TIDMAVN
RNS Number : 9017W
Avanti Communications Group Plc
13 November 2014
Avanti Communications Group plc
Q1 Trading Update
London - 13 November 2014. Avanti Communications Group plc (AIM:
AVN, "Avanti" or "the Company"), the satellite operator, has
published today its trading update for the three months ended 30
September 2014.
Key developments
-- 22 new contracts in the period
-- Significant progress with large scale African education
market: three new projects awarded
-- New defence customer signed, and the first 4G cellular backhaul service deployed
-- Finalised procurement contracts for HYLAS 4 under budget by $50m
-- Launch of three unique industry technical innovations to widen competitive advantage
Financial highlights
-- 3 month revenues of $15.5 million as guided previously
-- 3 month EBITDA of $(2) million
-- Cash at period end of $143.2 million
-- Net Debt at period end of $372.3 million
-- Backlog at 30 September 2014 of $420 million
-- Average days on pipeline continued to improve to 87 days
-- Repeat rate remains over 50%
Commenting, David Williams, Avanti Chief Executive said:
"The key to our business now is continuing to sign the highest
quality customers who will distribute the products in increasing
scale; to support their growth, keep them loyal and ensure that we
have strong long term relationships. We do this by focusing on the
quality of our product and the way it is delivered by our people,
and by maintaining flexibility to unique customer requirements in
each local market. If we continue to get this right, strong
profitability will follow."
Chief Executive's Commentary
During the quarter we signed 22 new contracts across our four
sectors. We now have a total of 149 customers.
Backlog at the end of the quarter was $420 million having taken
$15.5 million from backlog to revenue. As we guided at the full
year, the fourth quarter included some large project revenues.
These one offs can be expected to occur again from time to time,
and are associated usually with either the systems integration
elements of large complex transactions or one off capacity sales of
steerable beams - there were none of these in Q1. The new contracts
signed, in what is generally a quiet Summer quarter, were primarily
framework in nature, resulting in this modest fall in net backlog
from the year end. However, with the repeat rate remaining above
50% and the average time prospects remain on pipeline continuing to
fall, we are confident that our distribution strategy is working.
Customers sign framework contracts more easily than large upfront
commitments and delivering experience of our product is the most
powerful form of advertising for us, usually resulting in increased
orders. This was demonstrated by 16 contracts in the period from
existing customers expanding capacity in existing or new
territories, whilst 6 were brand new customers. Our service
providers were awarded three new large scale schools projects in
the year (exclusive to Avanti but revenues are not yet in backlog).
We signed a new defence customer in the period, and deployed what
we believe to be the World's first 4G cellular backhaul service,
only shortly after our World first 3G service was announced earlier
in the year. We have also seen new interest in inward investment
into African Internet projects from a number of large international
companies, so our market is developing well.
We concluded the initial funding of HYLAS 4 in June, since when
we have finalised the procurement contracts with Orbital Sciences
and Arianespace, which will more than double our total fleet
capacity and complete our sub Saharan coverage. The efficient
procurement of the Satellite and Launch has generated significant
savings on our original HYLAS 4 budget and as a result the balance
of the financing requirement, through junior capital and High Yield
Bonds, has also been reduced. Initial marketing has resulted in
strong reaction from existing customers for the new beams and we
expect to expand many customers' existing contracts to cover new
HYLAS 4 territories.
Avanti competes in the market not only based on the
exceptionally low price and high speeds that are a function of the
use of Ka band, but also on the quality and flexibility of its
technology. Avanti's unique variant of Ka band is based on over 60
separate inventions, many of which are patented or patent pending.
During the period we continued to enhance the system with the
introduction of three new technologies. A proprietary "SNG" booking
system makes it easy for Outside Broadcasters to flexibly deploy
low cost capacity, building on the success we saw with broadcasts
from South Africa this year. A new smartphone installation tool
which also works with Google Glasses was deployed to make the
installation process deskilled and faster, which is crucial when
aiming for scale in markets like consumer broadband. Finally
"Multi-Beam VNO", a unique technology enabling Avanti customers to
share capacity between different beams and geographies, was
launched to a warm reception from our customers, because it makes
their investment more efficient in the early phase of deployment.
Through constant customer focused innovation, we are maintaining
the competitive advantages that keep customers loyal to our managed
service approach.
Current Trading and Outlook
Avanti has gained an unparalleled reputation for Quality and
Flexibility with both new and existing customers. Even in our
quietest Summer quarter we signed 22 new contracts and we expect
that momentum to carry forward into the next quarter and the year
as a whole. Some of the new contracts in respect of which we will
recognise revenue in the next quarter will have set up costs
associated with them and generate similar margins as those in
quarter one. We still have selling to do to achieve our growth
target for the year but there are a dozen large projects at RFP
stage or beyond that can help us to achieve this, as well as good
signs of existing customers growing strongly. We are getting the
fundamentals right and building a strong base.
For further information please contact:
Avanti Communications Group Plc Tel: +44 (0) 20 7749 1600
David Williams, Chief Executive
Nigel Fox, Finance Director
Cenkos Securities plc Tel: +44 (0) 20 7397 8900
Max Hartley (Nomad)/Julian Morse
Jefferies Hoare Govett Tel: +44 (0) 20 7029 8000
Neil Collingridge
Tulchan Communications Tel: +44 (0) 20 7353 4200
James Macey-White
Redleaf PR Tel: +44 (0) 2073824734
Dwight Burden/Hannah Nicolas
About Avanti
-- Avanti is a carriers' carrier, selling wholesale data
telecoms to service providers which use them to create networks for
enterprise, carrier, government and consumer users.
-- Avanti serves customers in Europe, Middle East and Africa.
-- Avanti's network consists of two high throughput satellites
in orbit, called HYLAS 1 and HYLAS 2 and a multiband satellite
called Artemis plus a fourth and a fifth satellite under
construction called HYLAS 3 and HYLAS 4 and an international fibre
network connecting data centres in several countries.
-- Customers access the fleet through the Avanti Cloud platform,
the most powerful proprietary system in the Industry.
-- Avanti Communications has GEO satellite network spectrum
filings in the ITU Master Register for Ka band at 33.5deg West and
31.0deg East and for Ka, Ku, S and L-band at 21.5deg East.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTLLLLFZFFFFBV
Avanti Communications (LSE:AVN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Avanti Communications (LSE:AVN)
Historical Stock Chart
From Apr 2023 to Apr 2024
