TIDMBBB
RNS Number : 4264T
Bigblu Broadband PLC
20 March 2023
Bigblu Broadband plc
('BBB', the 'Company' or the 'Group')
Audited final results for the year ended 30 November 2022
Strong revenue growth, expanded product range and primed for
further value realisation
Bigblu Broadband plc (AIM: BBB.L), a leading provider of
alternative super-fast and ultra-fast broadband services, announces
its audited results for the period ended 30 November 2022 (the
"Period"). The Company has operations in Australasia, the Nordics
and a residual shareholding in Quickline Communications
("Quickline").
During the Period, BBB delivered positive progress with strong
revenue and profit growth in the Australasian region. The trading
performance of the Norwegian business was impacted in the year by a
cyber-attack to its satellite provider and by delays in the 5G
product launch. Quickline, which the Group still has a retained
interest of 4.0% in, has undergone significant scaling since BBB
sold its majority shareholding in this company in June 21 with the
support of its new owner Northleaf Capital Partners, including
GBP70m of additional capital, and can now address around 300,000
premises with its hybrid Fixed Wireless and Full Fibre
infrastructure.
Whilst the Company operates in several different geographies,
the directors remain confident in the future growth prospects of
the business and the Board will continue its focus on ensuring it
can maximise the inherent value within the Company and deliver
further shareholder returns.
Financial Highlights
-- Total revenue increased 15.1% to GBP31.2m (FY21: GBP27.1m)
-- Like for like revenue growth(1) of 12.3% (FY21: 15.3%)
-- Average Revenue per User per Month improved 9.5% to GBP43.03
(FY21: GBP39.30) due in the main to an improved product mix
-- Adjusted EBITDA(2) in the period improved by 11.4% to GBP5.1m (FY21: GBP4.6m)
-- Adjusted PAT(3) was GBP2.6m (FY21: GBP2.5m)
-- Adjusted EPS(4) profit of 4.4p (FY21: profit 4.3p) with
reported EPS loss of 5.0p (FY21: Profit 46.9p)
-- Adjusted Operating cash inflow(5) of GBP5.8m (FY21: Inflow GBP5.2m)
-- Adjusted Free cash inflow(6) of GBP3.7m (FY21: inflow GBP2.1m)
-- Net cash(7) at 30 November 2022 was GBP4.2m (FY21: GBP5.2m)
after the payment of GBP1.2m following the acquisition of the
customers and assets of Clear Networks (Pty) in January 2022.
Operational Highlights
-- Total customers at the period end were 59.4k (FY21: 58.8k) of
which Australasia represents 51.5k customers (87%).
-- The acquisition of c.2.2k satellite and fixed wireless
customers together with certain business assets of Clear Networks
(Pty) Ltd ("Clear") ISP in Australia, was completed post regulatory
approval in January 2022.
-- The distribution agreement the Norwegian business entered
into with Telenor is providing next generation ultrafast broadband
via Fixed Wireless Access using 5G technology ("5G FWA"),
delivering speeds up to 500 Mbps with unlimited data packages.
Although at the start of the year this was running six months
behind schedule, due to equipment shortages, it has now reached
c.1k customers with month-on-month growth and significantly lower
annualised churn rates, reflecting greater customer satisfaction
with the products.
-- On 21 December 2021 the Company signed a Distribution Partner
Agreement with OneWeb, to distribute low Earth Orbit ("LEO")
satellite based broadband services.
-- Progress in New Zealand ("NZ") market with our Asia Pacific
broadband satellite partner, Kacific Broadband Satellites Group was
initially slow however we are pleased to report that NZ has fully
opened its borders after the long pandemic closure, which will
allow us to drive activity alongside new products being launched in
the market. We have also recruited a local experienced sales
executive, in the country, and progress is accelerating.
-- Post period end, BBB acquired the Satellite operations of
Harbour ISP PTY LTD, a subsidiary of Uniti Group LTD in Australia
(the "Acquisition"), with the consideration paid on completion of
AUD$4.72m (GBP2.7m), paid from existing cash resources. This
acquisition, combined with the Clear acquisition, will result in
SkyMesh having an enlarged market share of 45% of the NBN Co
satellite market across Australia, focused primarily in the rural
and suburban market segments.
1 Like for like (LFL) revenue treats acquired businesses as if
they were owned for the same period across both the current and
prior year whilst business disposed of in the period are excluded
from the calculation. Such numbers are adjusted for constant
currency and non-recurring items such as government support.
2 Adjusted EBITDA is stated before interest, taxation,
depreciation, amortization, share based payments and exceptional
items. It also excludes property lease costs which, under IFRS 16,
are replaced by depreciation and interest charges.
3 Adjusted PAT represents adjusted EBITDA less interest,
taxation, depreciation, and amortisation, adjusted for items of an
exceptional nature, being impairment of Fixed Assets, amortisation
and deferred tax adjustments.
4 Adjusted EPS is adjusted PAT, divided by the weighted average
number of shares over the period.
5 Adjusted Operating cash flow relates to the amount of cash
generated from the Group's operating activities and is calculated
as follows: Profit/(Loss) before Tax adjusted for Depreciation,
Amortisation, Share Based Payments and adjusting for changes in
Working Capital and non-cash items and excludes items identified as
exceptional in nature.
6 Adjusted Free cash flow being cash (used)/generated by the
Group after investment in capital expenditure, servicing of debt
and payment of taxes and excludes items identified as exceptional
in nature.
7 Cash / Net debt excludes lease-related liabilities of GBP1.4m
of under IFRS 16 (FY21 GBP1.4m).
Key Financials
During the year there was a focus on launching new products in
new territories, with Telenor 4G/5G FWA in Norway and Kacific
Satellite in NZ as well as significant marketing campaigns to
migrate c.9k customers in Australia to more suitable products which
the business believe should help to reduce churn in the future.
Total revenue was GBP31.2m, up 15.1% (FY21: GBP27.1m) with a
strong recurring revenue remaining above 90% of total revenue.
Total like-for-like (LFL) revenue for the Continuing Group in the
period was GBP30.4m representing 12.3% growth.
Balancing margin control with continued focus on overheads
during the period resulted in an adjusted EBITDA for the period of
GBP5.1m, representing an adjusted EBITDA margin of 16.3% compared
to GBP4.6m in FY21 and an adjusted EBITDA margin of 16.9% despite
the challenges of a Cyber Attack and the costs of launching new
products in new territories.
Andrew Walwyn, Chief Executive Office of Bigblu Broadband plc,
commented.
We are very pleased with the overall performance of the Group.
We started the year with a couple of setbacks, especially in our
Nordic business, but we have continued to focus on customer service
and providing our customers with attractive packages. Our
Australian business has complemented its organic growth opportunity
with two acquisitions and we will continue to target suitable
bolt-on opportunities.
The Board remains focused on maximising value and returns for
shareholders. The combination of strong underlying operating
cashflows, favorable market dynamics and opportunities available to
our business units provides a strong backdrop for delivering
enhanced shareholder value."
For further information:
Bigblu Broadband Group PLC www.bbb-plc.com
Andrew Walwyn, Chief Executive Officer Tel: +44 (0)20 7220
Frank Waters, Chief Financial Officer 0500
finnCap (Nomad and Broker) Tel: +44 (0)20 7220 0500
Marc Milmo / Simon Hicks / Charlie Beeson
(Corporate Finance)
Tim Redfern / Harriet Ward (ECM)
About Bigblu Broadband plc
Bigblu Broadband plc (AIM: BBB.L), is a leading provider of
alternative superfast and ultrafast broadband solutions throughout
Australasia and the Nordics. BBB delivers a portfolio of superfast
and ultrafast wireless broadband products for consumers and
businesses typically unserved or underserved by fibre.
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 significant organic
growth as demand for alternative ultrafast broadband services
increases around the world.
BBB's range of solutions includes satellite, next generation
fixed wireless and 4G/5G FWA delivering between 30 Mbps and 500Mbps
for consumers, and up to 1 Gbps for businesses. BBB provides
customers with a full range of services including hardware supply,
installation, pre-and post-sale support, billings, and collections,
whilst offering appropriate tariffs depending on each end user's
requirements.
Importantly, as its core technologies evolve, and more
affordable capacity is made available, BBB continues to offer
ever-increasing speeds and higher data throughputs to satisfy
market demands for broadband and broadband services. BBB's
alternative broadband offerings present a customer experience that
is broadly 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.
CHIEF EXECUTIVE'S REPORT
We started the year with a couple of initial setbacks, including
a cyber-attack to one of our satellite providers affecting c.3k
customers in Norway, as well as a delayed 5G launch in the region
due to chip shortages. Despite this we are satisfied with the
continued progress shown by the Group in the Period.
Extensive effort has been made across the business units to
switch customers into more attractive packages at the expense of
net adds, with c.9k migrations in the period and net adds of 0.6k,
of which c.2.2k were associated with the Clear acquisition in
Australia. We ended the period with 59.4k customers. The recently
completed Uniti transaction has increased our total customer base
to c.66k and we remain focused on our strategy in Australia of
organic growth combined with targeting suitable bolt-on acquisition
opportunities. In addition, we remain focused on creating and
realising shareholder value for BBB Shareholders and in this
regards we are exploring all options for the Australasian business
including a potential ASX listing.
