developmental stage, but the launch of its HYLAS satellite in 2009 should create significant value. We initiate coverage with a 310p price target. Buy.

Key forecasts
FY05A FY06A FY07F FY08F FY09F
Revenue (£m) 3.67 9.72 2.39 7.26 9.29
EBITDA (£m) 1.88 6.21 -2.85 1.25 2.21
Reported PTP (£m) 1.05 6.26 -3.14 -2.72 -3.29
Normalised PTP (£m) 1.05 6.26 -3.14 -2.72 -3.29
Normalised EPS (p) 9.35 27.6 -12.2 -10.2 -12.2
Dividend per share (p) 0.00 0.00 0.00 0.00 0.00
Dividend yield (%) 0.00 0.00 0.00 0.00 0.00
Normalised PE (x) 24.5 8.30 n/m n/m n/m
EV/EBITDA (x) 28.5 6.91 n/m 58.2 40.4
EV/invested capital (x) 6.50 1.72 1.97 1.73 1.62
ROIC - WACC (%) 22.1 40.1 -17.9 -6.93 -5.94
Accounting Standard: Local GAAP
Source: Company data, ABN AMRO forecasts
year to Jun, fully diluted

Clean structure
The demerger of Avanti Communications from the Screenmedia business has created a single-focus satellite services company, eliminating the inherent volatility and cyclicality of the Screenmedia activities., with an in-perpetuity orbital licence and £24m of EU funding behind its inaugural satellite, due for launch in 1Q 2009. We estimate the HYLAS satellite alone is worth more than the current enterprise value of the group, and there is scope for additional investments to drive up the value. We initiate coverage with a 310p price target and a Buy recommendation.

Asset backing
The group has an in-perpetuity orbital licence, £24m of EU funding behind its inaugural satellite and it is on the verge of securing the debt required to fund the launch (and insurance cover) of HYLAS in 1Q 2009. There is scope to add further satellites to broaden its geographic coverage and leverage the value of its orbital licence.

Significant potential value
We estimate the HYLAS satellite alone is worth 271p, based on a DCF model. This is an early-stage business, with the associated risk profile, and it will be highly leveraged prior to the initial satellite launch. But given a low failure rate for satellite launches, and strong underlying demand for satellite capacity (fuelled by high definitition TV broadcast), we believe HYLAS can generate significant returns for investors. We have a break-up value of 310p for Avanti and a Buy recommendation.

[terryebby] 10/8/2007 17:53

The text is below. Also I see that AVN has outperformed the FTSE 100 by 20% over a month - clearly there is support for the stock, maybe the JV strategy is bearing fruit ?


Avanti's longer-term launch appeal

Spun out of Avanti Screenmedia in April, Avanti Communications offers investors exposure to increasing demand for satellite capacity. Satellite data services demand is set to grow by 250 per cent by 2015, and HDTV requires ten times the capacity of standard TV. For such a risky venture, the company, which is adding spectrum licences, offers limited downside risk.

Avanti has the licence and enough spectrum to put 15 satellites in space. The first satellite should be in position to cover Europe in the first quarter of 2009 and is expected to cost around £82 million. The group's satellite, Hylas, uses new technology for the satellite industry but it is already in use in other sectors. That means it will take longer to build and test but it will be able to deliver more data than conventional satellites because it will use Ka band spectrum. This is because it uses small spot beams rather than one large beam for the whole region.

The £32 million debt needed to fund the first satellite is in place and this has been achieved without issuing any dilutive warrants or convertibles to the lenders. Because of this, the interest charge is 10.5 per cent over base rate. The loan is repayable in 30 months and one of the lenders is Avanti's biggest shareholder, Caledonia Investment. At the same time, Avanti raised £2 million via a share placing at 200p a share.

Chief executive David Williams has decided to initially offer individual transponders on the satellite for as little as €1 million (£672,000) per year in order to encourage pre-sales. In reality, proposals are being sent to potential buyers in the range of €1.2 million and €1.4 million. Because Avanti's satellite costs less than rivals', margins are still high. Williams believes that he could get as much as €2 million per transponder but he wants to attract early pre-sales in order to finance more satellites. The current proposals under discussion are already worth £110 million over the 15-year life of the satellite. Avanti wants to pre-sell one-quarter of capacity by the launch.

Williams does not want to issue more shares at what he sees as a low share price. He reckons that once insurance is finalised and other technological and launch milestones are achieved the shares will be worth many times their current price. Instead, Avanti will build up revenues from pre-sales and seek joint venture partners to take advantage of its two new spectrum licences that cover India, the Middle East and Africa. These licences also include military spectrum.

Avanti has revenue-generating network services and consultancy businesses. In the past, these have been profitable – although the 2005/6 profit of £6.26 million was flattered by a one-off credit of £5 million. The cost base has increased in the past year as Avanti builds up its space expertise, which is why the company is estimated to have lost more than £3 million in the year to June 2007. Unsurprisingly, it is expected to lose money for the next two years.

However, any downside is limited by insurance that is being arranged. If the satellite blows up on the launch pad the insurers will pay £80 million to the company. When the debt is repaid that should leave the shareholders with the equivalent of 170p a share. That's nearly four-fifths of the current share price.

If the satellite does get off the ground, and there is a 97 per cent chance it will, according to insurance broker Marsh, that alone will make Avanti an attractive investment. Avanti

[sirlurkalot] 10/8/2007 12:16

Terry,

Can you post the text of it here?

[terryebby] 10/8/2007 11:15

nice Buy note from les copeland in Growth Company in my inbox today rating avn a Buy

[zcaprd7] 07/8/2007 17:54

Interesting there are no comments about the Screen Media business after what happened today - these guys were the ones running the screen media business not that long ago?

[argy2] 05/8/2007 17:29

Nice buy Friday....first of many hopefully?

[rapier686] 05/8/2007 16:46

I've put some comments in reply to a post of SirL's here:

[jelignite] 04/8/2007 02:22

ty rapier, wish I could help by capture the interview, separate the audio and run through a voice recog software, sorry dont have the knowhow, only seen this on csi, thank you very much, good weekend all

[sirlurkalot] 03/8/2007 14:18

D'you mean you typed it out yourself by hand? If so please don't go to the trouble of typing it for me! I just thought you'd found somewhere on the web where the whole thing was already typed out. I've listened to the whole interview and don't really need it in writing, but I just thought if it could be found somewhere I wouldn't mind having it. So please don't go to any trouble for me on this!

[rapier686] 03/8/2007 12:39

It doesn't take as long to transcribe as one might fear. It would be a bit long to post here but I'll fill those 4 minutes out to something a bit more comprehensive and email a copy to your yahoo address.