Sometime in September – the company is vague about the precise date – London-based speciality satellite operator Avanti Communications will unveil its preliminary results for the trading year to June 30th.
On May 16th Avanti issued a Q1 trading update, talking optimistically of future prospects and re-affirming its overall full-year guidance. However, bless than two months later on July 7th it issued a ‘strategic review’ saying it its revenue expectations were now in doubt and it was involved with a number of potential investors to address its funding requirements, and that a possible sale of the company was one option.
Other than some gossip that Inmarsat might be interested – and firmly denied by Inmarsat – there hasn’t been much by way of hard news since July 7th. That July 7th statement talked of a full-year (to June 30th) revenue position of some $83 million, and thus down on the 2015 position.
Falling revenues are one measure of performance, but analysts will want to know how the company’s costs and expenses have ended up, and where Avanti is in terms of its debt levels. Some analysts have commented that it is Avanti’s debt burden (“drowning in debt” said one) and whether it has been able to borrow more cash and/or secure new Export Credit funding, or refinance (doubtful given the company’s poor position overall), or whether it has found a buyer.
Perhaps coincidentally (but perhaps not) this past few days have seen Avanti’s share price rise somewhat unexpectedly (+6 per cent on August 30th, +10 per cent on August 29th) to 40p. However, this is still well down on the 230p position a year ago.
The July 7th statement said that the operator has sufficient liquidity to see itself through to the end of this calendar year. But thereafter is what the market wants to hear about.