Good morning. Avanti Communications (LON:AVN) have issued a trading update this morning. They operate satellites. I've looked at this company many times in the past, and have never been able to find a satisfactory way of valuing it. At 246p a share, the market cap is £275m, and it has a fair bit of debt, since the enterprise value is £416m, yet it has never made a profit - so the valuation hinges entirely on expectations of future profits, which is really not my cup of tea at all.
For the year ended 30 Jun 2013 they say that revenues were below market consensus, due to "timing movements of certain contracts", which in non-RNS-speak personally I would call "delays".
They have £42m in the order book for the current financial year, ending 30 Jun 2014, which compares with forecasts for £63.7m turnover this year, delivering around breakeven. They say they were operating cashflow positive in June 2013.
So it reads like a profits warning for the year ended 30 Jun 2013, but with lots of positive commentary about the future outlook to soften the blow.
After hearing a programme on Radio 4 all about how the many fragments of man-made space junk are orbiting the earth, and putting satellites in peril, I think that was enough to put me off getting involved in anything related to space. I know nothing about the satellite sector, so I will re-enter the atmosphere and look at something terrestrial.
The futures are indicating a slightly softer open, with the FTSE 100 down about 23 points to 6,500 - still a pretty remarkable recovery given that we were knocking on the door of 6,000 recently.
Myself and a ShareSoc Director met with the Chairman of Vianet (LON:VNET) yesterday, and had an excellent meeting. I'll do a more detailed write-up at some point over the next week, but suffice it to say that the company has very much taken on board criticisms about its investor relations towards private investors, and is now striving to improve in that area. I found the Chairman open & straightforward.
Also I was encouraged by what they said about the regulatory threat from the Government's proposed Statutory Code. Whilst it is…