REG - Bigblu Broadband PLC - Interim Results
30/08/2022 07:16
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RNS Number : 4467X Bigblu Broadband PLC 30 August 2022
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.
Bigblu Broadband plc
('BBB', the 'Group' or the 'Company')
Interim Results
Continued strong growth
Bigblu Broadband plc (AIM: BBB.L), a leading provider of alternative
super-fast and ultra-fast broadband services, is pleased to provide a trading
update for the six-month Period ending 31 May 2022 (the "Period").
There was good progress across the Company's geographies and business units in
the Period with double-digit revenue growth achieved. Growth in Australia
remains strong, there has been encouraging early progress in New Zealand, and
in the Nordics the focus was on the introduction of new products following
completion of the upgrade program in the last financial year. The Company is
therefore well positioned for the second half of the year.
Financial Highlights
· Total revenue increased 13.8% to £14.9m (1H21: £13.1m) with like
for like revenue growth(1) on a constant currency basis of 11.5%.
· Adjusted EBITDA(2) in the Period was £2.0m (1H21: £2.0m).
· Adjusted Operating cash inflow(5) of £1.3m (1H21: inflow £1.3m).
· Adjusted Free cash inflow(5) of £0.4m (1H21: inflow £0.3m).
· Net cash(6) at 31 May 2022 was £4.5m (1H21: £4.1m) after repayment
of debt in full and the return of capital in the last financial year.
Operational Highlights
· The acquisition of customers and certain business assets of Clear
Networks (Pty) Ltd ("Clear") in Australia was completed in January 2022. Clear
is an Australian ISP based in Melbourne offering a range of broadband services
to 2.2k customers with over 3k connections, using both NBNCo's network and its
own fixed wireless network serving primarily the greater Melbourne area. This
acquisition has helped the Company strengthen its presence in Melbourne as
SkyMesh looks to grow its presence across Australia and this, combined with
the launch of new products, will further accelerate Skymesh's growth.
· The distribution agreement Bigblu Norge (rebranded Brdy.no) entered
with Telenor provides next generation ultrafast broadband via Fixed Wireless
Access using 5G technology ("5G FWA"), delivering speeds up to 500 Mbps with
unlimited data packages. Although running six months behind schedule due to
equipment shortages, it has now reached 0.5k 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 satellite based broadband
services.
· Total customers at the period end were 60.4k (1H21: 58.3k). As
previously announced, one of our satellite network partners with customers in
Ukraine was targeted by a cyber-attack. This attack impacted c.3k of the
Company's Norwegian satellite customers. With the support of our network
partner, the cyber-attack is now materially resolved, although we lost
approximately 0.8k customers as a result.
· We are pleased with the progress made in the New Zealand (NZ)
market with our Asia Pacific broadband satellite partner, Kacific Broadband
Satellites Group, and are delighted to report that NZ has fully opened its
borders after the long pandemic closure, which will allow us to drive
activity.
Quickline deferred consideration and rolled equity update
· In June 2021, the Company completed the disposal of its
majority holding in Quickline (acquired in 2017 for £7m) to Northleaf for a
total cash consideration of up to £41.2m of which up to £10.1m was deferred
contingent consideration, plus a minority stake in the ongoing business. The
deferred cash consideration was subject to certain performance conditions
("PC's") being met by March 22, extended to May 22 under certain
circumstances, as follows; PC1, to build 100 gigabit capable 5G FWA masts
passing 60,000 homes; and PC2, to secure over £10m of new subsidies.
· As previously disclosed, Quickline faced challenges in securing
5G FWA equipment reflecting the global supply issues affecting microchips and
associated delays in the commercial launch of stand-alone 5G FWA services.
This impacted the timing of 5G FWA being approved by the DCMS as a gigabit
capable service. The combination of which resulted in zero deferred
consideration being receivable by the Company.
· More positively, supply issues have started to ease and both 5G
FWA and FTTP build programmes are now accelerating, supported by a headcount
of over 100. Quickline is still targeting to pass 500,000 premises as per
the original business plan. Northleaf has provided £40m of additional
capital to support the BDUK contracts and accelerate the deployment of hybrid
5G FWA and FTTP infrastructure with further capital committed. The Company
retains a 5.1% stake in this rapidly growing and well-financed alternative
network operator.
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 and adjusts for
constant currency and business disposed of in the period are excluded from the
calculation.
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 amortization.
