Avanti on track to profit

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Governments and operators of mobile networks are struggling to keep pace with the rise in demand for wireless and high-speed broadband connections. Rising numbers are approaching AVN (Avanti Communications) to ask for support to manage the load, contributing to a doubling of sales for the satellite operator as it registers its first ever full twelve-month cash profits.

Twenty seven percent of the world’s population is covered by the satellite fleet operated by Avanti, which focuses specifically on the sub-Sahara region of Africa, where the company’s expectations are for the demand in wireless to explode in the years to come. Expansion of the group’s coverage continues – successfully purchasing the Artemis satellite last December and financing HYLAS 4, the company’s fifth satellite which is expected to launch early in 2017.

Recently the group was contracted by the UK government to deploy ‘4G’ superfast network services. The group also entered into long term agreements with mobile networks Smart and (VOD) Vodafone, and group representatives say that its unique technology is currently being piloted by certain other large operators. The group signed 92 new agreements in total which collectively made a contribution of $24m (£15m) to an order book totalling $430m.

Avanti has the potential to generate a profit in excess of $500m according to brokers Cenkos, providing the company can utilize most of the capacity of its satellites. This would value the business at a possible maximum of 1000p per share. The broker predicts that the company will lose $76.1m next year, resulting in a per-share loss 39.6¢, compared to respective losses of $87m and 45.5¢ the previous year.

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