Companies: ASG   

Avanti Screenmedia, provider of advertising screens to pubs and shopping malls, and increasingly to the retail sector, has announced sturdy financials for the year to June, following a bumper period of activity.

Pre-tax profits powered ahead by 162% to £3.1m on turnover up 54% to £12.9m, though earnings per share fell slightly to 16.26p (18.25p) following a £25m placing priced at 250p last November.

This funding, along with a £25m government grant, forms part of an initiative in the ‘Networks’ division of the company to buy HYLAS, a satellite to be launched in 2008. This would make Avanti the only licensed broadcast satellite operator in the UK – a move still on the ‘distant horizon', according to chairman John Brackenbury, but one that could prove extremely lucrative long-term.

Avanti's media division is also going well, having built a solid presence for its plasma screens in the retail sector and now reaching 'required critical mass’, with 5,000 screens currently installed throughout the UK.

Intriguingly, the company also recently signed a five-year exclusive agreement to provide ‘SPAR TV’ to Tates Ltd, the largest SPAR convenience store operator in the UK with 206 shops. In addition, key contracts have been signed with Woolworths, Setanta and MoMedia. Avanti closed the year with net cash of £10m.

House broker ABN AMRO retains its ‘buy’ stance on the shares. Forecast pre-tax profits for the next two years are £3.3m and £4.1m, from sales of £15.4m and £19.8m. Earnings are expected to drop to 14.5p, rising to 18.5p in 2008, placing the shares on forward multiples of 21.8 and 17.1 – undemanding given growth rates. The shares are well worth holding.