TIDMBBB
RNS Number : 5064T
Bigblu Broadband PLC
04 July 2018
Bigblu Broadband plc
("BBB" or the "Company" or the "Group")
Trading Update
Bigblu Broadband plc (AIM: BBB.L), a leading provider of
alternative fast broadband services, provides a trading update for
the six-month period ended 31 May 2018.
Trading in the period was in line with expectations and saw
continued improvement in the Company's key indicators, including
growth in revenue, growth in the customer base and improving
margins and cash flows. All of this occurred at the same time as a
significant fundraise, underpinned by the support from existing and
new shareholders, two successful acquisitions as part of the
Group's growth strategy and the disposal of the non-core Australian
fibre customer base.
The first half of the year was also about completing the
European footprint, dedicating time and resources on the
preparation phase for working with the EuroBroadband Joint Venture,
going live in five countries in twelve weeks and rolling out the
Company's systems to acquired companies.
Financial Highlights
-- The total number of customers increased 22% to around 123k
prior to the post-period disposal of the Australian Fibre customer
base and associated business
-- Total revenue increased c. 20% to c. GBP25m (H1 17: GBP21m)
o Recurring revenue* increased c. 20% to c. GBP23m, representing
91% of total revenue
o Like-for-like organic revenue growth on a constant currency
basis** of 7%
-- Gross margin grew by 40 basis points to 37.4% due to improved sales mix
-- Underlying EBITDA*** continued to improve compared with H1 17
-- Net debt decreased to c. GBP9.4m as at 31 May 2018 (FY17: GBP13.1m)
* Recurring revenue is defined as revenue generated from the
Group's broadband airtime and data contracts which are typically
two years or more in duration.
** Like-for-like organic revenue growth compares current and
prior period revenue treating acquired businesses as if they had
been owned for all of both periods on a constant currency
basis.
*** Underlying EBITDA is before share based payments,
depreciation, intangible amortisation, acquisition and deal related
costs
Operating Highlights
-- Strengthening of the Board of Directors
o Christopher Mills joined the Company as a Non-Executive
Director on 29 May 2018 and has already made a positive impact to
Board level discussions
-- The Company also continues to strengthen its senior
management team to support the growing business and in February
recruited Mark Anderson, previously a director of Sky and Fox
Networks, as Chief Operating Officer
-- Successful placing of new Ordinary Shares with existing and
new shareholders raising gross proceeds of approximately GBP12.0
million
-- Continued support from HSBC via extension of RCF facility
-- Acquisitions of Open Sky, a leading satellite broadband
provider in Italy with c. 14.5k customers, and the acquisition of
Sat Internet, a well-established provider of satellite broadband
based in Germany, with c. 6.0k customers in Germany and Austria and
a further c. 0.5k customers in Portugal. Both acquisitions
represented new territories for the Company and form new hubs with
a combined customer base of c. 21k whilst adding significantly to
BBB's operational footprint and scale within Europe. These
acquisitions are expected to be earnings enhancing with a positive
free cash flow contribution
-- Post-period end the company disposed of c. 11k non-core,
lower margin fibre customers of the Australian business SkyMesh
-- Broadband Delivery UK ("BDUK")
o Received GBP2.1m grant to develop and conduct field trials for
the next generation of 5G fixed wireless broadband services over TV
whitespace frequencies with the aim of delivering super-fast
services over this spectrum for the first time
-- Progress on the EuroBroadband Joint Venture
o ERP and customer management systems rolled out and now live in
five JV countries
o First phase of coordinated marketing plan and spend has just
commenced and is being rolled out over the next five months
Financial Review
The Company has continued to make good progress in expanding its
customer base, driven by the impact of acquisitions and organic net
additions to the core business. As a result, total customers have
increased from just over 100k at the start of the financial year to
approximately 123k prior to the disposal of the non-core Australian
fibre customers. The Group's customer base currently stands at c.
112k post the Australian fibre customer disposal.
Group revenue increased by c. 20% to c. GBP25m over the same
period in the prior year (H1 17: GBP21m) with recurring revenue*
increasing by c. 20% to c. GBP23m (H1 17: GBP19m), representing
approximately 91% of total revenue.
Like-for-like organic revenue growth** during the period was c.
7% on a constant currency basis compared to the same period in the
prior year reflecting a solid performance from the core business.
