This is NOT my own work, it was posted a few months ago and l kept it on my file as it agreed with my own view and the poster is far more knowledgeable than myself!! "Still jam tomorrow but the assumptions re $700m revenue $500m EBITDA are interesting. Ignoring Artemis and assuming a prudent utilisation factor of 85% on the remaining 46ghz gets to de rated 39ghz. Assume average monthly income of $1500/MHz = $18,000/MHz per year x 39ghz = $703m. Say $125m cost of sales and $75m overhead to get to $500m EBITDA. Assume depreciation goes up to $80m and interest up to $80m = PBT of $340m. Say 20% tax given historic losses and cap allowances and we get earnings of around $270m. Say we have 135m shares by then = EPS of $2. Apply a PE of 15 and $30 share price is the long term dream! (3 – 5 years)" One change l would make to this calculation is to apply a pe of 9 or 10 in the early days given the relatively unproven quality of the profit stream, thus arriving at a sp of $18 - $20 by 2019/20
Thanks for responding to my posting and for the link to the article on EPS. Let's hope that Paul Walsh's EBITDA forecast comes true.
RE: Paul Walsh
To quote the old expression, "There are lies, damned lies and statistics." One man's EPS is not necessarily another's: http://www.investopedia.com/articles/analyst/091901.asp I feel that anyone's estimate of Avanti's future EPS is likely (as is mine) to be full of ifs and buts in its calculation. All I base my decision on, to be a shareholder here, is the expectation that, given the trends in Avanti's market and its ability to successfully respond to them, that even a pessimistic EPS forecast gives me comfort that the risk for the sp is largely to the upside. The relationship between EPS and divi on the shares I own and/or track varies between less than 1, e.g. Vodafone pays out more in divi than its EPS, to over 5. The majority are in the 2.5 - 3.0 area, i.e. their divi is well covered.
Has been quoted as saying that AVANTI has the potential to deliver over $500 million EBITDA annually. There are around 140 million shares in issue. Can any of you genius accountants give us any indication of what kind of EPS, such a scenario might bring, taking into account that H3 and H4 are fully financed. Of course one would have to speculate about debt being paid down. I have been looking at Inmarsat figures and note are giving a 28p dividend on EPS of around 48p. I also wonder therefor what kind of dividend AVN might be able to award IF Paul Walsh's forecast is achieved. Obviously there are lots of unknowns, but just for fun, can any of you stick your necks out and tell us what kind of money our company might make for us in terms of both S.P. and possible dividends in say 2018-20, , assuming H3 and H4 have sold their capacities, and AVN have achieved $500 million EBITDA.
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