Avanti Communications – 296p

10 October 2012 – final results

The satellite communications group has reported results for the year to 30 June which have shown impressive growth in what has been another year of significant progress.  Revenues for the year increased by 246% to £15.0m (2011: £6.1m) although a loss before tax of £16.0m (2011: loss of £12.7m) was reported due to an increased depreciation charge.  At this stage in the group’s development these figures are largely irrelevant and of more relavance is the news that the company is continuing to sell its satellite capacity.  However, although this is going well, the phasing of the order backlog is slower than had previously been expected and the shares have fallen sharply as a result.  Although investors will need therefore to be more patient, the long term prospects of the group remain sound.  Nevertheless, the fact that the order takeup will be slower than expected leads us to reduce our recommendation to HOLD.

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