Soaring global demand for wireless connectivity fuelled an 18 per cent rise in underlying sales at Avanti Communications (AVN) in the reported period. That helped the satellite specialist, which rents out capacity to mobile and broadband providers across Europe, the Middle East and Africa, narrow its operating loss by 2 per cent to $27.9m (£19.1m). Yet investors, perhaps tired of waiting for profits, sent its shares down by more than a tenth.
Avanti's sales to its 20 largest customers by bandwidth rose 44 per cent in the period. Moreover, its directors struck deals worth $40m with governments and large telcos in the second quarter alone. They also inked contracts with BT and Telkom SA to deliver high-speed broadband across the UK and South Africa, respectively. And they tried to dispel concerns about liquidity ahead of the launch of two more satellites in 2017, by highlighting the $163m in the bank and $71m in available financing.
In light of Avanti's strong momentum and $410m order backlog, management expects underlying sales to rise by half in the year to June and predicts the group will turn a second-half cash profit.
Broker Cenkos expects a loss per share of 38.9p this financial year, compared with 61.5p in FY2015.
| AVANTI COMMUNICATIONS (AVN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £175m | |
| TOUCH: | 118-119p | 12-MONTH HIGH: | 270p | LOW: 98p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 174¢ | NET DEBT: | 189% | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 31.1 | -48.0 | -44.9 | nil |
| 2015 | 31.0 | -45.5 | -32.8 | nil |
| % change | - | - | - | - |
£1=$1.46 | ||||
