Bigblu Broadband plc (AIM: BBB.L), a leading provider of alternative fast broadband services, provides a trading update for the 12-month period ended 30 November 2019.
Trading for the year was in line with management expectations with continued improvement in the Company's key performance indicators including customer additions, revenue growth, ARPU's and EBITDA margin.
During the period the Company secured new funding to accelerate Quickline's growth plans. It also launched a new partnership with Eurobroadband Infrastructure ("EBI"), a subsidiary of Eutelsat (Euronext: ETL) in relation to the roll-out of super-fast broadband across additional European countries. This was subsequently extended to include other countries including Spain, the Nordics and Portugal.
Under this agreement BBB now offers customers unlimited packages with broadband speeds of up to 50 Mbps download. We expect these speeds to continue increasing in 2020 with new satellites being launched.
Increased Quality of Customer Base
In line with our post acquisition integration strategy, we rationalised approximately 13,000 customers who were utilising non-competitive networks during the period. While this impacted customer numbers in the short term, there was continued strong underlying organic growth in satellite broadband customers under the EBI partnership throughout the year.
Total customer numbers (including fixed wireless, satellite broadband and 4G/5G solutions) at the year-end were approximately 110,000 (FY18: 113,000). This represents underlying organic growth of circa 10,000 customers over the period, (FY18: 3,000), and this is net of the rationalisation referred to above. Importantly, the overall quality of the customer base improved significantly with the Company also benefiting from growing ARPU and further margin improvement.
In order to support further growth through the EBI partnership via the one-off transition of customers from the historic Viasat joint venture, the Company increased investment in stock during the second half.
As a result, whilst Net Debt over the course of the year was in line with previous guidance, as at the 30 November year-end date, it was temporarily higher than expectations at approximately £14.2 million vs £16.9m at the half year. This figure reflects some short-term timing issues and some exceptional costs associated with the legacy Viasat agreement and as such management are extremely confident that the underlying net debt position will reduce significantly in the short term.
Andrew Walwyn, CEO of BBB, commented:
"We are delighted with the continued strong performance across all of our key metrics with increasing levels of organic revenue highlighting the growing maturity of our business model and our ability to deliver increasing returns.
"Importantly, we are now generating high levels of recurring revenue as we move towards profitability and continue to be a market leader in a rapidly growing sector with strong markers for increases in demand and spend from existing and new customers. Given our proven model, the strong market dynamics and technology advances, we believe that Bigblu represents a favourable customer choice against traditional alternative solutions and remains extremely well placed to take advantage of growth opportunities in the sector in 2020 and beyond, and therefore we are confident with market expectations for revenue and EBITDA. As such, we look forward to the forthcoming year with optimism working with excellent network partners to drive continued customer growth with continuously improving excellent products."