The necessary investment made to improve our offerings in
Norway, resulted in c.1k new FWA 5G customers at the period end.
Work is still required to improve the performance of the Norwegian
business including product offerings, costs and systems. We also
remain focused on ensuring our operations are run as efficiently as
possible and post period end regrettably we have had to make some
headcount reductions in our Norwegian business.
Despite the global economic environment, the Group continues to
demonstrate strong year-on-year revenue growth underpinned with a
high percentage of recurring revenue. We remain confident in our
ability to deliver further attractive returns for shareholders from
our operations in Australasia and to realise a return from the
Norwegian business together with the 4.0% equity stake in
Quickline. As we enter the new financial year, there are
opportunities for each business unit to deliver further shareholder
value as we continue to support customers unserved and underserved
in the digital divide, whilst at the same time improving our
product range. Operationally we will remain focused, in conjunction
with our network partners, on increasing gross adds and reducing
churn as well as ensuring our customers are on the most suitable
packages and receive the best customer support. Alongside this, we
will continue to seek to deliver against our strategic objective of
maximising and realising shareholder value.
Operational Review
The Group has two distinct businesses, in Australasia and the
Nordics, with a total of c66k customers post the Uniti acquisition
and given their respective strengths, each of the business units
has potential opportunities to enhance further shareholder
value.
Australasia
Our Australian business SkyMesh, is the leading Australian
satellite broadband service provider having been named Best
Satellite NBN Provider for the fourth year in succession
(2019-2022). SkyMesh has continued to be the market leader in the
satellite broadband market with a total market share post the
recent Uniti transaction of c.40% (FY21: c.36%).
SkyMesh is consolidating its purchase of Clear Networks and
expanded into NZ during the year and the recently announced
acquisition of the satellite customers of Uniti further strengthens
our position in the market.
Our Australasian business performed well during the year. As a
result of a growth in customers together with ARPU improvements,
SkyMesh revenues increased to GBP26.5m (PY: GBP21.8m), up 21.6%
(LFL excluding the Clear acquisition is 14.2%) on prior year, with
adjusted EBITDA of GBP5.0m, up 25.1% on prior year (FY21: GBP4.0m).
The Clear acquisition contributed EBITDA of GBP0.3m. This trading
performance supported both a positive adjusted operating cash
inflow(3) of GBP5.6m and a positive adjusted underlying free cash
flow, before group transfers of GBP4.4m. Customer numbers closed at
51.5k at year end, an increase of 3.5% on the prior year (FY21:
49.7k), which includes the customers acquired from Clear
(2.2k).
Post period end, we completed the acquisition of the Uniti
satellite operations with c.6k customers which are now in the
process of being transferred to SkyMesh by the Company's half
year.
The emergence of 5G and LEO satellite technologies is expected
to lead to accelerated uptake of non-fibre broadband internet
services in Australasia. Starlink has launched in the region with
strong initial promotional offers. This is impacting current churn
rates and we are monitoring such marketing activity. We believe we
can counter such threats to the business by expanding the product
offerings as well as addressable markets. Further acquisitions and
new product opportunities are emerging as SkyMesh heads into 2023
with its product offering likely to offer faster speeds / capacity,
leading to continued increases in customer numbers.
The Board's focus will be on organic growth with our network
partners together with suitable accretive bolt on acquisitions that
could accelerate the Company's presence into the wider Australasia
region and importantly accelerate the scaling of the Australasian
business. In addition, the Board continues to explore all options
to realise value for BBB shareholders from SkyMesh, which could
include an ASX listing of SkyMesh.
Nordic Region
Reflecting the decrease in customer numbers associated with the
impact of the satellite cyber-attack on the satellite provider to
our Norwegian business and the demounting of non-profitable sites,
BB Norge (rebranded Brdy AS.no), ended FY22 with customer numbers
at 7.9k, down on the previous year (FY21: 9.1k). Consequently,
revenues for BB Norge were GBP4.0m, down 13.0% on the prior year
(FY21: GBP4.6m). After some initial delays, the 4G/5G FWA revenue
stream has grown in FY22 and is now contributing to early growth in
new customers and revenue. Adjusted EBITDA for the region was
GBP1.0m, down 47.3% on prior year (FY21: GBP1.9m). Adjusted
operating cash was an outflow of GBP0.1m and adjusted underlying
free cash flow was an outflow of GBP1.0m following capital
expenditure of GBP0.7m and set up costs associated with the 5G FWA
of GBP0.2m. As noted above, post period end further cost saving
initiatives were implemented in the region and regrettably we have
had to make some headcount reductions in this business.
During the Period the Group invested in refining and enhancing
the Company's service proposition in the Nordic market to support
the next generation ultrafast broadband via wireless 5G FWA,
delivering speeds up to 500 Mbps with unlimited data packages. As
reported previously this is beginning to show early momentum with
growing traction in the market (c.1k customers) and great customer
satisfaction being reported.
The Board continues to evaluate the opportunity to refine and
enhance the Group's service proposition in the Nordic market.
Initiatives include the launch of new satellite offerings across
the region offering speeds of 50Mbps and unlimited capacity. The
Directors consider that the Group's ability to offer a combination
of services including our own Fixed Wireless network, 5G FWA via
Telenor and satellite solutions in the Nordics provides the Group
with potentially scope to expand its presence and reach in this
region and create shareholder value. At the same time the Board are
examining all opportunities to realise shareholder value including
full or partial disposal, partnership, or a merger.
Operational Performance
Net customer growth in 2022, was approximately 0.6k (post the
1.8k loss of customers in the Nordics following the cyber-attack
event and demounting, and the 2.2k net adds from the Clear
acquisition), resulting in a closing continuing customer base of
59.4k (FY21: 58.8k).
Total revenue including recurring airtime and other income
(equipment sales and installation sales) covering continuing
operations for 12 months shows a solid underlying performance of
GBP31.2m (FY21: GBP27.1m) with revenue growth of 15.1%.
Revenue in satellite was GBP24.7m, up on prior year by 14%
(FY21: GBP21.7m) due in the main to customer growth, plan switching
in Australasia, and the satellite base acquired from Clear. Revenue
in fixed wireless was GBP4.9m, up on prior year by 7% (FY21:
GBP4.6m) Revenue in 5G was GBP0.9m in the year (FY21: GBPnil) due
to growth in Norway. PLC added GBP0.7m (FY21: GBP0.7m) from
services related revenue.
Recurring revenue, defined as revenue generated from the Group's
broadband airtime, which is typically linked to contracts at
GBP28.9m represented 93% of total revenue (FY21 GBP25.6m
represented 94% of total revenue).
Average Revenue Per User ("ARPU") increased 9.5% year on year to
GBP43.03 (FY21: GBP39.30) due in the main to a higher percentage
mix of larger packages across the Australian region. Average
underlying customer churn increased to 28.4% (FY21: 21.3%) as a
result of the removal of COVID Support tariffs in Australia and the
continued fibre encroachment in Norway.
Adjusted EBITDA for the period was GBP5.1m, showing a solid
underlying performance, and representing an adjusted EBITDA margin
of 16.3% compared to GBP4.6m in FY21 on a like for like basis and
an adjusted EBITDA margin of 16.9%. This continues to demonstrate
the progress made in driving the quality of the consumer offering,
the margin review work being undertaken and improving cost
efficiencies.
Accelerating Technology Evolution
Products
The Nordics have entered the 5G market through an agreement with
Telenor allowing the Group to promote a 'white-label' offering of
self-install wireless broadband, which is a niche product and,
although it has run approximately six months behind schedule, at c
1k customers at the period end it will allow the Group to target a
far wider customer audience across Norway.
Thanks to our partnerships on Satellite broadband access, we
have also been able to stabilise our customer base allowing us to
now have a good foundation for the launch of the next generation
satellites over the coming years.
Across Australasia, SkyMesh expects to be able to offer a fibre
like service via Satellite from the sky, with 100 Mbps download
speeds, <70 milli-second latency and unlimited data allowances
across its key territories over the next couple of years with the
launch of significant new satellite capacity. With the acquisition
of Clear Networks there will also be an increased focus on the
business market and new product offerings from NBN Co will allow
expansion into the fixed wireless market with a view to combining
satellite and fixed wireless technologies to offer high quality
services to both the residential and business sectors in regional
and remote areas.
Marketing
Whilst we use a digital-first strategy to both acquire and
retain new and existing customers we also promote our
Refer-a-friend programmes in country. For customer acquisition, we
target in-market prospects based on geography, broadband speed and
purchase intent. Channels used vary depending on in-country
results, blending Facebook, Google, Bing and lead-generation
partners in order to achieve our internal KPI's in terms of cost
per lead and cost per activation. We deploy a suite of engaging
content from ad copy, through to static display ads and customer
testimonial videos. Most important of all is word of mouth or
customer referral, hence the importance of looking after our
existing customers by proactively migrating them to more
appropriate tariffs in our Australasian business.
Continued Government Support
We remain focused on helping governments in our current markets
to achieve their targets of delivering ultrafast and gigabit
capable broadband connections nationwide. We remain convinced that
it will be difficult for governments to meet these challenging
targets without the use of alternative technologies such as fixed
wireless and satellite broadband. Indeed, many governments have
already launched 'intervention schemes". These are aimed at
stimulating the market and educating consumers about the options
available to them - given that full fibre broadband to the premises
is unlikely to become a reality for many customers.
