Member Info for MattTheBrave

Possibly the least helpful trading update ever!! A few numbers would have been helpful!

.....a big stock price move attracts a bunch of mindless rampers with no actual investment thesis or knowledge. JIPjones, your post below is spot on. The $21mn contract is over 3 years, so only $7m per year. As I said below, the revenue shortfall is nearer $200m pa, so the Company needs a lot more of these.

SS - Is that $30m over the life of the contract, or $30m pa? I'm struggling to even get to $30m in total to be honest.

Let's look at this critically. Another sub-par quarter with only $16mn in sales. Annual sales of $62m - a 25% reduction on the previous year. Now let's think through the scale of the problem. Annual interest payments are running in the order of $70m, with depreciation running at about 50m. Just to be able to breakeven at a pre-tax level, the firm has to generate EBITDA of $120m. Now, let's be charitable, and assume an EBITDA margin of 50% (similar to Inmarsat), you need to generate revenues of $250m. This is before paying down any debt, or leaving anything for the shareholders. meanwhile, the Company is burning through cash at a rate which suggests that the interest costs might have to rise before they fall. is it doable? It's not completely beyond the range of possibilities. Is it likely? I don't think so, and the stock price reflects this concern. And before you start GCC, this is critical thinking backed up with some numbers, something I've never seen you do. If you disagree, how about you hold the insults, and come back with your own numbers.

Sounds like life is a little more challenging than normal for you at the moment mate. Hope things aren't to troublesome, and that good news is around the corner!

...as stated below, at £21, I'm buying back.

Not at all GCC - the pleasure of dealing with a super-brain such as your good self is reward enough without the need for monetary remuneration. Think of all that money your posts have saved for others....oh, wait a minute, that's not quite right is it........? (Frowny emoji)

Steady rise - had to chuckle at that one GCC - Two things this stock can never be accused of - being steady, or rising. What a terribly delusional chap you are. Thank heavens you have your sharp intelligence and delightful personality to fall back on.....;-)

Well thanks for your suggestion, but clearly unlike you, I understand how company capital structures work. The stock price has gone from £7 to less than 10p (mkt cap now £16m) in 5 years, whilst the debt has ballooned to more than half a billion pounds! The revenue growth has systematically been behind the Company's forecasts, whilst the Firm has yet to make enough ebitda to actually pay all of the interest bill, let alone start paying down any of the principal. As a result the Company has already had to restructure the debt mountain a couple of times, Meanwhile, there appears to be serious problems in the manufacture of one of its new satellites, whilst the launch dates are a moving feast (though only in one direction). There's nothing wrong with the assets per se, but it is extremely questionable whether they can support the current level of debt, (and recent contracts are literally a drop in the ocean). If they don't, the debt holders will gain control of the assets , and the equity holders will get nothing - the stock price doesn't lie, and this is now a penny stock. This Company is the perfect example of a 'knife edge' situation, and if you can't see that, you really shouldn't be putting your children's inheritance at risk.

I cannot believe the stock is stall falling here given the fundamentals, the valuation and the quality of management. Perhaps I'm missing something, but this looks an absolute bargain!

Closetrader - what's your point? So the Company has institutional shareholders - so what? So does every quoted Company which goes belly up.

So the management heave basically lost more than 95% of their own money investing in this stock - very comforting!! this means that compared to their overall wealth (built up from the 'huge' salaries referred to by GCCRa), their holding in AVN stock is probably now quite small, so I wouldn't attach too much weight to the argument that they have a huge amount to gain here. I do think it speaks volumes that they have not been prepared to buy below 90p though. After all, who knows better than them how much on a knife edge this company is?

...because the shareholders sign off on it at the AGM. If you don't like it, you should vote with your shares, or vote with your feet.

....here we are at 440p. Great company, but the stock's had an amazing rise over the last few years. Question is what to do now. For , this looks like it has had, and will continue to have long term growth of around 15%. I think you can justify a multiple of 20x for this which based on this years earnings is about 425p, so for me the stock is fairly valued tending to a little expensive. I'm happy to run with it at this level but if it get's up to 22x, around 470p, I'm going to lighten my position. Any thoughts elsewhere?

I haven't, and why on earth would I? Due warning, I'm reporting that post as malicious. Don't make accusations for which you have no proof.

Romaron- In April, it slipped from late '17 to early '18. This slippage is to mid-18, ie a year from now. For me, that signals a new delay, not old news.

closettrader - regarding your last question, loan holders are in a difficult position, do they pull the plug now and then sell the assets hoping to get back some of their money, but having to make some form of loss, or do they actually double down by lending more, in the hope that the Company trades itself out of trouble and pays everything back. Just because they are lending more, doesn't necessarily mean they know the Company will survive or prosper. I agree they have more information than we do, but they can't tell the future any better.

Well if this is genuinely another delay versus the delay we already knew about (and it looks like it is), this just provides further funding strain. Avanti needs the revenue from the new satellites, and it needs it ASAP as the debt mountain continues to loom large over the Company. Will the extra financing recently announced be sufficient now? Must be a risk that it's not.

Which is why I'm a long-only , physical only, non-leveraged investor.

Actually, just looked at the lon Stocs Exch website, and they do seem to be up to date. Google finance isn't though.