Avanti Communications Share Discussion Threads

[deejay007] 01/8/2010 14:19

if eps is estimated at 1.12 in 2014 - what would that translate to share price (assuming no further dilution ?) TIA

[dolores123] 01/8/2010 14:05

Someuwin - is a 6 month time period for replacement of a failed Hylas 1 not optimistic considering a new sat will have to be built and a new launch date agreed?

Anyway the risk of launch failure seems very low considering the quality standards applied by Ariannespace who are launching their next arianne 5 on 4th August.

Cenkos target of £22.50 per share should surely attract more buyers at this level!

[someuwin] 01/8/2010 09:26

t1ps.com lists their top 14 bargain stocks.

...

3. Sorry if this is rather boring as the market cap is now c £350 million but at 470p Avanti Communications (AVN) - a stock held in the SF t1ps Growth Fund - is really very cheap whichever way you look at it. It is now funded to launch 3 satellites into space ( and fully insured if the worst happens which will only delay the programme by 6 months anyway). You value Avanti by discounting back the net cashflows these satellites will generate. That depends on how much capacity is sold and at what price. Use a model based on very conservative assumptions and this stock is worth £13 ( the lowest valuation in the market). But that model uses assumptions about sales prices which are already being beaten by forward sales Avanti is booking today. Use those prices and you head up to the £22.50 value of house broker Cenkos. My own view is that Avanti will do better still and this stock could therefore be worth £25. Excitement will mount as the first satellite is launched later this year. Remember those valuations are the Net Present Value of future cashflows ( i.e. what they are worth today). If you can buy at under 600p ( as you can now) you should do so and sit back and wait. I suspect after HYLAS 1 is launched you will never again be able to buy at less than 600p.

[chrissey] 31/7/2010 14:53

I know folks, I thought it was a humorous backdrop to the bb!

makes you think though, right? ;-)

[yorgi] 31/7/2010 08:31

DW is very focused Sg31 which played a big part in my decision to invest in the begining

[sg31] 30/7/2010 22:41

chrissey,

HYLAS 3 will have 8,280 MHz of capacity. It will cost £250m,

That is a pretty big barrier to entry.Only the big boys can play when the price to enter is that high.

They would need to have the rights to communications spectrum.......David Williams got the rights to the old British Satellite Broadcasting spectrum when they folded.There wasn't any other available at that time (I don't know if any more is available now).DW is very very astute he has had this planned for years and he spotted the opportunity when nobody else did.

[yorgi] 30/7/2010 22:34

Exactley Jimbo what a load of nonesense

[jimbo55] 30/7/2010 22:15

Avanti are launching a communications satellite; not a rocket!

How many people are going to knock up their own high-speed broadband satellite in their garden sheds?!!!

[chrissey] 30/7/2010 22:13

I'm with you then melody, just got to be careful not to dismis competitive threats too quick!

my real concern is the likelihood that the DIY rockets will get launched quicker than Hylas!

I'm right huh?

[melody9999] 30/7/2010 21:56

nah chrissey. maybe you should drop a note to the Directors and suggest they buy into the DIY satellite. might get our broadband services launched quicker! I can see 2000p on the horizon!

[chrissey] 30/7/2010 19:24

now I understand why we are under some price pressure.

I can see 200p on the horizon, I'm gonna sell monday!

[someuwin] 30/7/2010 17:54

Cenkos target £22.25!

Cenkos update today on AVN - taken from t1ps.com...


"Avanti Communications - PLACING & UPDATE; BUY. Price at 29 Jul 2010 (GBP) 470, Price Target (GBP) 2225

Avanti Communications has announced that it has successfully raised £70m at 430p. The funds will be used to initiate the development of HYLAS 3. £13m will be used to begin the manufacture of HYLAS 3. HYLAS 3 will have identical specifications to HYLAS 2 and will be assembled in parallel, leading to material efficiency and cost savings. The remaining £57m of the funds will be used to repay the PIK bond which was used to part finance HYLAS 1 and fees associated with the relocation of the HYLAS 2 assets. The repayment of the bond will enable management to secure advantageous financing from export credit agencies for HYLAS 3, similar to those achieved for the development of HYLAS 2. The commissioning of a third satellite will yet again create a step change in earnings and further reduce the risk profile of the business. We estimate that the net present value of the earnings from the three satellites using a 10% discount factor is over 2200p. Avanti will announce June FY10 results in September. However, these are likely to be eclipsed in significance by the successful launch of HYLAS 1. BUY.

