Avanti Communications Group PLC (AIM: AVN) (“Avanti” or “the Group”), a leading provider of satellite data communications services in Europe, the Middle East and Africa, issues the following update for the quarter ending 31 March 2018 and post quarter to date.
- HYLAS 4 successfully launched on 5 April, shortly after the quarter end
- Revenue for the 9 months to 31 March 2018 was $31.3m
- EBITDA loss $18.0m
- Net debt at the period end of $774m before the debt for equity swap at the end of April
- All 2023 notes ($557 million) successfully converted to equity on 26 April 2018 and new shares admitted to trading on AIM
- The Company continues to pursue multiple lines of funding to complement the restructuring which the Board expects to conclude positively in the short to medium term
- The Company announces a change to year end to 31 December in line with Industry standards.
- Kyle Whitehill joined as new CEO on 3 April 2018
- Following the successful launch and commissioning of HYLAS 4, David Bestwick, co-founder and Technical Director, will retire from the business and step down from the Board at the end of June 2018
- Christopher McLaughlin appointed as Chief of Corporate and External Affairs whilst stepping down from the Board as a non-executive director with immediate effect
Paul Walsh, Chairman, commented: “I would like to thank Alan Harper for stepping into the role as interim Chief Executive over the last 7 months providing some stability during this time. I am equally delighted to welcome Kyle Whitehill as the new Chief Executive. Kyle joins at an important stage for the business with the launch of HYLAS 4 and the successful completion of the debt for equity swap during his first month.
I am also pleased to confirm that HYLAS 4 is in excellent health and is currently undergoing in-orbit testing at 21.5E whilst at the same time securing that slot for future business. The satellite will move to its operational position of 33.5W in July.
Chris McLaughlin has been a valued colleague during his time on the Board and I am extremely pleased that he is now to take an executive role within the business.
Dave Bestwick has been a cornerstone of Avanti since its inception. His vision and determination has been remarkable. On behalf of everyone at Avanti I thank him for his service and wish Dave the very best in his future endeavours.”
Trading year to date
The quarter ended 31 March 2018 was dominated by the work to convert the 2023 notes into equity. The various bondholder consents were received during the period and the shareholders ratified the transaction on 26 April 2018.
The revenue for the period was split as follows:
|$ millions||$ millions|
Revenue generated by Artemis in 2017 has been shown separately on the basis that the satellite has now been retired. Excluding Artemis, the fall in revenue was primarily due to lower equipment sales. Costs of sale and overheads remain in line the Company’s expectations at $55.7 million (2017: $58.3 million).
This generated an EBITDA loss of $18.0 million (2017: loss $11.4 million).
HYLAS 4 and utilisation
HYLAS 4, as previously announced, successfully reached its interim orbital slot and has completed its deployment of antenna and solar arrays. The first phase of in-orbit testing has been completed and the health of the satellite is good. As we bring this satellite into operational service towards the end of July 2018 we significantly increase the capacity of the fleet.
The Company will publish its utilisation KPI based on forward and return capacity. With the launch of HYLAS 4 the total forward and return capacity of the fleet is 47 Ghz.
As previously reported HYLAS 3, the payload to be hosted on the ESA satellite EDRS – C, is very late and is now not expected to launch until calendar Q2 2019. The Company continues to consider all its options in order to maximise value from this asset.
Backlog increased in the quarter from $84.1 million to $87.9 million. There were no provisions against backlog in the period, but it did include a foreign exchange revaluation gain of $3 million.
Change of Year End
Whilst the new management refines and implements the new strategy, it is now an appropriate time to align the Company’s reporting with the other key businesses in the industry. The Company is therefore announcing that the financial year end will be changed to 31 December.
This announcement contains inside information.
For further information, please contact:
|Avanti Communications||Kyle Whitehill, Nigel FoxTel: +44 20 7749 1600
|Montfort||Nick Miles, James OlleyTel: +44 203 770 7909
|Cenkos Securities (Nomad)||Max HartleyTel: +44 207 397 8900
|Redleaf Communications||Ralph Anderson+44 (0)20 3757 6883|
About Chris McLaughlin
Chris McLaughlin is a FTSE-experienced, corporate and government marketing and communications specialist. He has an extensive background within new and emerging technology sectors. Joining Inmarsat plc in March 2004, prior to the successful 2005 IPO, he was a member of the senior executive management team and Chief Marketing Officer until January 2017. He was responsible for all global government, reputational, CSR, marketing, brand and sponsorship activity at the company. Chris has wide experience in emerging markets and demanding regulatory environments. Producer and host of multiple global partner events, he was also responsible for the technology-proving, Volvo Ocean Race sponsorship from 2005, which continues. He has held similar international roles at Philip Morris International, Visa International, ITV, The BBC and worked in the Private Equity environment, acquiring and operating cable television groups in Europe.
Avanti connects people wherever they are – in their homes, businesses, in government and on mobiles. Through the HYLAS satellite fleet and 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, ground stations, datacentres and a fibre ring.
Avanti has a unique Cloud-based customer interface that is protected by patented technology. Avanti Communications is listed in London on AIM (AVN: LSE).