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. Adjusted Free
cash flow being cash (used)/generated by the Group after investment in capital
expenditure, servicing of debt and payment of taxes. Both excludes exceptional
items.
6 Cash / Net debt excludes lease-related liabilities of £0.9m of under IFRS
16 (FY21 £4.2m).
Andrew Walwyn, Chief Executive Officer of Bigblu Broadband plc, commented:
"We are pleased 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 c4k migrations
in the period and net adds of 3.2k, of which 2.2k were associated with Clear
acquisition. The investment we have made to improve our offering in the Nordic
region provides us with optimism that this region can return to growth. In
addition, our Australian business continues to perform strongly. We are seeing
churn levels reduce, and ARPU's improve, resulting in strong revenue growth.
Overall, with extensive experience in the sector and a proven track record of
building attractive businesses across UK, Europe and Australasia, we remain
confident in our ability to continue to deliver attractive returns for
shareholders from our operations, together with the remaining stake in
Quickline. In the second half of the year, we will continue supporting
customers unserved and underserved in the digital divide, whilst at the same
time improving our product range thereby reducing churn. We are already seeing
increasing gross adds and reduced churn from the start of the second half
year. We will continue to consider all options in respect of maximising
shareholder value. Following typical seasonal trends, we expect a strong
second half and are comfortable with market expectations for the current
financial year."
For further information:
Bigblu Broadband Group PLC www.bbb-plc.com (http://www.bbb-plc.com)
Andrew Walwyn, Chief Executive Officer Tel: +44 (0)20 7220 0500
Frank Waters, Chief Financial Officer
finnCap (Nomad and Broker) Tel: +44 (0)20 7220 0500
Marc Milmo / Simon Hicks / Charlie Beeson (Corporate Finance)
Tim Redfern / Richard Chambers (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 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 150 Mbps for consumers, and up to
1 Gbps for businesses. BBB provides customers 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
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
Overview
The first half of this financial year has been a further period where we have
had to, like all businesses, contend with the challenges created by the events
of COVID-19. In the context of the near-term global challenges created by
COVID-19, our long-term relationships with our satellite partners were vital
as we worked together to ensure we could deliver against the growing demand
for rural and remote broadband services.
In January 2022, we completed the acquisition of customers and certain
business assets of Clear. Clear is an Australian ISP offering a suite of NBNCo
broadband products, as well as a private fixed wireless network serving
primarily the greater Melbourne area. This acquisition added 2.2k customers
(3k connections), helped the company strengthen its presence in Melbourne and
continued SkyMesh's strategy of growing its presence across Australia.
Key Financials for the continuing operations
Net customer growth in the first half of 2022 was 2.6% to 60.4k (1H21: 3.9%)
despite having had to contend with a Cyber-attack in the Nordics which
impacted churn during the period as well as product shortages which delayed
the 4G / 5G FWA launch. There was a big 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 4k customers to more
suitable products which the Board believe should help to reduce churn in the
future.
Total revenue including recurring airtime, equipment, installation sales,
network support and the Clear acquisition was £14.9m, up 13.8% (1H21:
£13.1m). This increase in revenue reflected a higher number of customers,
ARPU progression and favorable FX rates in the period. Recurring airtime
revenue, defined as revenue generated from the Company's broadband airtime,
which is typically linked to contracts, was £14.2m representing 95% of total
revenue (1H21: 93%). Total like-for-like (LFL) revenue for the Continuing
Group in the period was £14.6m representing 11.5% growth.
Gross profit margins reduced to 41.8% in 1H22 (1H21: 43.8%), due to planned
product mix changes with the increase in 5G FWA customers being at slightly
lower margins than existing recurring margins for fixed wireless.
Overheads, before items identified as exceptional in nature, increased to
£4.2m (1H21: £3.7m) representing 28.3% of revenue (1H21: 28.6%) due in the
main to increased marketing costs and headcount costs in the period associated
with new product and market launches.
Consequently, adjusted EBITDA for the period was £2.0m representing an
adjusted EBITDA margin of 13.6% compared to £2.0m in 1H21 and an adjusted
EBITDA margin of 15.2%.
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 commanded a 50 per cent market share
of net new adds under the NBN scheme in the period to 30 June 2022.
