Avanti Communications is taking its world-leading technologies into space and helping to make the UK a global leader in new multi-million pound satellite communication markets.
The London-based business launched its first satellite HYLAS 1 (Highly Adaptable Satellite) into space in 2010 as part of a public-private partnership funded by the European Space Agency and British National Space Centre (now the United Kingdom Space Agency) and managed on their behalf by Innovate UK.
HYLAS1 was Avanti’s first broadband satellite. It uses the latest high-frequency Ka-band technology to deliver high-speed data services to customers across Europe.
David Williams, chief executive of Avanti, said:
At the time this was quite a bold move because the satellite industry had not yet embraced the use of this new high frequency. As a result, Avanti and its peers now own more Ka-band satellites than any other country on Earth.
This is a market segment where the UK really is taking a global lead.
Avanti has launched HYLAS 2 and HYLAS 3 to cover the Middle East and Africa, and it will increase capacity further with the launch of HYLAS 4 in 2017.
Avanti has collaborated on many projects managed and co-funded by Innovate UK. It has produced a video (above) that reflects on the success of many of these projects.
Innovative projects move swiftly to market Lynx, a booking system for broadcasters co-funded by the UK Space Agency (UKSA), is now being used by leading broadcasters including the BBC, CNN, Sky, Bloomberg and Reuters. Broadcasters use the system to deliver live breaking news coverage from across the world.
Avanti deployed the world’s first satellite 3g backhaul service in partnership with Vodafone in 2014. The technology developed out of an Innovate UK-funded project, Orion, and has allowed Avanti to take a global lead in a sector expected to be worth hundreds of millions of dollars.
The company also developed its Mobile Assist app for satellite installation engineers out of an Innovate UK-funded feasibility study.
The app reduces the time and cost of installation through supporting antenna line-up, the initiation of service and job reporting.
Avanti was founded in 2002. Its latest figures to June 2015 show its revenues up from $65.6 million in 2014 to $85.2 million in 2015.
Innovate UK is doing an outstanding job of funding highly innovative technologies but also making sure that they are delivering revenues, job creation and wealth creation in the UK.
In Avanti’s case, many of these projects have been taken to market within a very short time period. They have helped us to create genuine, sustainable competitive advantage for Avanti and for British industry.
Sorry folks. I can't give you the link apparently. You may be able to pick it up by searching on Innovate UK directly,. Its a short video of David Williams talking about the projects which AVN have had help from Innovate UK to bring to market
"On the basis of our expectation of 50% annual continuing business revenue growth and Avanti's strong liquidity position, the Group's business plan is fully funded through to the launches of HYLAS 3 and 4 in 2017, with positive EBITDA expected from the second half of the financial year ending 30 June 2016.
Avanti has fixed cost bond finance at 10%, which is not repayable until October 2019 when we would expect to refinance it at lower rates. The Group held period end cash of $162.6m and furthermore has consent to draw down up to a further $71.0m in credit from multiple facilities. We do not expect to need to use this, but it does mean that Avanti has surplus cash headroom at the low point in our own business plan in mid-2018 of over $90 million, giving us very strong headroom and full confidence in our full funding to maturity."
My own calculations, based on various potential cash-flow scenarios, support the line that the $71m credit facility will not be needed, so providing a good margin of safety. All-in-all I feel we have to monitor developments, with the prospect that the sp will move up in 2017 as Hylas 4, and to a lesser extent Hylas 3, are successfully launched and enter service.
Wait approximately 3 weeks and we'll see the latest update, won't we? Meanwhile, I'm expecting to see circa US $24 million for this quarter taking revenue for the financial year to approx US $55 million. For the following quarter, we should be expecting over US $30 million despite currency exchange headwinds. Shy of their target for the year maybe (my guess - this is Avanti), but with recurring revenue growth of circa 25% per quarter locked in and keeping the company well above water until the next launches. The share price won't rise much until the end of year results as the market is bored/scared rigid. The worriers have'nt clicked yet that the big contracts are already signed and that it is just a question of delivering on them - and getting paid of course... And btw. Hylas 4 capacity is to be utilised with the SA Telkom deal and BDUK deal as well as the Bentley Walker announcement. The deleted post re West Africa infrastructure indicates that AVN is setting up shop for the West Africa market. Remember that AVN is competitive versus the Ku band incumbents. Let's see how things pan out but I suspect it won't be as per the bad lorry driver over on the other board.
Comments on other boards regarding share price, cash burn and 1p by this december. What are the views out there on cash burn to year end in June. Will there be enough cash to fund the business for 16/17 and yes there is the option to borrow another 70m but who will lend if cash burn and prospects remain poor. Will the recently announced selling and lease back of ground stations substantially help? How do you think the progress is going from prev 25% utilisation to full by launch of next sats with no news of big contracts? Getting worried
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