In Australia, SkyMesh commanded a 55% market share of net new
adds under the Government funded NBNCo scheme during the last
financial year. This performance has continued into Q1 FY23.
Post Balance Sheet Events
We highlight the following post balance sheet events:
SkyMesh, Australia
The Company announced that its fully owned Australian business,
SkyMesh PTY LTD had completed the acquisition of the Satellite
operations of Harbour ISP PTY LTD, a subsidiary of Uniti Group LTD
in Australia (the "Acquisition"). The total cash consideration paid
on completion was AUD$4.72m (GBP2.7m) with a retention of AUD$0.2m
(GBP0.1m), to be paid in March 2023 post reconciliation of customer
numbers. The cash consideration paid on completion was satisfied
from existing cash resources including our revolving credit
facilities with Santander. The satellite operations acquired
consisted of c.6k customers. The customer base is being transferred
to SkyMesh who will provide full ongoing support services from its
Australian Customer Engagement Centre. Pursuant to the terms of the
acquisition agreement, Uniti will continue to provide services for
up to three months post completion to ensure a smooth transition of
the customer base. As previously announced, the Directors
anticipate that the acquired operations are expected to generate
annualised revenues of c.GBP2.5m and EBITDA of c.GBP0.7m with
positive cash generation, enabling the Group to continue to
reinvest and grow the business in the Australian market. The
Directors believe that the profitability of operations acquired
should improve under Bigblu Broadband's ownership due to the
Group's better operational gearing, economies of scale and
SkyMesh's dedicated focus on customers in this sector.
Post Period redundancies / reorganisations
Since the year end the Group has gone through a reorganisation
of our Norwegian business and also reflected on our reduced UK
scale. This has resulted in redundancies in our Norway business and
our UK head office.
In Norway we are examining splitting the business into two legal
entities, recognising the different attributes of each being our
Satellite and 5G technology business, typically lower CAPEX, and
our infrastructure business, typically higher CAPEX. This has
resulted in making approximately 30% of the workforce in our Nordic
business redundant in the first quarter of 2023, with an annualised
cost saving of c.GBP0.4m.
Due to the size of the Group, after the recent disposals in FY20
and FY21, the Group has sought to reduce head office costs to a
level sustainable for the current continuing operations. This will
result in approximately 75% of the central team being made
redundant, with annualised savings in the region of GBP0.5m. The
internal process has commenced with all planned redundancies
expected to be complete by May 2023.
Strategy
Within the business units, we have worked continuously with our
network partners in the regions to offer our customers a selection
of products that best suits their needs. We continue to see the
demand for our products increasing with an element of home working
in the Nordics and Australasia now being the norm, and the
consequential need for faster broadband solutions to the home.
Whilst recognising the pressure on individuals and companies'
disposal income and profits, we firmly believe that the updated
solution set that the Group offers to its customers is becoming
more important and a very necessary utility cost. The opportunity
in the super-fast broadband market remains exciting across the
businesses as it is changing significantly and accelerating at
pace. Where in the past a service of 30Mbps was seen as an
appropriate solution to a typical customer, nowadays this is upward
of 50Mbps and our satellite, fixed wireless and FWA 5G solutions
will ensure that all unserved and underserved customers can receive
an appropriate solution. We are pleased that our network partners
are continuously developing products to meet customer needs.
Specifically, following the recent acquisitions for the SkyMesh
business in Australia, the Board believes that its strategy of
organic growth complemented by further bolt-on acquisitions should
accelerate the Company's presence into the wider Australasia region
as it considers all options to realise value for shareholders,
including a potential spin out ASX listing, as previously
announced. The Board continues to believe the business has the
potential to achieve 100,000 customers in the region over the next
three years through organic and acquisitive growth.
In Norway, following the launch of new FWA 5G products and the
new Satellite offerings, we are showing early signs of stabilising,
although the business remains cash consumptive.
The Board will continue to look at all opportunities to maximise
shareholder value from its operations in Australasia, Norway and
its retained 4.0% stake in Quickline.
Outlook
The Group has positioned itself at the forefront of the
alternative super-fast and ultrafast broadband industry in its
chosen markets. Similar to many businesses, there are current
headwinds which require addressing and consideration in how we
operate and deliver services, including existing and new customers
disposable incomes, inflationary pressures together with
competition from other providers such as Starlink. We continue
taken the actions necessary in carefully extending our product
offerings, upgrading our systems and reducing our cost base to
address such challenges head on.
Since the period end, the Group is growing customers, revenues
and profitability, supported by the Harbour acquisition. The Group
has continued its objectives of widening the product offerings in
each territory with our Network Partners while still benefiting
from the strong visibility afforded by the high percentage of
recurring revenues. Across our operations, w ork continues to
improve the performance by upgrading the systems and reducing the
cost base.
We continue to develop products and solutions with our network
partners that will enable customers to operate as effectively as
possible, particularly at a time where increasing numbers of
customers are likely to be working from home, whether full time or
part time.
The Board believes that the Group has valuable assets that have
established important strategic positions in in their respective
territories and the Board therefore believes that it is well
positioned to ensure it can continue to focus on maximising and
delivering enhanced shareholder value.
Andrew Walwyn
CEO
20 March 2023
FINANCIAL REVIEW
2022 was another important year for the Group having
demonstrated strong progress against its internal and market
expectations for Revenue, EBITDA and cash targets as well as
identify and complete important acquisitions in Australia in the
period and just after. We reviewed and increased our Revolving
Credit Facilities ("RCF") with continued support from Santander and
the Group generated adjusted operating cash in excess of 100% of
EBITDA.
The focus of the Board now turns to creating additional
shareholder value from the remaining business units being our
Australasian operations (SkyMesh Australia, Brdy New Zealand) and,
our Nordics business (Brdy). In addition, the Company also
continues to hold a valuable minority interest in Quickline.
The Board remains focused on delivering further increases in
shareholder value from its remaining business units through organic
growth whilst considering selective accretive acquisitions in the
territories we operate in.
Financial Review
Total revenue including recurring airtime and other income
(equipment sales and installation sales) in the period was GBP31.2m
(FY21: GBP27.1m).
Adjusted EBITDA was GBP5.1m (FY21: GBP4.6m), representing an
adjusted EBITDA margin of 16.3% (FY21: 16.9%).
Depreciation, including 'right of use assets', increased to
GBP3.0m in FY21 from GBP1.4m in FY21, an increase of GBP1.6m
analysed as follows; depreciation associated with the tower upgrade
program investment in Norway in FY21 (GBP0.5m), an impairment write
down of old assets in the Norwegian region (GBP1.0m), and the
assets acquired through the Clear acquisition (GBP0.1m)
Amortisation increased to GBP0.7m in FY22 from GBP21k in FY21
due to the amortisation on the customer base acquired from Clear
Networks in the year (GBP1.4m), which will be written off over a
2-year period from acquisition.
Finance costs were GBP0.1m in FY22 relating to the undrawn RCF
facility in the period compared with GBP0.8m in FY21 where there
were drawn RCF facilities.
Key Performance Indicators
The Group utilises several Key Performance Indicators ('KPI's')
to measure performance against our strategy. A description of these
KPI's and performance against them is set out below.
KPI 2022 2021 Description 2022 performance
Represents total gross
organic connections plus
acquisitions, less disposals,
less lost customers (churn)
Customer and base management, including 1% increase despite cyber-attack
Base 59,385 58,832 demounting and delayed 4G / 5G launch
--------- --------- ------------------------------------ ---------------------------------
Net connections split c.1.8k
Australia and c.0.5k Norway.
Focus during period was
on switchers with c 9k
Represents gross connections during the period. Switchers
in the period less lost arise where we proactively
customers (churn) in the migrate a customer to a
Customer period. Includes M&A and more appropriate tariff
Net Connections 2,336 6,024 excludes exceptional churn. during the period.
--------- --------- ------------------------------------ ---------------------------------
Gross underlying churn
defined as the number of
subscribers who discontinue
their service as a percentage Underlying churn rate of
of the average total number 30.3% (FY21: 28.6%) in
of subscribers within the Australia following removal
period and excludes exceptional of COVID support and 22.4%
churn in association with (FY21: 15.2%) in Norway.
Gross Underlying the demounting program (35.1% (FY21: 39%) in Norway
Churn 28.4% 21.3% in Norway Including demounting churn)
--------- --------- ------------------------------------ ---------------------------------
ARPU GBP43.03 GBP39.30 Calculated by dividing Higher by 9.5% due in the
total revenues from all main to improved product
sources by the average mix.
customer base
--------- --------- ------------------------------------ ---------------------------------
Revenue GBP31.2m GBP27.1m Revenue includes sales Total Revenue increased
from all operations. Like by 15.1%.
for like (LFL) revenue LFL revenues in 2022 were
treats acquired businesses GBP30.4m, resulting in
as if they were owned for a 12.3% increase on a constant
the same period across currency basis and adjusting
both the current and prior for such items as M&A activity
year and adjusts for constant in periods.
currency, omitting any
distinct differences that
skew the numbers. Business
disposed of in the period
are excluded from the calculation.