SkyMesh performed strongly during H1, with customer numbers at 52.0k - up 6.6%
on prior year (1H21: 48.7k), which includes the customers acquired from Clear
(2.2k). This resulted in increased revenues of £12.6m (LFL: £12.1m), up
20.7% (LFL: 15.6%) on prior year, with constant gross margins c.35%. Adjusted
EBITDA was £2.2m, up 20.6% on prior year (1H21: £1.8m), supporting both a
positive adjusted operating cash inflow of £2.7m and generating a positive
adjusted underlying free cash flow before group transfers of £2.2m.
The acquisition of customers and certain business assets of Clear continues
SkyMesh's strategy of expanding its presence across Australia.
The Board believes that it can continue to complement organic growth
opportunities by acquisitions and partnerships that could accelerate the
Company's presence into the wider Australasia region.
Nordics
Our Norwegian business, BB Norge (rebranded Brdy.no), ended 1H22 with customer
numbers at 8.4k down on the previous year (1H21: 9.6k). Consequently, revenues
for BB Norge were £1.9m, down 19.9% on prior year (1H21: £2.4m), reflecting
the decrease in customer numbers associated with the demounting program as
well as the impact of the cyber-attack. Following the completion of the
upgrade program, churn has substantially reduced. The 4G/5G FWA revenue stream
has gone from strength to strength in 1H22 and is now contributing a high
percentage of new customers and revenue.
Gross margin slightly increased to 62.3% (1H21: 60.5%) with strong margin in
our Satellite base of 47.5% (1H21: 34.2%), our 4G/5G FWA contributing 59.2%
(1H21: 0%) and our fixed wireless base 67.2% (1H21: 69.9%). Adjusted EBITDA
for the region was £0.5m, down 39.3% on prior year (1H21: £0.8m). Adjusted
operating cash was an outflow of £0.6m and adjusted underlying free cash flow
was an outflow of £1.1m following capital expenditure of £0.4m and set up
costs associated with the 5G FWA of £0.5m.
During the Period the Group invested NOK 11m (£0.9m) to refine and enhance
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. Although running six months behind due
to equipment shortages, this is beginning to show real momentum and growing
traction in the market with 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 significant scope to expand its presence and reach in this region
and create shareholder value.
Despite the cyber-attack the Nordic region is showing underlying encouraging
results with lower churn and signs of customer growth.
Strategy
The demand for our products continues to increase with an element of home
working in the countries we operate in 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 solution set the Group offers its customers is becoming more
important and a very necessary utility cost. The opportunity in the super-fast
broadband market remains extremely 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 north of 50Mbps and our satellite and fixed wireless solutions will
ensure that all unserved and underserved customers can receive an appropriate
solution.
The Directors consider that, given their respective strengths, each of the
remaining business units in Australasia and the Nordics has potential
opportunities to enhance shareholder value and therefore the Board will be
focused on ensuring that it can fully capitalise on this opportunity.
For the SkyMesh business in Australia, the Board believes that it could also
complement organic growth opportunities by additional acquisitions that could
accelerate the Company's presence into the wider Australasia region. As noted
previously, the Board believes the business has the potential to achieve
80,000 customers in the region over the next three years through organic and
acquisitive growth.
In Norway, following the upgrading programme last year, the launch of new
products and the new Satellite offerings, we are witnessing increased customer
traction and churn showing early signs of stabilising.
The Directors consider that the Company's ability to offer improved fixed
wireless, 5G FWA via Telenor and satellite solutions in the Nordics means that
there is potentially significant scope to expand its presence and reach in
this region. The suite of competitive offerings and growing demand for working
from home solutions means that the target market continues to increase in
size. Market growth, alongside the operational investment outlined above,
provides the Directors with confidence of stronger demand for its FWA
solutions in Norway, whilst capital-light satellite solutions are expected to
be successfully deployed across the wider Nordic region.
Marketing
We use a digital-first strategy to both acquire and retain new and existing
customers. 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 video. Most important of all is word of
mouth or customer referral hence the importance of looking after our existing
customers as demonstrated in our business.
Current Trading and Outlook
The Company has continued its successful positioning at the forefront of the
alternative super-fast broadband industry. During the trading period to 31 May
2022, the Company continued to grow its customer base while still benefiting
from the strong visibility afforded by the high percentage of recurring
revenues. Our robust model and infrastructure continued to underpin growth in
customers and revenues per user. This will prove to be key to the Continuing
Group as we seek to maximise shareholder value from our Nordic and
Australasian businesses.
