Bigblu Broadband plc (AIM: BBB), a leading provider of alternative fast broadband services, provides a trading update for the six-month period ended 31 May 2019.
- Total revenue increased 21.5% to £30.5m (H1 18: £25.1m)
- Like-for-like organic revenue growth* on a constant currency basis of 12% (FY18: 8.2%)
- Gross margin expanded to 43.7% (H1 18: 37.4%) due to improved product mix and network support
- Underlying EBITDA** increased 54% to £4.3m (H1 18: £2.8m)
- Total number of customers increased 7% during the period
- 50 Mbps download speeds now available to all European customers
- The Company continues to be the largest single connector of new customers to the Australian national NBN satellite broadband scheme with a consistent market share of over 50% over the last nine months.
- Quickline, the Company's wholly owned subsidiary focussed on fixed wireless broadband, has almost doubled customer numbers since acquisition two years ago (currently at c7.6k).
Net debt increased to £16.9m as at 31 May 2019 (1H18: £11.9m), which was in-line with management expectations due to increased working capital and capex requirements and certain earn out payments for acquisitions that performed strongly during the period.
We expect the organic growth in customer numbers to continue into the second half of the year with new and existing customers adopting new products with faster broadband speeds and unlimited download limits. This trend is expected to see both churn rates decreasing and gross margins improving through the remainder of the financial year and beyond. Furthermore, we expect the partnership with Eutelsat to accelerate customer connections during the second half with the confirmed launch of the "Konnect" satellite, enabling 100 Mbps services across the Company's core European markets for the first time, on track to launch in December 2019.
The Board therefore has significant confidence of continued organic growth with strong cash generation. As such the Board is confident of meeting market expectations for the full year.
*Like-for-like organic revenue growth compares current and prior period revenue treating acquired businesses as if they had been owned for all of both periods on a constant currency basis.
**Underlying EBITDA is before share-based payments, depreciation, intangible amortisation, acquisition and deal related costs.
Andrew Walwyn, CEO of BBB commented, "I am delighted to report another strong set of results across all of our financial and operating key performance metrics with a strong contribution from acquisitions completed to date, further proving our buy and build strategy. Importantly, the trading period was underpinned by our compelling product portfolio, improving retention rates and increased data demands from both existing and new customers.
"We have just completed our most successful ever quarter for new customer sign ups and I believe we will see further customer growth in the second half of the year as consumers continue to demand faster and more dynamic broadband services wherever they're located. We therefore remain confident of meeting market expectations for the current year and retain our target of 150,000 customers by December 2020."