--------- --------- ------------------------------------ ---------------------------------
Adjusted GBP5.1m GBP4.6m Earnings before share based Adjusted EBITDA increase
EBITDA payments, depreciation, of 11.4% (GBP0.5m) driven
intangible amortisation, by revenue growth and the
impairment costs, acquisition acquisition of customers
costs, one-off employee from Clear Networks, which
related costs, deal related contributed GBP0.2m of
costs and start-up costs EBITDA in FY22.
is the measure of the Group's EBITDA Margin of 16.3%
operating performance. (FY21: 16.9%) following
It evaluates performance increased marketing spend
without factoring in financing of GBP0.2m and GBP0.2m
decisions, accounting decisions increased Australian Headcount
or tax environments or costs.
provisions for potential
legal costs, share based
payments, acquisition costs
and fund-raising fees.
--------- --------- ------------------------------------ ---------------------------------
Adjusted GBP5.8m GBP5.2m Adjusted Operating cash Adjusted operating cash
Operating flow relates to the amount inflow was GBP5.8m (FY21:
Cash Flow of cash generated from GBP5.2m), an improvement
- Continuing the Group's operating activities of GBP0.6m YOY, due to
Operations and is calculated as follows: increased EBITDA (GBP0.5m),
Profit/(Loss) before Tax lower forex and non-cash
adjusted for Depreciation, charge (GBP0.9m), and lower
Amortisation, Share Based working capital improvement
Payments and adjusting year on year GBP0.9m.
for changes in Working
Capital and non-cash items.
--------- --------- ------------------------------------ ---------------------------------
Adjusted GBP3.7m GBP2.1m Adjusted Free cash flow Adjusted free cash inflow
Free Cash being cash (used)/generated in the year was GBP3.7m
Flow - Continuing by the Group after investment (FY21: GBP2.1m), an improvement
Operations in capital expenditure, of GBP1.6m YOY. Operating
servicing of debt and payment cash inflow improved GBP0.6m,
of taxes and excludes items lower capital expenditure
identified as exceptional of GBP0.8m at GBP1.4m (FY21:
in nature. GBP2.2m) and lower interest
by GBP0.3m at GBP0.1m (FY21:
GBP0.4m), offset by increased
tax charge of GBP0.1m at
GBP0.6m (FY21: GBP0.5m)
--------- --------- ------------------------------------ ---------------------------------
Basic Earnings per share
(EPS) is the portion of
the Continued and discontinued Represents increased loss
business's loss of GBP2.9m in the year. Prior year
(FY21: Profit GBP27.0m) reflected the gain on disposal
divided by the weighted of majority interest in
Basic EPS (5.0p) 46.9p average number of shares. Quickline to Northleaf
--------- --------- ------------------------------------ ---------------------------------
Adjusted Earnings per share
(EPS) is the Continued
business's profit/(loss)
after tax before exceptional
costs, share based payments,
impairment of Fixed Assets
and deferred tax adjustments,
Adjusted divided by the weighted Increased marginally post
EPS 4.4p 4.3p average number of shares. improved EBITDA
--------- --------- ------------------------------------ ---------------------------------
Total customers at the period end including in-flight customers
for continuing operations were 59.4k (FY21: 58.8k). During the year
we delivered underlying 2.4k net adds (FY21: 6k). This is
summarised as follows:
FY22 FY21
000 000
Opening base 58.8 57.2
--------- ---------
Switched out customers (9.0) (3.0)
Switched in customers 9.0 3.0
Gross Adds 16.7 20.4
Acquisition 2.2 -
Churn (16.5) (14.4)
--------- ---------
Net Growth 2.4 6.0
--------- ---------
Exceptional churn (1.8) (4.4)
Closing Base 59.4 58.8
--------- ---------
Underlying churn rates (defined as the number of subscribers who
discontinue their service as a percentage of the average total
number of subscribers within the period) increased to an average
annualised churn rate of 28.4% in FY22 (FY21: 21.3%), before
exceptional churn of 1.8k, relating to the cyber-attack in Norway
during the year (1.6k) and the final elements of the demounting
project commenced in FY21 (0.2k).
In our Nordics business underlying churn was 22.4% (35.1%
including exceptional demounted customers). (FY21: 15.2%).
In our Australian business underlying churn was 30.3% (FY21:
28.6%) due to the removal of COVID Support packages and continued
technical challenges on the Skymuster plus product, which will be
updated in FY23 to an improved product which would be more
attractive in terms of speed and data packages, which should reduce
churn. Competitors, such as Starlink, have also contributed to the
churn with aggressive marketing, and we continue to work with NBNCo
to counter this.
In the first three months of FY23, underlying churn has slightly
reduced, and importantly we are starting to roll out next
generation products in Australia, New Zealand and Norway.
Revenue
Total revenue including recurring airtime and other income
(equipment sales and installation sales) for the period increased
by GBP4.1m (15.1%) to GBP31.2m (FY21: GBP27.1m). Total revenue on a
like-for-like and constant currency basis increased in the year by
12.3%, (FY21: increase 15.3%) as the Group continued to add
customers during the year but importantly improved ARPU by
9.5%.
ARPU, calculated by dividing total revenues from all sources by
the average customer base, in 2022 was GBP43.03 per month (FY21:
GBP39.30) due to higher revenues, specific to the Skymuster Plus
products in Australia as well as switching customers to more
appropriate packages.
Revenue in satellite was GBP24.7m, up on prior year by 14%
(FY21: GBP21.7m) due in the main to customer growth, plan switching
in Australasia, and the satellite base acquired from Clear. Revenue
in fixed wireless was GBP4.9m, up on prior year by 7% (FY21:
GBP4.6m) Revenue in 5G was GBP0.9m in the year (FY21: GBPnil) due
to growth in Norway. PLC added GBP0.7m (FY21: GBP0.7m) from
services related revenue.
Recurring revenue, defined as revenue generated from the Group's
broadband airtime, which is typically linked to contracts and
monthly subscriptions, was GBP28.9m in the period, representing 93%
of total continuing revenue (FY21: 94%).
Margins and profitability
Gross profit margin was c.43%. (FY21: c.45%) due in the main to
the planned product mix changes. In Norway increased 5G revenue at
lower margins resulted in a 10.6% decrease in margins from 79.7% to
71.2%. In Australia gross profit improved 2.5% from 35.8% to 36.7%
due to product mix.
Distribution and Administrative Expenses, pre-exceptional costs,
increased to GBP11.7m (FY21: GBP9.0m) due to increased headcount
costs, marketing costs, depreciation and amortisation on the
customer acquisition from Clear. Post items identified as
exceptional in nature, these expenses increased to GBP14.8m (FY21:
GBP13.1m) representing 47.3% of revenue (FY21: 48.2%) due to
specific deal related and operational exceptional costs.
Adjusted EBITDA increased 11.4% for the period at GBP5.1m
representing an adjusted EBITDA margin of 16.3% compared to GBP4.6m
in FY21 and an adjusted EBITDA margin of 16.9%.
Continuing Operations analysis
A reconciliation of the adjusted EBITDA to adjusted PAT of
GBP2.6m (FY21: GBP2.5m profit) is shown below:
2022 2021
GBP000 GBP000
Adjusted EBITDA 1 5,101 4,577
Depreciation 2 (2,076) (1,390)
Impairment of Fixed Assets 2 (966) -
Amortisation 3 (702) -
Adjusted EBIT 1,357 3,187
Share based payments (309) (163)
-------- --------
Continuing Operations operating profit - pre-exceptional items 1,048 3,024
Exceptional items relating to M&A and restructuring activities 4 (2,707) (3,922)
Continuing Operations Statutory operating loss - post exceptional items (1,659) (898)
-------- --------
Adjusted EBIT 1,357 3,187
Interest charge 5 (124) (798)
Tax (charge) / credit 6 (1,031) 76
Impairment of Fixed Assets 7 966 -
Amortisation 7 702 -
Deferred taxation adjustment in Norway 7 714 -
Adjusted PAT 2,584 2,465
-------- --------
Group Statutory Results and EBITDA Reconciliation
1. Adjusted EBITDA (before share based payments, depreciation,
intangible amortisation, impairment of goodwill, refinancing,
fundraising, acquisition, employee related costs, deal related
costs and start-up costs) improved 11.4% to GBP5.1m (FY21:
GBP4.6m).
2. Total depreciation increased to GBP3.0m in FY22 from GBP1.4m
in FY21 due to the capitalisation of costs associated with the
upgrading project in Norway last financial year now being
depreciated (GBP0.5m), an impairment depreciation charge of GBP1.0m
due to historic infrastructure assets written down in Norway
following the demounting exercise, and depreciation of assets
acquired with Clear (GBP0.1m).
3. Amortisation increased to GBP0.7m from Nil in FY21 following
the acquisition of the Clear customer base. During the year we
undertook a full review of the carrying value of Goodwill, with the
review resulting in no requirement for an impairment.
