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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Bigblu Broadband Plc | BBB | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 32.00 | 07:44:28 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 32.00 |
| Industry Sector |
|---|
| SOFTWARE & COMPUTER SERVICES |
| Top Posts |
|---|
Posted at 03/9/2024 21:32 by value hound Write-up by Simon Thompson.FWIW, I decided to hang on to the ones I have - but wasn't feeling courageous enough to average down; will let it play out. Here's the article: --- Investors could double their money with this break-up An alternative broadband services provider has reined in guidance, but could this be the bottom? Aim-traded alternative broadband services provider Bigblu Broadband (BBB:28p) has released a mixed set of interim results. In May 2024, the group exited its Nordic business for a nominal sum, albeit the buyer assumed £1.3mn of net working capital creditors and liabilities and there is a contingent earn-out agreement. The disposal led to a £0.73mn below-the-line loss on discontinued operations. In addition, BigBlu incurred £1mn of exceptional charges relating to corporate activity, restructuring and the write-off of some development costs on a new fully integrated cloud-based Microsoft IT system for its Australian subsidiary, SkyMesh. The reported pre-tax loss of £2mn also included a £0.15mn foreign exchange currency hit. Adjust for these items and the group just about operated at break-even at the pre-tax level. Building a platform for SkyMesh to grow As previously reported, competition from Starlink, a wholly-owned subsidiary of American aerospace company SpaceX, has impacted SkyMesh's churn rates. In the six months to 31 May 2024, SkyMesh reported an underlying annualised churn rate of 32 per cent and only increased its customer base by 700 to 52,300 customers. So, to boost customer retention rates, SkyMesh has been working closely with its major satellite provider, NBN Co, to bring more affordable uncapped data packages to market. It’s working as a quarter of the customer base has now migrated to new deals, but it has led to lower average revenue per user, which impacts the gross margin SkyMesh earns. Sensibly, SkyMesh secured a distribution package with Starlink in December 2023 to provide high-speed internet to businesses and small office customers in Australia. BigBlu invested £2.1mn in Starlink stock to support future orders as it looks to scale this side of the business. Combined with reseller agreements with Optus for 4G/5G fixed wireless (launched in July 2024), Vocus for fibre and OneWeb, SkyMesh has doubled its total addressable market to more than 2mn potential customers. However, SkyMesh’s cash profits have been under pressure, falling from £2.2mn to £1.7mn (pre-central overheads of £0.6mn) in the latest six-month period. This explains why house broker Cavendish cut its full-year group cash profit estimate by 25 per cent to £3mn and now expects adjusted pre-tax profit of £2mn and earnings per share (EPS) of 2.8p, down from £3.6mn and 7.1p, in 2023. Also, BigBlu’s net debt has risen sharply from £0.3mn to £4.9mn due to the hefty investment in working capital and IT systems as well as the cash cost of the one-off charges. Share price at a nadir? The positive for shareholders is that the Australian business is now positioned to deliver growth. Cavendish's downgraded forecasts still point to SkyMesh’s annual cash profit rising 25 per cent to £4.5mn in the next financial year, an outcome that should drive pre-tax profit and earnings per share (EPS) up two-thirds to £3.2mn and 4.6p. BigBlu’s directors are also committed to maximising shareholder value, either through an IPO, trade sale, management buyout or private equity transaction of the business. It would undoubtedly release value as SkyMesh is in the price for only £15mn (25.6p) on a sum-of-the-parts basis, or 4.2 times depressed current-year cash profit estimates and only 3.3 times 2025 forecasts. Telco peers are rated on a multiple of 8-10 times cash profit. I have taken account of group net debt of £4.9mn (8.4p) and BigBlu's £6mn (10p) stake in Quickline, a company that is building fixed wireless access networks to address the ‘UK digital divide’, in my calculations. So, although BigBlu’s share price has fallen from 38.5p since I rated the shares a hold (‘Bigblu disappoints, but a break-up is highly likely 20 May 2024), the potential to more than double your money on a break-up makes them worth holding onto. Hold. |
Posted at 20/12/2023 21:44 by weatherman hxxps://simplywall.s |
Posted at 13/6/2023 15:27 by value hound Encouraging move up today. Obviously, it could be worth a lot more if and when it spins out its Skymesh subsidiary operation in Australia. Chris Mills topped up at 48.5p in March to go to over 25% and he's infinitely smarter (and richer...) than me so I was happy to buy at 42p.According to Simon Thompson, when he tipped it on 1st March at 54pps, they're forecast by FinnCap to make £5.6m on revenue of £31.9m this year. He thinks a realistic valuation for Skymesh is something around 95p a share. I'd be a lot more pessimistic - but still..! In addition, there's BBB's Nordic business which is said to be recovering - so as and when the listing does happen, BBB should comfortably double and will still be undervalued and Chris Mills has a great track record of making sure this kind of thing does come to pass. He did a Vox markets podcast earlier this week in which BBB wasn't mentioned at all - so it made me wonder if he couldn't say anything about it as he's on the BoD and there's imminent news? That said, I don't think he mentioned them on the last Vox Markets interview either. |
