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Avanti’s share price crashes

May 23, 2019

Unfortunately, a “share price crash” headline seems to be a regular occurrence for London-based Avanti Communications. May 22nd saw the company’s share price fall 17 per cent to a miserable 1.61 pence/share.

The reason seems to be that Avanti’s latest borrowing announcement of a further c$75 million to fund ongoing operations has spooked some shareholders. Sellers were getting rid of quite large volumes of shares (250,000, 250,000, 49,998, 250,000, 100,000) and while there is little or no value in the trades (a 250,000 sale generated £4,250) in what was a day of modest sales/purchases, the value per share has certainly crashed over the past month or two.

March 25th saw a recent ‘high’ of 2.95p, while Feb 4th registered 4.13p. On February 21st 2018 shares were trading at 5.49p. February 26th 2018 saw them valued at 12.16p, while back in May 2016 they were at 83p.

Prospects could be improving, but there is a chronic lack of clarity from the company which constantly misses key reporting dates and is frequently vague as to its actual financials.

Its Hylas-3 satellite should launch later this year and will be brought into service during Q4/2019.

Its actual bandwidth sales are truly miserable, at just $32m for the whole of last year, and this modest income has to be set against the underlying costs of delivering bandwidth which amounted to $80 million last year.

Avanti continues to promise much, and its most recent financial statement said: “Bandwidth revenues are forecast to increase by 125% in 2019 and at least a further 40 per cent in 2020. The growth is anticipated to come from Government business on HYLAS 4 and HYLAS 3, once operational.”

Shareholders can only hope!

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