Bigblu Broadband Share Discussion Threads

[cravencottage] 05/7/2021 17:53

Dipped my toe in for a few of these today..

I'm dumfouded with the disposal of quickline confirmed and equating to 84p a share that the share price is so low.

Am I missing something?


Harwood has just under 30% of the shares and i'm convinced he'll be looking for a handsome return..

Management have said they're exploring avenues to return surplus cash to shareholders - Bring it on!

[sev22] 02/7/2021 13:24

I thought I would re-circulate Simon Thompson's article dated 26th April 2021 highlighting what an under priced opportunity BBB was then and even more so today.


I always carry out sum-of-the-parts valuations during my research on a company to ascertain whether there is a pricing anomaly to exploit. I also try and identify share price catalysts to narrow the valuation gap, and assess when they are likely to materialise.

BigBlu Broadband, a provider of alternative superfast broadband products, is a prime example. Last autumn, Christopher Mills, founder of Harwood Capital and non-executive director of BigBlu, splashed out £2.26m buying shares in the company, almost all of which was on behalf of North Atlantic Smaller Companies Investment Trust, the fund he runs. Harwood owns a 27.7 per cent interest in BigBlu’s shares.

At the time, I suggested that the growth in BigBlu’s Quickline subsidiary was being seriously underpriced and the stake had potential to be worth as much as the company’s own market capitalisation (‘Exploiting valuation anomalies’, 15 October 2020). That prediction was not far off the mark following BigBlu’s disposal this week. Moreover, it follows last summer’s sale of BigBlu’s UK and European satellite broadband businesses for £37.8m – a 50 per cent premium to the prices paid the company. Even though BigBlu’s share price has risen 30 per cent in the past six months, investors have yet to fully factor in the financial implications of both transactions.

BigBlu Broadband’s eye-catching disposal:

Disposal of Quickline stake for up to £48.6m.
Ongoing interest in Quickline through convertible loan notes.
Expansion in Australasia and Nordics.

Aim-traded BigBlu Broadband (BBB:122p), a provider of alternative superfast satellite, fixed wireless and 4G/5G broadband products, has announced the disposal of its 52.7 per cent-owned Quickline subsidiary for a maximum consideration of £48.6m. That sum equates to 5.8 times the company’s investment, a return that has been produced in less than four years.

Quickline is building its own fixed wireless access networks, supported by increasing amounts of fibre infrastructure, to address the ‘digital divide’ in the UK. The fast-growing business targets poorly served parts of Lincolnshire and Yorkshire and its investment prospects are attractive enough for private equity group Northleaf Capital Partners to pay a multiple of 23 times forecast cash profit to enterprise valuation.

On completion BigBlu will receive £31.1m cash and £5.6m convertible loan notes (CLNs) yielding 4.5 per cent in the acquisition vehicle. In addition, the company is expected to receive a cash earn-out of £10.1m and a further £1.8m in CLN’s based on Quickline’s financial performance in the 12 months to 31 March 2022. Post completion, BigBlu’s cash and cash equivalents of £32.8m will equate to 48 per cent of its own market capitalisation. The combined £7.4m CLNs can convert into 8 per cent equity in the acquirer’s holding company, thus offering potential for further value accretion to BigBlu’s shareholders.

BigBlu focus is now on its two overseas businesses: SkyMesh, a leading Australian satellite broadband provider with 45,000 customers; and a Nordic satellite and fixed wireless broadband business that aims to expand its geographic footprint into Sweden and Finland.

In Australia, SkyMesh targets customers in rural areas outside of the fibre footprint, who only receive a low-speed and low-quality service from traditional fixed telecom broadband suppliers. The aim is to grow the customer base by 10,000 per year through organic channels, and expand the offering into New Zealand. The operation is forecast to report both cash profit and operating free cash flow over £3m this year and has potential for an IPO or disposal, too.

In the Nordics, BigBlu is investing £2m upgrading its fixed wireless network (8,900 subscribers), and should benefit from greater satellite capacity (currently 2,300 subscribers) from the world's leading satellite operators Eutelsat (NYSE /Euronext: ETL) and ViaSat (NSQ: VSAT) to support expansion into Sweden and Finland over the next two years. The Nordics operation is forecast to report a cash profit of £2.2m in the 2021 financial year.

BigBlu’s share price is up 11 per cent since my last buy call (‘Three high growth small-cap plays’, 11 January 2021), and there is still compelling value on offer. Adjusting for cash on the balance sheet and the deferred cash and VLN earn-outs, BigBlu’s enterprise valuation equates to only eight times finnCap’s operating profit estimate of £3.1m for the 2021 financial year. I am raising my target price from 165p to 175p. STRONG BUY.

[weatherman] 11/6/2021 07:13

Completion of disposal -
"The Board has undertaken to review the steps needed to return any surplus cash to shareholders within the current financial year."