4. The Group incurred expenses in the period that are considered
exceptional in nature and therefore appropriate to identify. These
comprise:
a. GBP1.3m (FY21: GBP2.0m) of acquisition, deal, legal and other
costs relating to M&A and restructuring activities during the
period. These costs comprise mainly professional and legal
fees.
b. GBP0.3m (FY21: GBP0.4m) employee restructuring costs primarily in the Nordics.
c. GBP0.5m (FY20: GBP0.6m) associated with the cost of the demounting program in Norway
d. GBP0.1m (FY20: GBPnil) associated with the new RCF facility with Santander
e. GBP0.3m (FY20: GBPnil) development costs for the new Pathfinder system in Australia
f. GBP0.1m setup costs for the New Zealand operations
5. The interest charge in the year of GBP0.1m related to the RCF
facility with Santander (FY21: GBP0.7m).
6. The tax charge of GBP1.0m (FY20: GBP0.2m) relates to our
Australia business on taxable profits (GBP0.3m) and a deferred tax
asset adjustment relating to our Norway business (GBP0.7m). Prior
year also included a deferred tax credit adjustment in our
Norwegian business of GBP0.3m
7. Adjustments
a. Impairment depreciation charge of GBP1.0m due to historic
infrastructure assets written down in Norway following the
demounting exercise.
b. Amortisation of GBP0.7m following the acquisition of the Clear customer base.
c. Deferred tax adjustment of GBP0.7m relating to our Norway business.
Customer Base, Revenue, Adjusted EBITDA in FY22 and the
comparative period for Continuing Group is segmented by the
following categories as follows:
Customer Base Revenue Adjusted EBITDA
----------------------
2022 2021 2022 2021 2022 2021
Number % Number % GBPm GBPm % GBPm GBPm %
000's 000's
Australia 51.5 87% 49.7 84% 26.5 21.8 22% 5.0 4.0 25%
Norway 7.9 13% 9.1 16% 4.0 4.6 (13%) 1.0 1.9 (47%)
Pre-Central 59.4 100% 58.8 100% 30.5 26.4 15% 6.0 5.9 2%
Central Revenue
and Costs (1) - - 0.7 0.7 0% (0.9) (1.3) 31%
------- ------- ------- ------- ------ ------ ------ -------- -------- ------
Total 59.4 100% 58.8 100% 31.2 27.1 15% 5.1 4.6 11%
------- ------- ------- ------- ------ ------ ------ -------- -------- ------
(1) Central revenue includes recharges for post-sale services
and central costs include finance, IT, HR and plc costs.
Customer Base by Technology and Region
2022 2022 2022 2021 2021 2021
Satellite Fixed Wireless/5G Total Satellite Fixed Wireless/5G Total
000's 000's 000's % 000's 000's 000's %
Australia 44.0 7.5 51.5 87% 42.4 7.3 49.7 84%
Norway 2.9 5.0 7.9 13% 1.6 7.5 9.1 16%
Total 46.9 12.5 59.4 100% 44.0 14.8 58.8 100%
---------- ------------------ ------ ---------- ------------------ ------
From the above analysis for Continuing Operations year on year
movements from a Customer Base, Revenue, Adjusted EBITDA and
product mix perspective are analysed as follows:
1 Australasia
a. There was customer net growth of 1.8k over the course of the
year, including the c2.2k from the Clear acquisition.
b. During the year there were a number of customers switching contracts (c.9k)
c. The increase in revenue of GBP4.7m was a result of the
continued growth in customer numbers, the acquisition of customers
from Clear, and an improved APRU from GBP37.83 to GBP43.65.
d. Importantly, EBITDA improved by 25% following continued cost efficiencies across the company.
2 Norway
a. Net underlying customers growth was 0.6k before exceptional
churn of 1.8k relating to customers associated with the demounting
(0.2k) and the cyber-attack (1.6k).
b. Revenue in the year reduced GBP0.6m due to the loss of these
customers, although ARPU increased from GBP35.81 to GBP39.32 due to
price increases in the year
c. Adjusted EBITDA reduced by GBP0.9m, to GBP1.0m during the
year, reflecting the lower revenue and fixed costs associated with
operating leases.
3 PLC
a. Revenue was in line with prior year at GBP0.7m relating to
invoiced support services to a third party.
b. With lower costs this resulted in EBITDA losses improving by 31% at GBP0.9m.
Cashflow performance
Adjusted Free Cash Flow in the year, before exceptional and
M&A activities undertaken by the Group, was an inflow of
GBP3.7m (FY21: inflow GBP2.1m). This reflects the improved
operating cashflow of GBP0.6m, lower capital expenditure of GBP0.8m
at GBP1.4m (FY21: GBP2.2m) and lower interest by GBP0.3m, at
GBP0.1m (FY21: GBP0.4m), offset by increased tax charge of GBP0.1m
at GBP0.6m (FY21: GBP0.5m). The underlying cash flow performance
analysis seeks to clearly identify underlying cash generation
within the Continuing Group, and separately identify the cash
impact of identified exceptional items including refinancing,
fundraising M&A activity cash costs and is presented as
follows:
2022 2021
GBP000 GBP000
Adjusted EBITDA 5,101 4,577
Underlying movement of working capital 1 777 1,742
Forex and other non-cash items 2 (113) (1,085)
--------- ----------
Adjusted operating cash inflow before interest, tax Capex and exceptional items 3 5,765 5,234
Tax and interest paid 4 (663) (906)
Purchase of Assets 5 (1,432) (2,208)
--------- ----------
Adjusted free cash inflow before exceptional and M&A items 3,670 2,120
Exceptional items relating to refinancing, fundraising, M&A, integration and the
establishment
of network partnerships 6 (2,707) (3,922)
Free cash inflow/(outflow) after exceptional items 963 (1,802)
Investing activities 7 (1,154) 31,041
Movement in cash from Discontinued operations 8 (120) (2,209)
Movement in working capital from discontinued operations 9 - (2,339)
Financing activities 10 (695) (34,796)
--------- ----------
Decrease in cash balances (1,006) (10,105)
--------- ----------
1. Underlying movement in working capital was an inflow of
GBP0.8m (FY21: inflow GBP1.7m). This reflects the inflow of
receipts from accrued income (GBP2.8m), lower receipts in Trade
Debtors (GBP0.2m), the outflow of investment in 5G stock (GBP0.4m)
and increased Creditors payments (GBP1.4m).
2. Forex and non-cash represent an improvement on FY21 of a
lower outflow in the year GBP0.1m (FY21: outflow GBP1.1m). This
reflects the currency revaluation of key balance sheet accounts
using the closing rate as at 30 November of a charge GBP0.2m (FY21:
GBP0.9m) and non-cash movements relating in a credit of GBP0.1m
(FY21: Charge GBP0.2m).
3. This resulted in an adjusted operating cash flow before
Interest, Tax, Capital expenditure and Exceptional items of GBP5.8m
inflow (FY21: GBP5.2m inflow), and an adjusted operating cash flow
to EBITDA conversion of 113% (FY21: positive 114%).
4. Tax and interest paid was GBP0.7m (FY21: GBP0.9m) on a
like-for-like basis. This covers interest on the RCF facility and
leases (GBP0.1m) and monthly taxation paid by our Australian
business (GBP0.5m). Final corporation tax calculations for the
financial year show year-on-year tax savings in excess of
GBP0.4m.
5. Purchases of assets in FY22 were GBP1.4m (FY21: GBP2.2m).
These purchases included the fixed wireless investment in Norway of
GBP0.7m, installations and IT costs of GBP0.3m and other
GBP0.4m.
6. Exceptional items relating to M&A, finance raising and
restructuring costs of GBP2.7m (FY21: GBP3.9m).
7. In FY22 investing activities includes the acquisition of
customers and assets of Clear Networks (GBP1.2m). In FY21 sales
proceeds from the disposal of subsidiaries were GBP31.1m cash
(excluding consideration satisfied by equity investments) less the
purchase of intangibles (GBP0.1m).
8. Relates to costs associated with the discontinued operations
(GBP2.2m in FY21 retained by the entities disposed of in the
year).
9. Represents the movement in the Group's working capital due to
the deconsolidation of the disposed businesses in FY21.
10. The outflow in the year of GBP0.7m relates to lease
principal payments. In FY21 the major financing activities included
the return of capital to shareholders of GBP26.1m outflow, the
repayment of the Santander RCF facility GBP8.4m together with
GBP0.8m lease principal payments, offset by the issuance of shares
from the exercise of options generating an inflow of GBP34.8m.
