28th Aug 2019 12:00
(Alliance News) - Avanti Communications Group PLC on Wednesday reported an interim loss but saw revenue increase slightly and offered a very positive outlook.
Shares in the satellite operator were 17% lower in London in midday trade at 0.52 pence each.
In the six months that ended June 30, Avanti sunk to a USD68.6 million pretax loss compared to a USD242.2 million profit a year before. Last year Avanti booked a one-off exceptional gain of USD308.7 million after restructuring its debt.
Avanti's operating loss widened to USD34.6 million from USD16.8 million a year before.
Revenue increased by 1.0% to USD30.2 million from USD29.9 million.
First half adjusted earnings before interest, tax, depreciation and amortization were in line with the company's expectations, reporting an Ebitda loss of USD4.7 million, narrowed from USD17.4 million a year before.
"The steady progress in the first half of 2019 has set the foundations for the remainder of the year. We expect to see a material contribution from Government bandwidth opportunities in the second half of 2019," said Chief Executive Kyle Whitehill.
Looking ahead, Avanti reiterated its guidance for a full-year positive Ebitda result. The cost of delivering bandwidth in 2018 was USD80 million, which the company expects to reduce by at least 15% in 2019 - improving Ebitda margins.
Avanit added: "Total revenues for 2019 are forecast to grow by 67% over the USD53 million reported for 2018, with a further uplift of at least 30% for 2020. The key driver to this growth is bandwidth revenue, which accounted for USD31 million of the USD53.5 million in 2018 and is now forecast to grow by 125% and 40% in 2019 and 2020, respectively."
The company's backlog at June 30 stood at USD156.4 million, 80% higher than at the same point the year before.
Avanti is also in the progress of de-listing its shares from AIM.
Avanti will hold a general meeting on September 5, at which the proposal must receive at least 75% in approval from shareholders to proceed.
So far, Avanti has received irrevocable undertakings to support it in respect of 1.35 billion shares, representing, in aggregate, around 62% of Avanti's issued share capital.
Should the proposal be accepted, Avanti expects its shares to be cancelled from London's junior market on September 18.