AVA.L Regulatory News (AVA)

Avanti Capital plc

Full Year Update

Avanti Capital plc ("the Company") the private equity company is updating the market today prior to its year end on 30 June 2010.

Eclectic Bars

Eclectic is the UK's leading operator of smaller-capacity, music-focused bars and clubs. The company's venues, which follow an independent music policy, predominantly target a mid- to upper-market customer base of more sophisticated students midweek and stylish 21+ adults at weekends.

The company has once again strongly outperformed the sector, with EBITDA for the 11 months to the end of May 2010 up 57% on the same period last year. Total sales were up 12% and like-for-like sales up 3%.

The venues' midweek business continues to grow year on year and helps to secure the company's position as one of the market leaders at the top end of the student market in most of the towns and cities in which it trades.

Eclectic's three refits/new openings continue to trade well against their targeted, annual cash-on-cash returns of 25% and 30% respectively. The Sakura units, which opened in Lincoln in October 2007 and in Reading in May 2008, both exceeded these targets with returns of 56% and 54% in their first two years of trading. Embargo 59, in London's Chelsea, which was refurbished in June 2009, has traded strongly from the first day of reopening and has already fully repaid its investment costs, leaving it on track to deliver a return of 130% at the end of its first year.

Expansion will continue next year with a number of new developments. Planning and licensing consents have been agreed for a third Sakura in Manchester and the company's existing unit in Brighton re-opens in July as 'Lola Lo', a new-format Polynesian-themed bar and club. Negotiations are currently ongoing in respect of a number of other interesting opportunities.

The business focus continues to deliver added value for customers. Improved product ranges and credible, entertaining DJs and live entertainment, together with quality service and standards, remain the bedrock of this success.

Eclectic's overall strategy is to continue to assemble, grow and improve a large portfolio of bars. The current and new brands within the estate have proved to be strong and resilient cash contributors, which provide an excellent template from which to develop and enhance the many venues and businesses coming onto the market from failed operators. Market conditions continue to present prospects for sensibly-priced acquisitions which will enable Eclectic to consolidate its strong position in the sector.

Espresso

Espresso continued its strong performance in the secondary school market in its second year of operation, and sustained growth in the primary school market driven principally by price and high retention levels.

In response to market needs, the company investment in product and technology development was accelerated during the year, with added emphasis on learning platform integration and home access to our services by pupils.

Espresso continued to explore International opportunities on a selective basis, both through commercial partners and through direct to schools business models, depending on the nature of the opportunity. There has been evidence to suggest that the unique nature of the Espresso service is well suited to International markets with selective localisation, and we continue to see this as an additional source of growth in outer years over above growth from the domestic market.

mBlox

mBlox is the world's largest mobile transaction network. It enables businesses to deliver and bill for mobile services and content around the world. It specialises in global operator connectivity and mobile billing, maintaining connections to more then 650 mobile operators in 180+ countries through its carrier-grade network.

The year to December to 2009 was a transformational year for mBlox and resulted in the company becoming profitable at an adjusted EBITDA level for the first time in its history. In 2010 to date mBlox has experienced strong revenue and adjusted EBITDA growth over 2009. For the full year 2010, the company is forecasting strong revenue growth and a significant acceleration of EBITDA.

In the year to December 2009 mBlox delivered over 3.5 billion application-to-person transactions, a volume up over 40% versus the prior year. These transactions covered a wide range of applications including, mobile originated and terminated messages and Premium SMS, powered mobile business, mobile marketing, transportation ticketing, payments and mobile entertainment worldwide. mBlox continues its path of high growth.

The company is now looking to expand its service through organic development and scaling acquisitions. In-house development is already underway to provide a broader set of services and payment mechanisms to mBlox's 1,000+ customer base. Additionally the company is actively looking at targets to acquire in the major continents outside North America and Western Europe where company is comfortably number 1 in its space on a like for like basis.

Medcenter

Medcenter continues to make significant progress in growing its core business of providing medical education and marketing services to the pharmaceutical industry in Latin America and Iberia.

The company continued its strong sales growth in 2009, driven largely by sales from its physicians' portal with WebMD Medscape. 

Medcenter is employing a strategy to align itself with the global pharmaceutical industry by creating both geographical reach and product breadth. In addition to further cultivating the WebMD relationship, Medcenter has negotiated commercial agreements with Reed Elsevier Latin America (combining Medcenter's proprietary learning system with Elsevier's high quality content), Doctors.Net.UK (selling and co-marketing arrangement) and Google Health (delivery of Google Apps suites combining Google's custom office applications with Medcenter content - subsidized to physicians through large pharmaceutical marketing campaigns).

Legacy Portfolio

The Company reiterates its policy of disposing of its investment in the legacy portfolio at the earliest possible time.