Posted at 06/3/2023 11:29 by hjs Bbb is trading at a huge discount when you take into account Skymesh valuation which once floated will give a moderate valuation of 96p. Imo when skymesh gets floated in Ausiland, I expect the valuation to be over £1.15 to 1.30.Do your own DD. |
Posted at 04/3/2023 15:36 by weatherman Read article now. ST in IC suggests skymesh alone worth 96p of bbb if floated in Oz |
Posted at 05/12/2022 08:15 by weatherman Another acquisition - and this statement. "In addition, the Board also continues to explore all options to realise value for BBB shareholders from SkyMesh, which could include a potential ASX listing of SkyMesh." |
Posted at 23/9/2021 01:39 by plasybryn Can you expand on your thoughts?Do you think it is still good value at this price? I guess we will drop to circa 80p on ex dividend day. Not many buying in pre the dividend which is perhaps strange. Perhaps more will buy post the ex dividend date at the lower price. I wonder what the directors expected to happen with the share price on the announcement of such a massive return of cash. The residual business looks set fair but the number of customers seems small which I don't understand. |
Posted at 06/9/2021 11:05 by sherifff3 when do we need to have the shares held by?? when is the announcement come on BBB update us! |
Posted at 31/8/2021 18:17 by cravencottage Targeting sky high returnsA provider of alternative superfast satellite, fixed wireless and 4G/5G broadband products, is returning cash to shareholders and is delivering eye-catching growth from operations Down Under August 31, 2021 By Simon Thompson Cash return of £25.9m in October from £33m net cash pile 52.7 per cent-owned Quickline subsidiary sold for maximum consideration of £48.6m, or 5.8 times cost of investment Deferred consideration of £10.1m cash and £1.8m loan notes subject to Quickline’s performance in 12 months to 31 March 2022 8 per cent equity stake worth £5.6m retained in Quickline Australian SkyMesh business delivers 50 per cent cash profit growth in first half Aim-traded BigBlu Broadband (BBB:116p), a provider of alternative superfast satellite, fixed wireless and 4G/5G broadband products, is returning 45p a share to shareholders following the disposal of the group’s 52.7 per cent stake in Quickline to private equity group Northleaf Capital Partners. Funded by government grants, Quickline is building its own fixed wireless access (FWA) networks, supported by increasing amounts of fibre infrastructure, to address the ‘digital divide’ in the UK. It’s a fast-growing business which is why BigBlu achieved an exit price of 23 times forecast cash profits. Sensibly, BigBlu has retained an 8 per cent equity stake worth £5.8m to benefit from further capital upside. The focus now is on the group’s two international businesses: SkyMesh, an Australian satellite broadband provider that targets customers in rural areas outside of the fibre footprint; and a Nordic satellite and FWA broadband business that has been restructured and is now planning expansion into Sweden and Finland. In the first half, SkyMesh’s cash profits surged by 50 per cent to £1.8m on 42 per cent higher revenue of £10.5m, buoyed by 5,700 new customer additions (to 48,700). They are more profitable, too, as 70 per cent of new take-ups are opting for A$100-per-month unlimited data tarrifs, says chief executive Andrew Walwyn. Skymesh had a 36 per cent share of the market and the aim is to increase the user base to 80,000 over the next three years through organic growth – it has delivered double-digit growth for the past three years – and regional expansion. For instance, SkyMesh will launch a service next month in New Zealand with Asia Pacific broadband satellite operator Kacific. Bolt-on acquisitions are also being considered. SkyMesh delivered free cash flow of £1.4m in the six-month period and house broker finnCap expects both free cash flow and cash profit to exceed £3m in the full year. Churn was high in the Nordic business after BigBlu took the decision to dismount lossmaking masts, which cut the user base by 3,300 customers. However, finance director Frank Waters says that the customer base has stabilised around 9,500 and with a network upgrade programme due to complete shortly and new satellite offerings to be launched in November, then the streamlined infrastructure-light business is poised to return to growth. In addition, next year’s copper switch-off across Norway will add 200,000 addressable households to BigBlu’s 5G FWA target market. The investment opportunity here is being seriously undervalued. Deduct the £33m cash pile, £5.6m equity stake in Quickline and £11.9m deferred consideration from BigBlu’s £66.8m market capitalisation and the Nordic and Australian businesses are being valued at £16.3m (28p a share), or 5.5 times finnCap’s full-year operating profit estimate. SkyMesh has to be worth £36m (62p), and considerably more to a bidder, given its robust growth prospects. My target price is 175p. Buy. |
Posted at 02/7/2021 13:24 by sev22 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. |
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