The Board remains convinced that there is plenty of scope for the Company to
take advantage of growth opportunities. These include, but are not limited to,
capitalising on organic growth and acquisition opportunities in Australasia to
further solidify our hold in the region and reigniting our Nordics operation
with a smaller, more profitable footprint, reduced churn and new product
offerings to our customers. In addition, the Board will look at all
opportunities to maximise shareholder value.
In the current environment, part of our continued growth, and improvement year
on year, is satisfying the increased demand for high-speed broadband in rural
areas as more and more employees work from home. We also closely monitor a
number of business KPIs daily, to ensure that the economic pressures faced by
our customers and suppliers don't materially impact our operations and
financial performance. These KPIs include customer sales, activations, churn,
customers inflight, cash, and stock levels.
Following typical seasonal trends, we expect a strong second half and are
comfortable with financial market expectations for the current year.
Andrew Walwyn
CEO
FINANCIAL REVIEW
This financial review describes the performance of the Company during the
Period.
Total customers at the Period end for the Group were c.60k (1H21: c.58k).
During the half year the Company had gross adds of 8.5k (1H21: 10.9k) and
underlying churn of 7.5k (1H21: 6.5k) giving c.1k net organic adds (1H21:
c.4.4k). In addition, there were 2.2k of customers acquired with the
acquisition of Clear and c 4k migrated customers. The exceptional churn
(c.1.6k) results in the main from demounting equipment on masts (c.0.8k), and
the impact of the cyber-attack (c.0.8k). This is summarised as follows:
Unaudited Unaudited Audited
As at As at As at
31 May 2022 31 May 2021 30 Nov 2021
000 000 000
Opening base 58.8 57.2 57.2
Inflight customers(1) - - 1.3
Gross Additions(2) 8.5 10.9 19.1
Migrated / Switched out(3) (4.0) - (1.0)
Migrated / Switched in(3) 4.0 - 1.0
Churn - Underlying(4) (7.5) (6.5) (14.4)
Underlying Net Additions 1.0 4.4 6.0
Acquisition 2.2 - -
Net Additions 3.2 4.4 6.0
Churn - Exceptional(5) (1.6) (3.3) (4.4)
Net growth 1.6 1.1 1.6
60.4 58.3 58.8
Closing Base
(1)Customers where orders have been received but not activated
(2)Customers who have taken a contract out and commenced service
(3)Customers who have been specifically targeted to switch their contract and
renew with a new product and contract
(4)Underlying churn is where customers have cancelled their contract
(5)Exceptional churn is where we or a customer cancels their contract due to
uncontrollable circumstances impacting their service such as cyber event and
demounting
Significant focus in 1H22 was on launching in NZ, launching 4G/5G FWA services
in Norway and "right sizing" products for customers across all territories. As
a result, we are pleased to report gross add have started increasing in the
second half of the year. 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, including the exceptional churn), decreased to
an average annualised churn rate of 30.7% in 1H22 (1H21: 33.9%). The main
areas of exceptional churn were the cyber-attack affecting 3k customers in
Norway (Impacting churn by c.0.8K) and the demounting of loss making fixed
wireless customers in Norway 0.8k. On a like-for-like basis underlying churn
was in line with the previous year at c 25%.
Inflight numbers remain consistent and are typically only adjusted at the end
of the financial year.
Total revenue increased 13.8% to £14.9m (1H21: £13.1m). This reflects the
higher like for like customer numbers and increased ARPU year on year of 6.8%
(from £38.07 to £40.64). Like for like revenue in the period was up a
healthy 11.5% to £14.6m.
Underlying ARPU, calculated by dividing total revenues from all sources by the
average customer base, increased in the first half to £40.64 per month (1H21:
£38.07) as we sought to offer better packages to customers, more appropriate
to increasing demands for speed and data, with increased revenue from services
and installations.
The sales revenue mix across the Company at the end of the period was c.76%
Satellite, c.22% Fixed Wireless and 2% 4G / 5G FWA (1H21: c.75% Satellite,
c.25% Fixed Wireless and 0% 4G / 5G FWA).
The increased gross margin from the 13.8% increase in revenue was £0.5m (up
8.6% on 1H22). The gross profit was lower due to the product mix associated
with the introduction of 5G FWA products in the Nordics and promotion activity
in Norway satellite following the cyber-attack. Overheads increased £0.5m
(12.4% on 1H22), due to increased marketing costs to support new launches of
5G FWA in Norway and Satellite in New Zealand (£0.35m) and associated
increased staff costs for New Zealand operations (£0.15m).