HYLAS 3

HYLAS 3 will have 8,280 MHz of capacity. It will cost £250m, though it is expected that £15m will be saved by manufacturing it in parallel with HYLAS 2. Management are confident that the remaining financing will be sourced from further ECA funding and cashflows from HYLAS 1. We have assumed that HYLAS 3 achieves the same utilisation take-up and payment profile as HYLAS 2. HYLAS 3 should achieve utilisation rates of 90% over the course of five years beginning in FY13. Capacity will be sold at rates of £1,450 per MHz/month, rising at 10% per annum for the first three years and flat thereafter. Recent transactions suggest that this estimate is conservative. A target market has yet to be established for HYLAS 3 but Avanti's licenses on the geo-stationary orbit would enable it to deliver broadband in South America, Africa, Europe, the Middle East and India, each of which displays potential.

Financial forecast and valuation

This fundraising will become strongly earnings enhancing from FY13 onwards. Earnings in FY11 and FY12 will not be affected by the fundraising as we expect Avanti to establish its operations over this period. We expect our FY13 earnings forecast of 36p to remain unchanged. There is then a step change in earnings once HYLAS 3 is launched. We expect eps of 112p in FY14, 42% higher than our estimate prior to this forecast. A similar degree of earnings enhancement takes place thereafter. Our calculations of the discounted cashflows of the three satellites suggest a valuation of over 2200p per share. We would expect the shares to surpass 800p post launch of HYLAS 1."

[yorgi] 29/7/2010 09:34

As usual the share price does not seem to know which way to go but we are still edging up nearer to the 500p range

[naeclue] 28/7/2010 15:39

No mention of launch date at the meeting to approve the share issue, (although in the foot notes of the RNS it does say Q3 of 2010).

The entirely reliable (NOT) wikipedia has October 2010:



I can't find their source for the information, but hopefully we get a confirmed date in October before too long.

Just lots of waiting for now.....

[dolores123] 28/7/2010 15:08

Just bought another 2000 shares in my SIPP. Fingers crossed!!

[dolores123] 28/7/2010 14:51

I would hope to see say 525 to 575 following announcement of firm launch date.

[yorgi] 28/7/2010 13:14

Who knows !!! Although the share price seems to start off down each day is very slowly moving back up towards 500p......I'm quite sure as soon as we have definte date for launch we will push on up

[dolores123] 28/7/2010 13:09

SP edging back up - perhaps in anticipation of the announcement of a firm launch date for Hylas 1?

[sco77harris] 27/7/2010 19:40

dont know if this has been posted but here you go.

i was thinking about launch today and getting so excited because im just so sure we will rise.

[dolores123] 26/7/2010 15:16

A small tick up today.

[yorgi] 26/7/2010 01:21

Yes but after the launch is when we will see the real gains and now is the time to take advantage of the depressed share price

[melody9999] 25/7/2010 23:59

target price may be wishful thinking on current market and pre-launch, but the fact they have increased is I guess good news.

[someuwin] 23/7/2010 16:53

"Avanti Communications*– Increase Target Price from 1125p to at least 1300p

Since Avanti Communications* announced a £70 million placing at 430p per share on 12th July to enable it to initiate the procurement of a third satellite and re-domicile the assets of its second satellite, Hylas 2, offshore, shares in the satellite broadband company have fallen from in excess of 490p to 476p. Whilst still above the placing price, we believe this decline fails to recognise the benefits in terms of taxation and additional earnings potential, the announced moves should yield. With a share price of £13+ potentially justifiable an increase on a prior valuation of 1125p), at 476p we continue to view shares in Avanti Communications as a compelling buy..."

[yorgi] 23/7/2010 16:48

Yes Jeffian I think most people that post here are able to read a report all the way through to the end.....Well done on you

[jeffian] 23/7/2010 16:30

Did you get as far as this bit?!

8-)

"This research note cannot be regarded as impartial as GE&CR has been commissioned to produce it by Avanti Communications, it should be regarded as a marketing communication."