Net Cash reconciliation
2022 2021
GBP000 GBP000
Opening Net Cash 5,201 7,419
--------- ----------
Loss after tax from Continuing operations (2,814) (1,620)
Interest charge 124 798
Depreciation 2,076 1,390
Impairment of Fixed Assets 966 -
Amortisation 702 -
Tax charge / (Credit) 1,031 (76)
Share Based payments 309 163
Exceptional costs 2,707 3,922
Adjusted EBITDA 5,101 4,577
Forex movement and other non-cash (118) (1,085)
Movement in Working Capital 782 1,742
Cash inflow from Continuing operations 5,765 5,234
Interest paid (124) (411)
Tax paid (539) (495)
--------- ----------
Underlying inflow from Continuing operations 5,102 4,328
Purchase of Assets (1,432) (2,208)
--------- ----------
Adjusted free cash inflow before exceptional
and M&A items 3,670 2,120
Exceptional items relating to refinancing,
fundraising, M&A, integration and the establishment
of network partnerships (2,707) (3,922)
--------- ----------
Adjusted free cash inflow/(outflow) after
exceptional and M&A items 963 (1,802)
Investment activities (1,154) 31,041
Movement in working capital from discontinued
operations - (2,339)
Financing activities (695) (34,796)
--------- ----------
Movement in Cash from Continuing operations (886) (7,896)
Outflow in cash from Discontinued operations (120) (2,209)
--------- ----------
Movement in Net Cash (1,006) (10,105)
Decrease in Debt - 7,887
--------- ----------
Closing Net Cash 4,195 5,201
--------- ----------
Cash and net debt for the overall Group is summarised as
follows:
2022 2021
GBP000 GBP000
Opening Net Cash 5,201 7,419
-------- ---------
Decrease in loans: offset in financing
activities
Facilities Repaid - 7,887
Cash outflow from operating activities (512) (1,640)
Cash generated in investing activities 200 22,591
Cash outflow from financing activities (694) (31,056)
-------- ---------
Movement in Net Cash (1,006) (2,218)
-------- ---------
Closing Net Cash 4,195 5,201
-------- ---------
Composition of closing net debt
Net cash and cash equivalents 4,195 5,201
Bank loans - -
Net Cash 4,195 5,201
-------- ---------
Net Cash
Net cash and cash equivalents 4,195 5,201
Discontinued operations cash - -
-------- ---------
Adjusted net cash 4,195 5,201
-------- ---------
Adjusted Net Cash (Debt) / Adjusted EBITDA 0.82x 1.13x
Adjusted Net Cash (Debt) inc IFRS16 /
Adjusted EBITDA 0.54x 0.82x
Net cash reduced from GBP5.2m in 2022 to a net cash position of
GBP4.2m, a reduction of GBP1.0m in the year, as detailed in the net
cash reconciliation above. 2021 includes the repayment of the debt
(GBP7.9m) and the return of Capital (GBP26.1m)
The table above excludes the lease liabilities of GBP1.4m (FY21:
GBP1.4m). Including this amount would give a total adjusted net
cash of GBP2.8m (FY21: Adjusted net cash GBP3.8m) and a ratio of
adjusted net cash to adjusted Group EBITDA before IFRS 16 of 0.54x
(FY21: Adjusted net cash 0.82x).
Consolidated Statement of Financial Position
There was a step change in the balance sheet following the
performance in the year with increased Revenue (GBP31.2m) and
EBITDA (GBP5.1m).
Fixed Assets reduced in the year to GBP2.9m (FY21: GBP4.1m),
following the purchase of new fixed assets (GBP1.4m), less
disposals (GBP0.1m), and adjusted for depreciation provided in the
year (GBP3.0m) and positive foreign exchange movements GBP0.2m.
Intangible Assets increased to GBP7.4m (FY21: GBP5.6m) due to
the IP addresses and contracts relating to the Clear acquisition
GBP2.3m plus software development of GBP0.2m less amortization of
GBP0.7m. Software development costs of GBP0.4m were reclassified
from PP&E. Following a review in FY22 there was no requirement
for an impairment of the carrying value of the Company's
goodwill.
Working Capital
Inventory days increased to 24 days (FY21: 13 days) as we
purposefully increased stock holdings in Norway by GBP0.4m, to
GBP1.1m (FY21: 0.7m) to support the 5G offering given global
shortages during the financial year.
Trade Debtor days slightly increased to 9 days (FY21: 7 days)
with GBP0.2m increase in the closing Trade Debtors year on
year.
Trade Creditor days increased to 77 days (FY21: 81 days) due to
agreed revised extended payment terms with suppliers to support our
5G growth in Norway.
Earnings per share
2022 2021
Basic earnings per share (5.0p) 46.9p
Diluted earnings per share (5.0p) 45.6p
Basic adjusted earnings per share 4.4p 4.3p
The Group delivered a basic loss per share of 5.0p (2021: basic
profit per share of 46.9p as a result of the material exceptional
profit) and fully diluted loss per share of 5.0p (2021: fully
diluted profit per share of 45.6p). Adjusted earnings per share was
a profit per share of 4.4p (2021: profit per share of 4.3p).
Basic EPS
Basic EPS was a loss of 5.0p per share in 2022, down from a
profit of 46.9p in 2021, largely due to the sale of the
discontinued businesses in FY21.
Diluted EPS
Diluted EPS is a calculation used to gauge the quality of a
company's earnings per share (EPS) if all share options are
exercised. Diluted EPS was a loss of 5.0p per share in 2022 from a
profit of 45.6p in 2021.
Basic adjusted earnings per share
Basic EPS was a profit of 4.4p per share in FY22 from a profit
of 4.3p in FY21.
Streamlined Energy and Carbon Reporting
Large UK companies are required to report their levels of
greenhouse gases (GHG) emissions in their annual report and
accounts. This obligation is for Scope 1 (direct) and Scope 2
(indirect) emissions, only to the extent that emissions are the
responsibility of the Company. Direct emissions originate from
combustion of natural gas and fleet vehicles, whilst indirect
emissions are based on purchased electricity.
Emissions are calculated following the UK Government GHG
Conversion Factors for Group Reporting 2020 and UK Government
Environmental Reporting Guidelines. Emissions are based on the
Group's UK sales and operations. An intensity ratio of carbon
dioxide equivalent (CO2e) per GBP1m of revenue has been selected
which will allow a comparison of performance over the time and with
other similar types of businesses. The data below represents the
GHG emissions from the UK disposal of Quickline for the period up
to the 10 June 2021. Continuing UK operations comprising only
central and head office functions emit less than 40MWh and are
regarded as a low energy user. Accordingly, no emission or energy
consumption figures for the Company are included in the following
table. Carbon emissions for non-UK subsidiaries are not
reported.
2022 2021
Tonnes CO2e Tonnes CO2e
Source of Emissions
Direct Emissions - Scope 1 - Gas and Vehicle fleet - 113
Indirect Emissions - Scope 2 - Electricity - 3
Indirect emissions - Scope 3 - Employee cars - -
------------- ---------------------
Gross Emissions - 116
----------- ---------------------
Turnover - UK discontinued operations GBPm - 3.2
Tonnes CO2e per GBP1m of revenue - 35.6
Energy consumption used to calculate emissions - MWh - 846
Accounting standards
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS), as endorsed and
adopted for use in the EU. There have been no changes to IFRS
standards this year that have a material impact on the Group's
results. No forthcoming new IFRS standards are expected to have a
material impact on the financial statements of the Group.
Dividend
The directors do not recommend the payment of a dividend (2021:
GBPNil)
Going Concern
The Directors have prepared and reviewed projected cash flows
for the Group, reflecting its current level of activity and
anticipated future plan for the next 12 months, from the date of
signing. The Group is currently loss-making, mainly as a result of
depreciation, amortisation and exceptional charges. The business
continues to grow customer numbers and revenue in key target
markets and continues to monitor the short-term business model of
the Group.
The Board have identified the key risks, and these include:
-- Slower revenue growth, EBITDA and cash generation if sales
activities, installations or activations decrease over the
period
-- Reduced ARPU if market pressures result in discounting
customer products to support them
-- Increased churn could be experienced if services levels are
not as expected due to volumes of traffic, personnel shortages, and
capacity constraints
-- Increased bad debt as customers suffer income loss
-- Increased CAPEX costs to support growth targets or shipping delays
The Board also recognises a number of significant mitigating
factors that could protect the future going concern of the
business. These include:
-- Super-fast Broadband is already an essential utility for many
and even more so now, it is likely to be one of the last services
that customers will stop paying for
-- Increased self-install / tripods to offset any installation delays
-- Reduced CAPEX / discretionary spend
-- Support from Network Partners for the business and customers
-- Strong support from banking partners with an increased RCF facility of GBP10m
The Board has conducted stress tests against our business
performance metrics to ensure that we can manage any continuing
risks. We recognise that a number of our business activities could
be impacted, and we have reflected these in this analysis including
supply chain disruptions, delays in sales or installations,
earnings, or cash generation. By modelling sensitivities in
specific KPIs such as volume of activations, churn, ARPU, margin,
overhead and FOREX, management is satisfied that it can manage
these risks over the going concern period.
Furthermore, management has in place and continues to develop
robust plans to protect EBITDA and cash during this period of
uncertainty and disruption. Under this plan identified items
include reducing discretionary spend, postponing discretionary
Capex, reducing marketing, freezing all headcount increases,
working with suppliers on terms particularly our network partners
and ultimately seeking relief, as appropriate, from the various
forms of Government support being put into place.
The Board believes that the Group is well placed to manage its
business risks and longer-term strategic objectives, successfully.
The latest management information shows a strong net cash position,
and in terms of volumes, ARPU and churn, we are in fact showing a
strong position compared to prior year and budget and indeed the
business is seeing a significant increase in demand across all main
territories. Accordingly, we continue to adopt the going concern
basis in preparing these results.