Depreciation increased to £1.0m in the first half of the year from £0.6m in
1H21 following the investment in Norway on upgrading their estate of towers in
FY21 (£0.3m) as well as an increase in the right of use assets recognised in
line with IFRS 16 (£0.1m). Amortisation of intangible assets increased to
£0.2m (1H21: £nil), due to the customer contracts acquired with Clear being
amortised over 24 months (£0.2m).
The Company incurred charges identified as exceptional in nature during the
period, including costs related to internal restructuring (£0.1m), legal and
related costs associated with acquisition and disposal activities (£0.5m) and
other costs deemed exceptional to ordinary activities (£0.2m).
Interest costs reduced during the period to £0.1m (1H21: £0.3m) as a result
of the repayment of the £8.4m revolving credit facility with Santander in
2H21.
Unaudited Unaudited Audited
As at As at As at
31 May 2022 31 May 2021 30 Nov 2021
£000 £000 £000
Underlying Interest 18 230 709
Interest element of lease payments 34 45 89
Reported Interest 52 275 798
Statutory Results and EBITDA Reconciliation
Adjusted EBITDA (before share based payments and exceptional items) for the
half year increased 1.4% to £2.0m (1H21: £2.0m). A reconciliation of the
adjusted EBITDA to statutory operating loss of £0.2m (1H21: £0.2m profit)
and to adjusted PAT of £0.5m (1H21: £0.9m profit) is shown below:
Unaudited 6 months to 31 May 2022 Unaudited 6 months to 31 May 2021 Audited 12 months to 30 November 2021
£000 £000 £000
Adjusted EBITDA 1 2,020 1,992 4,577
Depreciation 2 (979) (630) (1,390)
Amortisation 3 (188) - -
Adjusted EBIT 853 1,362 3,187
Share based payments (154) (75) (163)
Continuing Operations operating profit - pre-exceptional items 699 1,287 3,024
Exceptional items 4 (830) (1,079) (3,922)
Continuing Operations Statutory operating profit - post exceptional items (131) 208 (898)
Adjusted EBIT 853 1,362 3,187
Underlying interest (52) (275) (798)
Tax (charge)/credit (330) (228) 76
Continuing Adjusted PAT 471 859 2,465
Company
1) Adjusted EBITDA (before share based payments, depreciation,
intangible amortisation, impairment of goodwill, acquisition, employee related
costs, deal related costs, and start-up costs) was £2.0m (1H21: £2.0m).
2) Depreciation increased to £1.0m in 1H22 from £0.6m in 1H21, due to
investment in Norway on upgrading their estate of towers in FY21 (£0.3m) as
well as an increase in the right of use assets recognized in line with IFRS 16
(£0.1m).
3) Amortisation of intangible assets was £0.2m (1H21: £nil) following
the acquisition of Clear. No impairment of intangible assets was charged
during the period (1H21: £nil).
4) The Company incurred expenses in the period that are considered
exceptional in nature and appropriate to identify. These comprise:
a. £0.1m (1H21: £0.1m) employee termination and redundancy costs where
internal restructuring has occurred
b. £0.5m (1H21: £1.0m) of net acquisition, deal, legal and other costs
relating to M&A activities and fundraising during the period. These costs
comprise mainly professional and legal fees.
c. £0.2m of other one-off costs primarily related to launch of 5G in
Norway.
Total Revenue and Adjusted EBITDA in 1H22 and the comparative period is
analysed as follows:
Revenue Adjusted EBITDA(2)
Unaudited Unaudited Audited Unaudited Unaudited Audited
6 months 6 months 12 months 6 months 6 months 12 months
to to to to to to
31 May 31 May 30 Nov 31 May 31 May 30 Nov
2022 2021 2021 2022 2021 2021
£m £m £m £m £m £m
Australia 12.6 10.5 21.8 2.2 1.8 4.0
Norway 1.9 2.4 4.6 0.5 0.8 1.9
Pre-Central 14.5 12.9 26.4 2.7 2.6 5.9
Central Revenue and Costs(1) 0.4 0.2 0.7 (0.7) (0.6) (1.3)
Total 14.9 13.1 27.1 2.0 2.0 4.6
(1) Central costs include finance, IT, marketing and plc costs
(2) Adjusted EBITDA includes the impact of adoption of IFRS16
The Company's total customer base of c.60k as at 31 May 2022 (1H21: c.58k) was
split as follows: Australasia: 86% (1H21: 83%), Norway: 14% (1H21: 17%).
