Shares in Avanti Communications (AVN) shot up 8 per cent even as the satellite specialist - which rents out capacity to mobile and broadband providers in Africa, Europe and the Middle East - posted a sharp increase in first-half operating losses to $28m (£18.3m).
Investors' exuberance may reflect the successful financing of its fifth satellite, Hylas 4, through a £61m share placing announced alongside these results. The successful launch of Hylas 4 - scheduled for 2017 at a cost of $300m - promises to substantially bolster the group's capacity and complete its coverage of Sub-Saharan Africa.
Management are meanwhile building a market. They expect 49 first-half contract wins and a revenue backlog of $410m to underpin a significant uplift in third-quarter revenue. That matters because of a spiralling tab of investments: construction costs more than halved the cash pile during the first half, sending net debt up 35 per cent to $434m.
The analysts at Jefferies expect a busy second half: they reckon Avanti will post over $55m in sales - a three-quarter jump from the first half. That should translate into a full-year cash profit of $15.1m, rising to $52.5m in 2015-16.
AVANTI COMMUNICATIONS (AVN) | ||||
---|---|---|---|---|
ORD PRICE: | 240p | MARKET VALUE: | £271m | |
TOUCH: | 239-240p | 12-MONTH HIGH: | 329p | LOW: 163p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 211¢ | NET DEBT: | 183% |
Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
---|---|---|---|---|
2013 | 25.0 | -41.8 | -38.7 | nil |
2014 | 31.1 | -48.1 | -44.9 | nil |
% change | +24 | - | - | - |
£1=$1.53 |