Avanti Communications Group PLC (LON:AVN) saw its shares slip lower in early morning trading as the satellites operator said that although its business is recovering from a disruption seen in the first half, new contract awards will not generate “material revenue growth” in the second half.
In a trading update for the nine months ended 31 March 2017, the AIM-listed firm said it had seen over US$25mln of new business awarded in the last two months as demand has picked up in Europe and Middle East.
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However, it added: “The new contracts awarded have not arisen in time to generate material revenue growth in Q3 or Q4, but a number of sales of spectrum and other services are under negotiation which could impact in time for year end.”
David Williams, Avanti’s chief executive said: “The combination of weak macro-economics, especially in Africa, Brexit and industry volatility created significant challenges for our business in the last 12 months.
“However we are winning significant contracts again and a degree of optimism is returning, although we will not see significant like for like growth in recurring revenues until the next financial year.”
He added: “The Launch of HYLAS 4 is now close, and we expect this to have a strong positive effect on the perception of the business as we complete pan-EMEA coverage.”
Avanti said its nine month revenues were US$45.9mln, but its underlying loss was US$11.5mln, while cash at the period end was US$37.4mln, and it had debt with a face value of US$788.5mln.
In early morning trading, Avanti shares were 1.3%, or 0.12p lower at 9.75p.
Back in December, Avanti launched a proposed US$242mln refinancing after the satellite operator abandoned plans to sell the company.
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The group said then that a key strategic review of its business, which began in July 2016, had led it to terminate the formal sale process.
Back in September, Avanti had said it was still in discussions with potential buyers after its larger rival Inmarsat Plc (LON:ISAT) ruled out a bid for the company.
Avanti had warned in July that it would need to raise at least US$50mln after slashing its recurring revenue growth target.