I'm not blind to the challenge faced by Avanti in an extremely difficult business environment, I just think that when you take that into account, they are actually progressing steadily.
I'm not blatantly peddling a negative agenda to buy in lower. Also, I'm not currently invested here either so I haven't any particular axe to grind (and been in and out along the way) but I have been watching here for over 4 years + and long term think these are a winner - that's just my opinion, and you are welcome to yours, just don't appreciate the constant stream of negativity.
· Revenue for the 9 months ended 31 March 2015 increased 26.0% to $48.9m · Constant currency continuing business revenue up 54.5% · On-going progress in developing Avanti's distribution platform across EMEA with 72 new contracts signed with both new and existing customers · Period end cash balance of $150.9m
Year to date trading Trading in the 9 months to 31 March has been strong, with continuing business revenues, assuming constant currency, increasing 54.5% (adjusted for non-recurring European Space Agency grant revenue in the prior year). EBITDA was $1.6m in the third quarter. The move into profitability at the EBITDA level in Q3 partly offset the loss in the first six months of the financial year. This growth is being driven by Avanti's ability to meet the demand for data connections in high growth markets through its Ka-band satellite fleet. These satellites provide high-capacity, high quality data connections, at price points that address a greater range of applications and users than legacy satellite technologies.
Performance indicators Avanti is introducing two new performance indicators in order to give investors better insight into the progress that the business is making.
The first of these is Top-20 Customer Bandwidth Revenue Growth. This metric helps to track Avanti's growth trajectory from core service sales, excluding non-recurring items. It is calculated by comparing the revenues from Avanti's current leading customers on a last 12 month basis, to the 12 months preceding that. Revenues from this customer group were 60.3% higher in the period ended 31 March 2015 than in the preceding period.
The second new performance indicator is Fleet Utilisation. This metric helps to track capacity uptake and gives an indication of revenue potential when Avanti's fleet is mature. It is calculated by dividing average utilised capacity by total available capacity for the fleet of HYLAS 1 (3 GHz), HYLAS 2 (11 GHz) and Artemis (1 GHz).
Avanti's average Fleet Utilisation was at the upper end of the 15% to 20% band in Q3 2015, having increased from the 10% to 15% range in the same period in the prior year.
May I refer everybody to the Q1 Trading update dated 13 November 2014 in which the CEO specifically dealt with satellite and launch costs: "We concluded the initial funding of HYLAS 4 in June, since when we have finalised the procurement contracts with Orbital Sciences and Arianespace, which will more than double our total fleet capacity and complete our sub Saharan coverage. The efficient procurement of the Satellite and Launch has generated significant savings on our original HYLAS 4 budget". So there can be no doubt that launch costs are covered in the Capex budget.
I fear you have taken what I written and freaked out that I would suggest there is further CAPEX to come. For clarity, I mean there has been a huge CAPEX requirement to launch these satellites.
Consquently, AVN is currently riddled, and yes riddled with debt. It is not generating cash and the update on its existing capacity update does not paint the picture of clients rushing to the door (15-20%). That was versus 10-15% for the year before
Unless AVN does something seriously quick to improve operating cashflow it will ultimately succumb to the iron fist of it creditors. Passed on the slow uptake in capacity, that looks more odds on that not.
I tend to agree with tyche 100. As far as I understand, AVANTI's H3 and H4 are fully financed, so no 'huge capital requirements' required. Again, my understanding from talking to the CEO is that any further satellites beyond 3 and 4 will be made and launched through Avanti, but financed by those institutions who require the bandwidth for which Avanti has licenses in place. This is a business that has required lots of capital to establish itself. It is increasingly seen as a well run venture supported amongs others, by the UK government, increasingly attracting American investors, and once H 3 and H4, are up and running, ( the latter doubling the capacity of the rest of the fleet ), generating stacks of cash. As for 'the monsoon clouds of impoverished African nations' what a load of stonking rubbish!
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