Avanti Communications Group plc
Q3 Trading Update
London – 31 May 2017. Avanti Communications Group plc (AIM: AVN, “Avanti” or “the Company”), the satellite operator, announces its trading update for the nine months ended 31 March 2017.
• The business is recovering from the disruption of the first half
• Over $25 million of new business awarded in the last two months as demand picks up in Europe and Middle East
• 9 month revenues of $45.9 million
• 9 month EBITDA of $(11.5) million
• Cash at period end of $37.4 million
• Debt at period end with a face value of $788.5 million
• Debt at period end, following accounting fair value adjustment, with a book value of $545.6 million*
• Backlog at 31 March 2017 of $233.7 million
• Available fleet capacity was enlarged in Q2 by 21% with the introduction of HYLAS 2B and the utilisation denominator rebased. Utilisation of the fleet in Q3 was in the 30%-35% range.
* The vast majority of the difference between the face value and book value of debt at the period end is due to a non-cash accounting entry related to the financial restructuring that completed on 23 January 2017. The initial liability on the balance sheet for the Amended Existing Notes with a face value of $481.6 million that were issued in exchange for original Loan Notes with a face value of $481.6 million was required to be based on the fair value of the Amended Existing Notes immediately following exchange. As the early trading price for the Amended Existing Notes was estimated to be $0.51, the Amended Existing Notes with a face value of $481.6 million were initially booked at $245.6 million. The same accounting entry gives rise to a large exceptional credit within the finance income line of the Consolidated Income Statement. The initial balance sheet entry will accrete over time such that by the maturity date, the full face value will be recognised on the balance sheet.
Current Trading and Outlook
Avanti had been awarded over $25 million of new business in the last two months. New 30Mb broadband products in Southern and Central Europe have sold very well with over five thousand installations since Christmas. A wider deployment of these products is under way. Our first 4G backhaul network for EE is proceeding on target with over 200 masts installed. The new contracts awarded have not arisen in time to generate material revenue growth in Q3 or Q4, but a number of sales of spectrum and other services are under negotiation which could impact in time for year end.
Commenting, David Williams, Avanti Chief Executive said:
The combination of weak macro-economics, especially in Africa, Brexit and industry volatility created significant challenges for our business in the last 12 months. However we are winning significant contracts again and a degree of optimism is returning, although we will not see significant like for like growth in recurring revenues until the next financial year. The Launch of HYLAS 4 is now close, and we expect this to have a strong positive effect on the perception of the business as we complete pan-EMEA coverage.
This announcement contains Inside Information.
For further information please contact:
Avanti Communications Group Plc Tel: +44 (0) 20 7749 1600
David Williams, Nigel Fox
Cenkos Securities plc Tel: +44 (0) 20 7397 8900
Max Hartley (Nomad) / Julian Morse
Avanti connects people wherever they are – in their homes, businesses, in government and on mobiles. Through the HYLAS satellite fleet and more than 180 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).