[dogwalker] 13/5/2021 11:08

The large gap on the chart, made on 22/23 April down to 108p,is pretty much filled today. Closing that can be the only possible reason for the scale of today's slump so far.

[paulisi] 27/4/2021 08:08

Simon Thompson from IC is very influential on the small cap shares and share prices.Nice jump this morning.

[mfhmfh] 27/4/2021 07:54

Positive write-up by ST in IC.

Target price 175p.

FinnCap target price 180p.

[value hound] 27/4/2021 07:52

Update from Simon T following the planned disposal news, saying "there is still compelling value on offer".

Re the continuing businesses, he says:

BigBlu focus is now on its two overseas businesses: SkyMesh, a leading Australian satellite broadband provider with 45,000 customers; and a Nordic satellite and fixed wireless broadband business that aims to expand its geographic footprint into Sweden and Finland.

In Australia, SkyMesh targets customers in rural areas outside of the fibre footprint, who only receive a low-speed and low-quality service from traditional fixed telecom broadband suppliers. The aim is to grow the customer base by 10,000 per year through organic channels, and expand the offering into New Zealand. The operation is forecast to report both cash profit and operating free cash flow over £3m this year and has potential for an IPO or disposal, too.

In the Nordics, BigBlu is investing £2m upgrading its fixed wireless network (8,900 subscribers), and should benefit from greater satellite capacity (currently 2,300 subscribers) from the world's leading satellite operators Eutelsat (NYSE /Euronext: ETL) and ViaSat (NSQ: VSAT) to support expansion into Sweden and Finland over the next two years. The Nordics operation is forecast to report a cash profit of £2.2m in the 2021 financial year.

[bbluesky] 25/4/2021 18:46

Currently they are running the business into the ground. Great if you have share options, not if you are an employee. Maybe something will change but selfish, cynical capitalism. Big market out there, but looks like they prefer to collect and not to work.

[weatherman] 25/4/2021 14:58

The strategy seems to have changed for BBB. With the market failing to properly value the company they are selling off the business units and planning to return cash to shareholders - although they may retain the Nordic part for the time being. It will be interesting to see what the Australian business is worth - the 180p valuation may be realised sooner than we think if that is sold.

[wobblywilbur] 23/4/2021 12:20

Re 354: It is finnCap

[robsy2] 23/4/2021 12:11

Weatherman- sorry no!

[weatherman] 23/4/2021 11:55

Interesting news towards the bottom of the statement about a possible sale, acquisition or IPO of the Australia business. "The Board will continue to explore all of the options open to it to enhance the value of its interest in SkyMesh which could include a possible disposal of the asset, continuing organic growth complemented by acquisition opportunities or a possible IPO of the business in Australia."

[ash82] 23/4/2021 11:27

I came to same conclusion so I place limit order. No quote on AJ or HL. Australia business revenues growth of 17.7% and EBITDA growth of 21.7% looks good for future

[weatherman] 23/4/2021 11:23

Great - do you have a link to the broker upgrade - I guess it is finnCap?

[robsy2] 23/4/2021 10:53

Looks good to me weatherman.house broker has an updated price target of 180p.

[25october1969] 23/4/2021 10:25

Agree weatherman and for this reason I bought more this morning when the opening price fell. I guess what is missing is investor appetite for the type of share but hopefully that will change, if they promote the company properly

[weatherman] 23/4/2021 10:01

In 2020 the Nordic and Australia business had adjusted EBITA of £5.7m before central costs (£1m), and turnover of £22.9M. A multiple of only 10 to the EBITA would value the remaining business at £57m. Add in £7.4m net cash, plus up to £48m for Quickline and we're looking at a current value of c.£110m against market cap of £70m. Have I missed something?

[weatherman] 23/4/2021 08:42

The market doesn't know how to value the remainder. They seem to be becoming an investment vehicle with profitable exits, but the share price is not fully matching the underlying value created.

[paulisi] 23/4/2021 08:04

The special dividend could be over £1 a share - no wonder the share price has jumped 25%

[weatherman] 23/4/2021 07:28

They only owned ~52% [edit] of Quickline - so a reasonable move - they obviously think there is stronger growth in Nordic / Australia & Asia - ongoing turnover there of more than £22m. Apply a multiple of turnover to that and what is it worth? After disposal they will have around £50m in cash or loan notes. Mkt cap c.£61m.

[value hound] 23/4/2021 07:17

Yes - a special divi, plus a new investment and/or further development in Aus & Nordic ops looks on the cards.

[paulisi] 23/4/2021 07:12

So, the main business is effectively sold(bar a small holding). Special dividend sounds like it is probable. I suspect they will de-list at some stage.

[paulisi] 31/3/2021 07:26

Decent set of results.

[rossco] 29/3/2021 19:27

Finals arriving on Wednesday.