Posted: 07th Feb, 2012 By: MarkJ
Avanti Communications, a UK based broadband Satellite operator, has secured
£73.8 million in funding for the design, construction and launch of the firms next
HYLAS 3 spacecraft. The money comes from a conditional placing of
26,785,714 Ordinary Shares with new and existing institutional investors.
Avanti's first
Ka-band based broadband satellite,
HYLAS 1 (
33.5º West), was launched in November 2010 (
original news) and is currently delivering internet speeds of up to
10Mbps into rural parts of the UK and Europe. The company still expects to
sell-out of capacity on HYLAS 1 within three years of service launch.
The firms next spacecraft,
HYLAS 2, is currently expected to launch within a one month window from 30th June 2012 via a
Arianespace rocket. Unlike their first satellite, HYLAS 2 will focus its coverage on the
Middle East and
Africa, while HYLAS 3 is expected to do the same through "
overlapping geographic coverage".
It's understood that the
European Space Agency (ESA), after winner a competitive tendering process, will eventually carry HYLAS 3 into orbit around the Earth. Final contractual terms with ESA are expected to be agreed and contracts signed in March 2012, although
HYLAS 3 isn't expected to launch until 2015 (i.e. the final year of HYLAS 2's approach to full utilisation).
Avanti Financial Statement
Revenue recognised in the 6 months to December 2011 of £5.1 m (December 2010: £ 1.2 million) shows a steady acceleration over the £5.5 million recognised in the 12 months to June 2011. With a significant proportion of operational costs being non cash in nature the loss from operations of £6.8 million (December 2010: loss £6.3 million) shows only a £1.2 million outflow of cash from operations before working capital movements (December 2010: outflow £5.8 million).
The balance sheet remains strong, even though there is no carrying value for our orbital slots and frequency assignments. At 31 December 2011 the Company had drawn $227 million (June 2011: $190 million) of the HYLAS 2 debt facility. The full facility is $328 million which can be drawn over the next 12 months. The launch vehicle is fully paid and only one milestone remains on the satellite. The balance of expenditure on the HYLAS 2 project is the ground stations and the final instalment of the launch insurance premium.
Sales momentum for HYLAS 1 and 2 is building strongly, with £8.7m of sales booked in December 2011 and £14.0m in January 2012. This gives the Company confidence that it will fill both satellites within the timescale announced: three years from service launch for HYLAS 1 and the reduced term of four years for HYLAS 2. The Company expects HYLAS 3 to launch as it enters the final year of HYLAS 2’s approach to full utilisation, providing the Company with the means to continue to serve the growing demand of its customers.
For the year ended 30th June 2012, the Company has clear visibility on revenues of £17 million for the year. It is bidding on contracts or they are under negotiation which could increase revenues materially.
HYLAS 3, unlike the bulkier HYLAS 2, will have up to
4GHz of Ka band capacity, which is to be configured across eight beams within a single steerable antenna that can provide coverage of an area equivalent to a region the size of Southern Africa. This sounds very similar to their original HYLAS 1 design.
At this stage it's worth nothing that Avanti has
no plans to go beyond HYLAS 3, which is a shame as a second Satellite over Europe would give the service some additional redundancy in case of failure. On the other hand much of Europe is already deploying enhanced fixed line ISP connectivity, which suggests that a second EU Satellite might not be needed. Avanti also faces stiff competition in Europe from
SES ASTRA and
Eutelsat, which have managed to undercut some of its consumer services.