Furthermore, the contributions from recent acquisitions in Italy
and Germany have significantly expanded the Company's operational
footprint and scale across Europe.
Gross margin was 37.4% in the period (H1 17: 37.0%, FY17: 35.5%)
due to an improved revenue mix across the Group's hubs, and
underlying EBITDA*** continued to improve compared with H1 17 as
the Company benefitted from scale.
Net debt decreased from GBP13.1m as at 31 December 2017 to c.
GBP9.4m as at 31 May 2018 after acquisition related payments for
Sat Internet Services and Open Sky and the additional equity raised
to support working capital and further bolt-on acquisitions. As at
31 May 2018 the Group had cash of GBP7.4m (H1 17: GBP2.0m) and
GBP3.6m of headroom in the HSBC facility (H1 17: GBP1.5m).
Operational Review
The Company took action in the period to strengthen and broaden
the level of expertise on the Board. Christopher Mills was
appointed to the board as Non-Executive Director on May 29.
Christopher has been a long-term supporter and investor in the
Company and has already made significant contributions to Board
level discussions.
The Company is well placed as a strategic partner of BDUK and in
March received a GBP2.1m BDUK grant to carry out field trials to
develop and establish the operating standards of the next
generation of 5G fixed wireless broadband services utilising unused
TV whitespace spectrum to increase superfast wireless broadband
penetration in very rural areas.
Outlook
The Board is confident that the solid performance of the core
business and the recently completed acquisitions will continue for
the remainder of the current financial year and the outlook
therefore remains encouraging. The Company continues to evaluate
further complementary acquisition opportunities and technologies as
part of its growth strategy and is confident of achieving its
previously stated 2020 target of 150,000 customers.
Andrew Walwyn, CEO of BBB commented, "Trading in the period was
strong due to continued customer sign up, improving retention rates
and increased data demands of existing customers. I believe that we
will see further growth in the second half of the year post the
fibre disposal and the increased marketing spend in the JV as
consumers continue to demand faster and more dynamic broadband
services wherever they're located. The first half of the year has
been mainly about consolidating our acquired customer bases and
integrating systems across our networks. This momentum is expected
to continue into the second half, and I look forward to updating
shareholders in due course."
About BBB
BigBlu Broadband plc (AIM: BBB), formerly Satellite Solutions
Worldwide Group PLC (AIM: SAT), is a leading provider of
alternative broadband solutions throughout Europe and Australia.
BBB delivers a portfolio of super-fast wireless broadband products
for consumers and businesses unserved or underserved by fibre.
The Company has a significant target market with 27m customers
in Europe with speeds of under 4 Mb, and a further 1m in Australia
who have been identified as only suitable for either satellite or
fixed wireless broadband.
Acquisitive and organic growth have enabled BBB to grow rapidly
since inception in 2008 during which time the Company has completed
20 acquisitions across nine different countries. It is extremely
well positioned to continue growing as it targets customers that
are trapped in the 'digital divide' with limited fibre broadband
options.
BBB's range of solutions includes satellite, next generation
fixed wireless and 4G/5G delivering between 30 Mbps and 150 Mbps
for consumers, and up to 1 Gbps for businesses. It provides
customers ongoing services including hardware, pre and post-sale
support, installation, billing and warranties whilst offering
various tariffs depending on end user requirements.
Importantly, as its core technologies evolve, and cheaper
capacity is made available, BBB continues to offer ever-increasing
speeds and higher data throughputs to satisfy market demands for
'video-on- demand'. Its alternative broadband offerings present a
customer experience that is similar to that offered by wired
broadband and the connection can be shared in the normal way with
PCs, tablets and smart-phones via a normal wired or wireless
router.
High levels of recurring revenue, increasing economies of scale
and Government stimulation of the alternative broadband market in
many countries provide a solid foundation for the Company as it
targets further organic growth to 150,000 customers by 2020 as
demand for alternative super-fast broadband services increases
around the world.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTDBGDRUGGBGIX
(END) Dow Jones Newswires
July 04, 2018 02:00 ET (06:00 GMT)
Bigblu Broadband (LSE:BBB)
Historical Stock Chart
From Apr 2024 to May 2024
Bigblu Broadband (LSE:BBB)
Historical Stock Chart
From May 2023 to May 2024