London-based satellite operator Avanti Communications has reported a loss for its 9-month trading (to March 31st). Avanti says its revenues for the 9 months were just $39 million, and blamed the poor performance on continued delays in client capacity bookings.
The poor revenue picture means that Avanti’s EBITDA position has worsened from a positive $1 million for the half-year to December 31st to a negative $2 million by March 31st. Avanti says it has a $65 million cash pile, but net debt of $299 million, although its contracted backlog has improved by $3 million to $458 million. The cash position at Dec 31st stood at $78.3 million.
The worry for analysts is that the company’s monthly expenditure run rate is running ahead of income. For the 6-month period to Dec 31st the company’s revenues were $31.3 million (or on a crude scale $5.2 million a month). The current position, of $39 million, again on a crude scale averaged over the 9 months is some $4.33 million per month. However, taken in isolation the most recent quarter shows average revenues of just $2.56 million.
“In the early days of selling service, we found that deals took longer to close than anticipated, and there is still an element of that,” the company said in its May 12th announcement, adding that it discovered “more initial conservatism in the target customer base than expected, putting us behind in our business plan.” Avanti added that it was making headway in reducing the amount of time it takes to land a new customer and begin revenue-producing service, from 125 days in 2013 to 106 days in the past 12 months and, in the three months ending March 31st, to 91 days.
Avanti’s customer base has improved with 26 new contracts signed during the quarter.
Avanti’s share price fell back May 12th some 4 per cent (12.75p) to £2.91.