Skip to content
 

BigBlu expects to deliver further returns from Australia operations

*

BigBlu Broadband LON:BBB, the London-based, AIM-listed provider of broadband, especially in remote rural areas, published its final results for the year ended 30th November 2023 today (20th May).

  • Adjusted earnings up 9.8% to £4.5m
  • Adjusted profit-before-tax £4.2m, up from £3.2m
  • Cash inflows £5.3m, up from £0.7m

The company saw a 4.8% fall in revenue, when compared to 2022, to GBP25.9m. However, following a cost-cutting programme BigBlu’s adjusted earnings were up 9.8% y-o-y to GBP4.5m and reported profit-before-tax (adjusted EBITDA less interest, taxation, and amortisation) of GBP4.2m, up from GBP3.2m the year before.

The company built up its cash reserves, booking GBP5.3m of operating cash inflows, a significant jump from the GBP0.7m cash inflow it reported in 2022. BigBlu’s net cash position ended the financial year at GBP1.5m which was affected by GBP2.8m acquisition costs incurred for buying Harbour ISP, a subsidiary of Uniti Group LTD in Australia in February. The purchase was paid out of cash reserves and tapping into the company’s revolving credit facility with Santander Bank.

BigBlu’s Norwegian disposal

The company also completed a number of disposals, selling its Norwegian subsidiary the Brdy Group in February, and in June raised GBP41.4m through selling some of its holdings in Quickline to Northleaf Capital Partners, but retaining a 3.1% stake with a carrying value of GBP5.9m

The Brdy Group disposal was a strategic shift by BigBlu and was sold to former BigBlu chief executive, Andrew Walwyn in a management buy-out. The sale was for a nominal amount of GBP1, but the broadband provider inserted a clause in the sale agreement entitling it to claim additional earnings based on future performance. The company said that trading conditions had been challenging in Norway, with high customer attrition and competition from fibre providers.

Subsequent to Walwyn stepping down from BigBlu to run the Norway business, BigBlu’s chief finance officer Frank Waters was promoted to CEO.

The Norwegian disposal significantly affected BigBlu’s bottom line, with post-tax loss widening to GBP4.7m from GBP2.9m a year ago.  The Norwegian disposal incurred a loss of GBP3.3m.

The company reorientated its focus from North to South, opting to build up its Australian subsidiary and focusing on its remaining Quickline holdings.

Serving hard to reach areas

BigBlu targets customers that fall outside of established fibre networks and uses wireless technology, 5G fixed wireless access and satellite broadband, that the company says is on par with fibre-based broadband.

Operating in Europe and Australasia, BigBlu provides broadband to domestic clients as well as businesses off the network, like mining operations.

The company opened trading today at 40p but fell to 38p in early trading. Over one-year, the company’s shares fell near to 14% and over the year-to-date, is up 6.7%.  Market capitalisation is GBP25m.

Waters said in a statement: “Revenue is underpinned with a high percentage (c.93%) of recurring revenue attached to contracts. We remain confident in our ability to deliver further returns for shareholders from our operations in Australia together with the remaining equity stake in Quickline.”

He continued: “As we enter the new financial year, there are opportunities to deliver improved shareholder value as we continue to support customers unserved and underserved in the digital divide, whilst at the same time improving our product range thereby reducing churn. Given the changes in the product offering in Australia, the company is only expecting the benefits of the actions it is taking to be seen in the second half of the year and therefore the group expects that underlying revenues for FY24 in Australia are likely to be below the results for FY23.”

Looking for great investing ideas? Sign up to our free newsletter.

This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

'How to' Guides

Our latest in-depth company reports

Detailed reviews of selected companies and investment trusts.

On the podcast

Sign up for great investing stock tips

Thanks to our Site Partners

Our partners are established, regulated businesses and we are grateful for their support.

Aquis
CME Group
FP Markets
Pepperstone
TMX
WisdomTree
Back To Top