Avanti Communications (LON:AVN) had a busy Q3 ahead of its April conversion to equity of its 2023 notes. Following the $20.1m settlement due from the government of Indonesia at the end of July, it expects to complete further lines of funding to complement the restructuring. Meanwhile, the successful launch of HYLAS 4 just after the Q3 end maintains the schedule to bring the satellite into operational service towards the end of July 2018, thus significantly increasing the capacity of the fleet. The removal of financial constraint should support the company as it refines and implements its new strategy.
Busy Q3, but trading remains tough
Avanti reported revenue of $31.3m in the nine months to 31 March 2018 (9M17: $45.9m). Last year’s revenue included $8.5m of revenue from Artemis, which is now retired. Excluding this, the main reason for the drop in revenues was lower equipment sales as a result of the financial uncertainty, which should now reverse. Cost of sales and overheads were in line with company expectations at $55.7m (9M17: $58.3m). Net debt was $774m at the end of Q318, before the debt to equity swap reduced this by $557m on 26 April 2018. Allowing for a $3m FX gain, the order backlog was broadly unchanged, rising from $84.1m to $87.9m, with no further provisions against backlog in the period. Avanti is to align its reporting calendar with other key businesses in the industry, and will move the year end from June to December this year. Management change at the company brought Kyle Whitehill as new CEO on 3 April, and Christopher McLaughlin appointed chief of corporate affairs, stepping down from his non-executive director board position.
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