On behalf of the Board
Frank Waters
Chief Financial Officer
20 March 2023
Bigblu Broadband plc
Consolidated statement of comprehensive income
12 months ended 30 November 2022
2022 2021
Continuing Operations Notes GBP'000 GBP'000
Revenue from contracts with customers 31,220 27,067
Cost of sales (18,121) (14,899)
------------------------- ------------
Gross profit 13,099 12,168
Distribution expenses 2 (7,480) (8,734)
Administrative expenses 2 (7,278) (4,332)
------------------------- ------------
Operating profit (1,659) (898)
Finance costs 3 (124) (798)
------------------------- ------------
(Loss) before tax (1,783) (1,696)
Taxation (Charge)/Credit on operations (1,031) 76
------------------------- ------------
(Loss) from continuing operations (2,814) (1,620)
Profit from discontinued operations 4 (120) 28,373
------------------------- ------------
(Loss)/Profit for the year (2,934) 26,753
Other comprehensive expense
Foreign currency translation difference 206 (355)
------------------------- ------------
Total comprehensive (loss)/income for
the year (2,728) 26,398
------------------------- ------------
Total comprehensive (loss)/income for
the year is attributable to:
Owners of Bigblu Broadband Plc (2,728) 26,682
Non-controlling interests - (284)
Earnings per share from profit attributable
to the ordinary equity holders of the company
Total - Basic EPS 5 (5.0p) 46.9p
Total - Diluted EPS 5 (5.0p) 45.6p
Continuing operations - Basic EPS (4.8p) (2.8p)
Continuing operations - Diluted EPS (4.8p) (2.7p)
Discontinued operations - Basic EPS (0.2p) 49.7p
Discontinued operations - Diluted EPS (0.2p) 48.3p
------------------------------------------------ ------ -----------------------------
Adjusted earnings per share from continuing
operations attributable to the ordinary
equity holders of the company
Continuing operations - Adjusted Basic
EPS 5 4.4p 4.3p
Continuing operations - Adjusted Diluted
EPS 5 4.4p 4.2p
------------------------------------------------ ------ ------------------------- ------------
Bigblu Broadband plc
Consolidated statement of financial position
As at 30 November 2022
2022 2021
Notes GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 2,881 4,090
Intangible assets 7,433 5,576
Investments 5,830 5,672
Deferred tax asset 303 709
--------- ---------
Total non-current assets 16,447 16,047
--------- ---------
Current assets
Cash and cash equivalents 4,195 5,201
Inventory 1,142 699
Trade and other receivables 2,335 4,917
--------- ---------
Total current assets 7,672 10,817
--------- ---------
Total assets 24,119 26,864
--------- ---------
Current liabilities
Trade and other payables (8,839) (9,420)
Provisions for liabilities and charges (685) (685)
--------- ---------
Total current liabilities (9,524) (10,105)
--------- ---------
Non-current liabilities
Other payables (559) (835)
Loans - -
Deferred tax liability (646) (13)
--------- ---------
Total non-current liabilities (902) (848)
--------- ---------
Total liabilities (10,729) (10,953)
--------- ---------
Net assets 13,390 15,911
--------- ---------
Equity
Share capital 8,763 8,749
Share premium 8,589 8,589
Share option reserve 6 309 -
Capital redemption reserve 6 26,120 26,120
Other equity reserve 6 - -
Foreign exchange translation reserve 6 (2,546) (2,430)
Reverse acquisition reserve 6 (3,317) (3,317)
Listing cost reserve 6 (219) (219)
Merger relief reserve 6 - -
Retained losses 6 (24,309) (21,581)
--------- ---------
Capital and reserves attributable to owners
of Bigblu Broadband Plc 13,390 15,911
Non-controlling interests - -
--------- ---------
Total equity 13,390 15,911
--------- ---------
Bigblu Broadband plc
Consolidated Statement of Cash Flow
12 Months Ended 30 November 2022
2022 2021
GBP'000 GBP'000
Loss after tax from Continuing operations (2,814) (1,620)
Profit after tax from Discontinued operations (120) 28,373
-------- ---------
Profit for the year including discontinued
operations (2,934) 26,753
Adjustments for:
Interest charge 124 852
Gain on disposal of subsidiaries - (28,942)
Amortisation of intangible assets 702 21
Release of grant payables - (285)
Depreciation of property, plant and equipment
- owned assets 2,281 1,834
Depreciation of property, plant and equipment
- ROU assets 761 836
Tax (credit) / charge 1,031 (76)
Share based payments 309 163
Foreign exchange variance and other non-cash
items (102) (332)
(Increase) / Decrease in inventories (440) 39
(Increase) / Decrease in trade and other receivables (212) (2,418)
Increase / (Decrease) in trade and other payables (1,353) 829
(Gain) / loss on disposals of fixed assets (16) (8)
-------- ---------
Cash (used in) / generated from operations 151 (734)
Interest paid (124) (411)
Tax paid (539) (495)
-------- ---------
Net cash outflow from operating activities (512) (1,640)
-------- ---------
Investing activities
Purchase of property, plant and equipment (1,191) (6,009)
Purchase of business (1,211) -
Purchase of intangibles (241) (53)
Cash transferred out of group in disposed of
subsidiaries - (2,533)
Proceeds from sale of property, plant and equipment - 92
Proceeds from sale of subsidiary 2,843 31,094
-------- ---------
Net cash generated/(used) in investing activities 200 22,591
-------- ---------
Financing activities
Proceeds from issue of ordinary share capital 14 435
Return of capital to shareholders - (26,120)
Proceeds from bank revolving credit facility - 2,000
Loans (paid) - (8,400)
Investment by non-controlling interest - 2,000
Principal elements of lease payments (708) (971)
-------- ---------
Net cash (outflow) generated from financing
activities (694) (31,056)
-------- ---------
Net (decrease)/increase in cash and cash equivalents (1,006) (10,105)
Cash and cash equivalents at beginning of year 5,201 15,306
-------- ---------
Cash and cash equivalents at end of year 4,195 5,201
-------- ---------
Note that the presentation of the cashflow for 2021 takes into
consideration the combined Continued and Discontinued movements in
cash.
Bigblu Broadband plc
Consolidated Reserves Movement
12 Months Ended 30 November 2022
Share Capital Share Premium Other Revenue Reserve Total
Reserves
GBP000 GBP000 GBP000 GBP000 GBP000
Note 6
------------------------------------------- -------------- ---------- ---------------- ---------
At 30 November 2020 8,638 34,180 3,775 (32,403) 14,190
Acquisition of shares
in subsidiary by non-controlling
interest 422 422
Profit for the period 27,037 27,037
Issue of shares 111 324 435
Share option reserve 163 163
Foreign Exchange Translation 139 139
Return of Capital (25,915) 16,077 (16,282) (26,120)
Other comprehensive
expense (355) (355)
------ -------------- ---------- ---------------- ---------
At 30 November 2021 8,749 8,589 20,154 (21,581) 15,911
Loss for the period (2,934) (2,934)
Issue of shares 14 14
Share option reserve 309 309
Foreign Exchange Translation (116) 206 (116)
Other comprehensive
expense 206
At 30 November 2022 8,763 8,589 20,347 (24,309) 13,390
------ -------------- ---------- ---------------- ---------
Bigblu Broadband plc
Notes to the financial statements
For the period ended 30 November 2022
1. Presentation of financial information and accounting
policies
Basis of preparation
The condensed consolidated financial statements are for the full
year to 30 November 2022.
The nature of the Group's operations and its principal
activities is the provision of last mile (incorporating Satellite
and Wireless) broadband telecommunications and associated / related
services and products.
The Group prepares its consolidated financial statements in
accordance with International Accounting Standards ("IAS") and
International Financial Reporting Standards ("IFRS") as adopted by
the United Kingdom. The financial statements have been prepared on
the historical cost basis, except for the revaluation of financial
instruments.
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts in the
financial statements. The areas involving a higher degree of
judgement or complexity, or areas where assumptions or estimates
are significant to the financial statements are disclosed further.
The principal accounting policies set out below have been
consistently applied to all the periods presented in these
financial statements, except as stated below.
Going concern
Having reviewed the Group's budgets, projections, and funding
requirements, and taking account of reasonable possible changes in
trading performance over the next twelve months, the Directors
believe they have reasonable grounds for stating that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the Directors continue to adopt
the going concern basis in preparing the Annual Report and
Accounts.
The Board has concluded that no matters have come to its
attention which suggest that the Group will not be able to maintain
its current terms of trade with customers and suppliers or indeed
that it could not adopt relevant measures as outlined in the
Strategic report to reduce costs and free cash flow. The latest
management information including forecasts in terms of volumes,
debt position, ARPU and Churn are in fact showing a positive
position compared to prior year and budget. The forecasts for the
combined Group projections, taking account of reasonably possible
changes in trading performance, indicate that the Group has
sufficient cash available to continue in operational existence
throughout the forecast year and beyond. The Board has considered
various alternative operating strategies should these be necessary
and are satisfied that revised operating strategies could be
adopted if and when necessary. As a consequence, the Board believes
that the Group is well placed to manage its business risks, and
longer-term strategic objectives, successfully.
Estimates and judgements
The preparation of a condensed set of financial statements
requires management to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities at each period
end. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an ongoing
basis.
In preparing these condensed set of consolidated financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimating uncertainty were principally the same as those applied
to the Group's and Individual company's financial statements for
the year ended 30 November 2022.
