TIDMAVN
RNS Number : 4267F
Avanti Communications Group Plc
12 November 2015
12 November 2015
AVANTI COMMUNICATIONS GROUP PLC
Q1 2016 Trading Update
Avanti Communications delivers strong sequential growth
Avanti Communications Group plc ("Avanti" or "the Group"), a
leading provider of satellite data communications services in
Europe, the Middle East and Africa, issues the following trading
update for the period ended 30 September 2015.
Highlights
-- Revenue was $13.7m, representing 23.4% sequential growth over
the previous quarter on a constant currency continuing business
basis
-- Top-20 Customer Bandwidth Revenue Growth increased 57.5% a constant currency basis
-- Average Fleet Utilisation was at the upper end of the 20% to 25% range during the period
-- Strong growth is expected to continue throughout the remainder of 2016
-- Period end cash balance was $219.3m
Year to date trading
Avanti made good progress during the first quarter. Revenue was
$13.7m, representing sequential growth over the previous quarter of
23.4% on a continuing business basis, assuming constant currency.
On the same basis, revenue was flat versus Q1 2015. This was lower
than Avanti's prevailing run rate of growth, due to a larger amount
of equipment and government revenue in the previous year, which,
although recurring, tends to be recognised on a non-linear basis.
Q1 2016 EBITDA was negative $2.9m.
Top-20 Customer Bandwidth Revenue Growth increased 57.5% on a
constant currency basis. This metric helps to track Avanti's growth
trajectory from core service sales, excluding non-recurring items.
It is calculated by comparing the revenues from Avanti's current
leading customers on a last 12 month basis to the 12 months
preceding that.
Average Fleet Utilisation also showed a positive trend. It was
at the upper end of the 20% to 25% range during the first quarter
and utilisation was above that range by the end of the quarter.
This metric helps to track capacity uptake and gives an indication
of revenue potential when Avanti's fleet is mature. It is
calculated by dividing average utilised forward capacity by total
available capacity for the fleet of in-service satellites.
Avanti's average pricing remained stable.
Contracted backlog was $379.7m. This metric does not capture the
expected growth from framework contracts.
Distribution platform development
Avanti provides connectivity to end users through service
providers across the EMEA region. Service providers take time to
adopt the product as they test and negotiate, and then prepare
marketing and launch plans. Once fully engaged, almost all service
providers grow swiftly.
Avanti has made strong progress in developing its distribution
platform in recent months.
Following the win of a contract to provide broadband throughout
South Africa with Telkom SA, Avanti's service providers now include
all of the national carriers in its core African markets.
Some of Avanti's other customers in Africa include Tanzania
Telecommunications, TelOne, Orange Telkom Kenya, SENTECH, Dimension
Data, Wananchi, Raha and Facebook.
The Group is gathering momentum in its Government and Defence
business, having demonstrated a trusted and proven technology
platform.
There are a range of substantial opportunities in the pipeline.
Several of these are at an advanced stage, having already
progressed through the sales cycle, which can be long for large new
customer wins, often involving lengthy technical trials.
Looking to the longer-term, Avanti's salesforce is working on
pre-sales in new markets ahead of the launches of HYLAS 3 and
4.
Fleet expansion
Construction of the key 28GHz HYLAS 4 satellite is progressing
well. The launch remains on-track for early calendar 2017. Work on
the smaller 4GHz HYLAS 3 satellite, which is a hosted payload on a
European Space Agency space craft, is also progressing in-line with
expectations.
After an analysis of the most appropriate commercial
opportunities in terms of demand and pricing, the new steerable
HYLAS 2-B beam is expected to enter into service and begin
contributing to Group revenue during the second half of the current
financial year.
Balance sheet
Period end cash was $219.3m. The Group has sufficient cash
balances to comfortably meet all of its medium-term financial
commitments and management expects cash generation to grow swiftly
as revenues exceed Avanti's largely fixed cost base.
Current trading and outlook
Current trading remains strong. Management expects the growth
rate in constant currency revenues before the effect of
non-recurring business to continue, as existing customers increase
their usage and distribution through new customers grows. There are
a range of substantial opportunities in the pipeline that could
further augment the core growth levels.
David William's Avanti's CEO said:
"We have established an industry leading technology platform and
in recent months have made accelerated progress in developing our
distribution platform. We expect Avanti's growth to compound as our
existing customers continue to grow and the new customers that we
continue to win drive further growth."
For further information please contact:
Avanti: Matthew Springett, +44 (0)207 749 6703
Cenkos Securities: Max Hartley (Nomad) / Julian Morse, +44
(0)207 397 8900
Montfort: Nick Miles / James Olley, +44 (0)203 770 7909
Redleaf: Hannah Nicolas, +44 (0)207 382 4734
Notes to editors
Avanti connects people wherever they are - in their homes,
businesses, in government and on mobiles. Through the HYLAS
satellite fleet and more than 160 partners in 118 countries, the
network provides ubiquitous internet service to a quarter of the
world's population. Avanti delivers the level of quality and
flexibility that the most demanding telecoms customers in the world
seek.
Avanti is the first mover in high throughput satellite data
communications in EMEA. It has rights to orbital slots and Ka band
spectrum in perpetuity that covers an end market of over 1.7bn
people.
The Group has invested $1.2bn in a network that incorporates
satellites, gateway earth stations, datacentres and a fibre
ring.
Avanti has a unique Cloud based customer interface that is
protected by patented technology.
The Group has three satellites in orbit and a further two fully
funded satellites under construction.
Avanti Communications is listed in London on AIM (AVN:LSE).
www.avantiplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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