Basis of consolidation
The condensed consolidated financial statements comprise the
financial statements of Bigblu Broadband plc and its controlled
entities. The financial statements of controlled entities are
included in the consolidated financial statements from the date
control commences until the date control ceases. The financial
statements of subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
All intercompany balances and transactions have been eliminated in
full.
2. Distribution and Administration Expenditure
Distribution and administration costs for the continued
operations are analysed below. This is non-GAAP information, in
which the allocation is unaudited.
2022 2021
GBP000 GBP000
Employee related costs 5,164 5,103
Marketing and communication costs 1,339 1,119
Logistics, Finance, IT, banking,
insurance AIM and Other costs 1,495 1,369
------- -------
Underlying costs 7,998 7,591
% of Revenue 25.7% 28.0%
------- -------
Depreciation 2,076 1,390
Impairment of Fixed Assets 966 -
Amortisation 702 -
------- -------
Underlying Depreciation and Amortisation 3,744 1,390
% of Revenue 12.0% 5.1%
------- -------
Share based payments 309 163
Professional, legal and related
costs associated with corporate
activity 2,707 3,922
Identified Exceptional Costs 3,016 4,085
% of Revenue 9.6% 15.1%
Total 14,758 13,066
% of Revenue 47.3% 48.2%
------- -------
3. Interest Payable and Finance Costs
2022 2021
GBP'000 GBP'000
Revolving Credit Facility interest payable 38 747
Other interest 6 -
Lease interest expense 78 105
Other finance costs 2 -
-------- --------
Total finance costs 124 852
Finance costs include the following amounts charged to the discontinued operations:
Bank loan interest payable - 38
Lease interest expense - 16
-------- --------
Total interest payable - 54
-------- --------
Interest split as follows:
Continued business 124 798
Discontinued business - 54
-------- --------
Total interest payable 124 852
-------- --------
Interest in the Condensed consolidated statement of
comprehensive income is total finance costs less the element
associated with the discontinued business.
The Revolving Credit Facility interest payable is in respect of
the Santander facility.
4. Profit and loss on Discontinued Operations
There were no business disposals in 2022. Prior year 2021
relates to the sale of QCL Holdings Ltd together with its
subsidiaries to Northleaf and is reported in the prior year
financials below as a discontinued operation.
Group financial information for 2021 set out below is thus a
combination of these two discontinued operations.
Financial performance and cash flow information
2022 2021
GBP'000 GBP'000
Revenue - 3,091
Expenses (120) (3,896)
-------- ---------
Loss before tax (120) (805)
Taxation on operations - (53)
-------- ---------
Loss after tax of discontinued operations (120) (858)
Gain on sale of the subsidiary after tax
(see below) - 25,925
Adjustment to fair value of deferred consideration - 3,306
-------- ---------
(Loss) / Profit from discontinued operations (120) 28,373
-------- ---------
Exchange differences on translation of - -
discontinued operations
-------- ---------
Other comprehensive income from discontinued - -
operations
-------- ---------
Net cash inflow/(outflow) from operating
activities - (3,133)
Net cash inflow from investing activities - 25,531
Net cash (outflow) from financing activities - 1,666
-------- ---------
Net increase in cash generated by the
subsidiaries - 24,064
-------- ---------
Details of sale of subsidiary
Consideration received or receivable:
Cash - 31,094
Investments - 5,600
Fair value of contingent consideration - -
-------- ---------
Total disposal consideration - 36,694
Carrying amount of net assets sold - (13,660)
Elimination of non-controlling interest - 5,865
Expenses of sale - (2,974)
Other Provisions - -
Gain on sale before tax - 25,925
Corporation tax expense on gain - -
-------- ---------
Gain on sale after tax - 25,925
-------- ---------
5. Profit / (Loss) per share
Basic earnings per share is calculated by dividing the
profit/(loss) attributable to shareholders by the weighted average
number of ordinary shares in issue during the period.
Reconciliation of the profit/(loss) and weighted average number
of shares used in the calculation are set out below:
30 November 2022
Weighted
Average Per Share
Profit/(Loss) Number Amount
of
GBP'000 Shares Pence
Basic and diluted EPS
Basic EPS - Loss attributable to
shareholders(1) (2,934) 58,376,211 (5.0)
-------------- ------------ ------------
Loss attributable to shareholders (2,934)
Add back exceptional costs 2,707
Add back share based payments 309
Add back loss on discontinued operations 120
--------------
Adjusted Profit attributable to shareholders
from continuing operations 202
Add back impairment of Fixed Assets 966
Add back amortisation 702
Add back deferred taxation adjustment
in Norway 714
--------------
Adjusted EPS - Adjusted Profit attributable
to shareholders from continuing operations(2) 2,584 58,376,211 4.4
-------------- ------------ ------------
Basic Diluted EPS - Loss attributable
to shareholders (2,934) 58,828,959 (5.0)
-------------- ------------ ------------
Adjusted Diluted EPS - Adjusted Profit
attributable to shareholders from
continuing operations as above(2) 2,584 58,828,959 4.4
-------------- ------------ ------------
30 November 2021
Weighted
Average Per Share
Profit/(Loss) Number Amount
of
GBP'000 Shares Pence
Basic and diluted EPS
Profit for the financial year 26,753
Add: adjustment for non-controlling
interest share of losses (284)
--------------
Basic EPS - Profit attributable to
shareholders(1) 27,037 57,697,017 46.9
-------------- ------------- ------------
Profit attributable to shareholders 26,753
Add back exceptional costs 3,922
Add back share based payments 163
Less profit on discontinued operations (28,373)
--------------
Adjusted EPS - Adjusted Profit attributable
to shareholders from continuing operations(2) 2,465 57,697,017 4.3
-------------- ------------- ------------
Basic Diluted EPS - Profit attributable
to shareholders 27,037 59,251,343 45.6
-------------- ------------- ------------
Adjusted Diluted EPS - Adjusted Profit
attributable to shareholders from continuing
operations as above(2) 2,465 59,251,343 4.2
-------------- ------------- ------------
(1) The loss attributable to shareholders of GBP2.9m (2021:
GBP27.0m profit) is the loss for the financial year of GBP2.9m
(2021: GBP26.8m profit) after adjusting for the add back of the
loss attributable to non-controlling interests of GBPNil (2021:
GBP0.3m loss).
(2) Non-GAAP measure, the profit attributable to shareholders
from continuing operations is GBP2.6m (2021: GBP2.5m profit) after
adjusting for the loss related to the sale of the discontinued
operations in FY21 and adding back exceptional costs, share based
payments, impairment of Fixed Assets, amortisation and the deferred
tax adjustment in Norway
6. Other capital reserves
Listing Merger Reverse Other Foreign Capital Share Total
Exchange
Cost Relief Acquisition Equity Translation Redemption Option Capital
Reserve Reserve Reserve Reserve Reserve Reserve Reserve Reserves
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 30 November
2020 (219) 5,972 (3,317) 1,294 (2,569) - 2,614 3,775
Foreign Exchange
Translation 139 139
Credit to equity
for equity settled
Share based
payments 163 163
Return of Capital (5,972) (1,294) 26,120 (2,777) 16,077
-------- -------- ------------ -------- ------------ ----------- -------- ---------
At 30 November
2021 (219) - (3,317) - (2,430) 26,120 - 20,154
Foreign Exchange
Translation (116) (116)
Credit to equity
for equity settled
Share based
payments 309 309
-------- -------- ------------ -------- ------------ ----------- -------- ---------
At 30 November
2022 (219) - (3,317) - (2,546) 26,120 309 20,347
-------- -------- ------------ -------- ------------ ----------- -------- ---------
-- Listing cost reserve
-- The listing cost reserve arose from expenses incurred on AIM listing.
-- Other equity reserve
-- Other Equity related to the element of the BGF Convertible
Loan which has been grossed up but may be shown net.
-- Reverse acquisition reserve
-- The reverse acquisition reserve relates to the reverse
acquisition of Bigblu Operations Limited (Formerly Satellite
Solutions Worldwide Limited) by Bigblu plc (Formerly Satellite
Solutions Worldwide Group plc) on 12 May 2015.
-- Foreign exchange translation reserve
-- The foreign exchange translation reserve is used to record
exchange difference arising from the translation of the financial
statements of foreign operations.
-- Capital Redemption reserve
-- The capital redemption reserve relates to the cash redemption
of the bonus B shares issued in order to return c.GBP26m to
ordinary shareholders.
-- Share option reserve
-- The share option reserve is used for the issue of share
options during the year plus charges relating to previously issued
options.
-- Merger relief reserve
-- The merger relief reserve relates to the share premium
attributable to shares issued in relation to the acquisition of
Bigblu Operations Limited (Formerly Satellite Solutions Worldwide
Limited)
7. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed within the financial statements or related notes.
8. Availability of the Full Year Report
A copy of these results will be made available for inspection at
the Company's registered office during normal business hours on any
weekday. The Company's registered office is at 6th Floor, 60
Gracechurch Street, London, EC3V 0HR. The Company is registered in
England No. 9223439.
A copy of the full year report will be available in May and can
also be downloaded from the Company's website at
https://www.bbb-plc.com.
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END
FR FLFLDVTIDLIV
(END) Dow Jones Newswires
March 20, 2023 03:00 ET (07:00 GMT)
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