The year-on-year analysis from both a revenue and EBITDA perspective is
explained as follows:
Australia
· The increase in revenue was due to continued growth of the
customer base (£1.3m), the customer acquisition from Clear (£0.5m), as well
as ARPU progression (£0.3m). EBITDA improved following the increase revenue
and the cost control actions subsequently taken.
Nordics
· Revenue in satellite reduced due to the cyber-attack (£0.3m) and
revenue in fixed wireless decreased mainly due to the demounting of identified
loss making masts in last financial year.
· EBITDA decreased due to churn in the period relating to the
demounting program and the impact of the churned customers relating to the
cyber-attack.
Cash Flow Analysis:
Underlying Cashflow performance of continuing group
The underlying cash flow performance analysis seeks to clearly identify
underlying cash generation within the Company and separately identify the cash
impact of M&A activities, identified exceptional items and the treatment
of IFRS 16 and is presented as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
31 May 2022 31 May 2021 30 Nov 2021
£000 £000 £000
Adjusted EBITDA 2,020 1,992 4,577
Underlying movement of working capital 1 (1,314) (691) 1,742
Forex and non-cash 2 595 22 (1,085)
Underlying operating cash flow before interest, tax, Capex and exceptional 3 1,301 1,323 5,234
items
Tax and interest paid 4 (382) (262) (906)
Purchase of Assets 5 (526) (732) (2,208)
Underlying free cash flow before exceptional and M&A items 393 329 2,120
Exceptional items 6 448 (1,022) 27,119
Investing activities 7 (1,192) - -
Movement in cash from discontinued operations 8 - 1,067 (2,209)
Movement in working capital from discontinued operations - - (2,339)
Financing activities 9 (308) (320) (34,796)
(Decrease) / Increase in cash balance (659) 54 (10,105)
1) Underlying movement in working capital was an outflow of £1.3m
(1H21: outflow £0.7m) as a result of the payments associated with the stock
for the 5G FWA revenue stream (£0.8m), a slight increase in Trade Receivables
(£0.2m) and other working capital movements.
2) Forex and non-cash inflow of £0.6m (1H21: inflow £0.0m) relate to
the exchange movement in the Consolidated Statement of Comprehensive Income
and the Consolidated Statement of Financial Position (£0.5m), as well as
costs/income which have no impact on operating cashflow (£0.1m).
3) This resulted in an underlying operating cash flow before Interest,
Tax, Capital expenditure and Exceptional items of £1.3m (1H21: £1.3m inflow)
and an underlying operating cash flow to EBITDA conversion of 64.4% (1H21:
66.4%).
4) Tax and interest paid was £0.4m (1H21: £0.3m). Tax paid relates to
the prepayment in Australia on the monthly revenue (£0.3m), with the interest
element being the fee on the undrawn funds from the RCF.
5) Purchases of assets were £0.5m (1H21 £0.7m). These relate to
improvements in the Nordic fixed wireless infrastructure (£0.2m), Norwegian
5G FWA stock capitalised (£0.2m)and NZ rental stock capitalised £0.1m.
This resulted in an underlying Free Cash inflow before exceptional items,
M&A activities and financing activities in the period of £0.4m (1H21:
inflow £0.3m).
6) Exceptional items of £0.4m (1H21: Outflow £1.0m) covers completion
payments of £2.8m received in respect of earlier M&A activity less £0.1m
of related expenses. Payments associated with New Zealand set up costs
(£0.2m), 5G FWA set up costs in Norway (£0.5m), staff restructuring costs in
Norway (£0.3m), disposals and acquisitions (£1.2m) and others (£0.2m).
Excludes non-cash exceptional items including provisions made in accordance
with IAS 37.
7) Investing activities included the purchase of Clear Networks of
£1.2m
8) There were no operations discontinued during 1H22. The movement in
cash from discontinued operations of £1.1m in 1H21 represents the increase in
cash balances recognised in the accounts of Quickline during 1H21.
9) In 1H22 the financing activities related to the principal element of
lease payments of £0.3m (1H21: £0.3m principal element of lease payments).
Statutory Cash flow Analysis
Underlying operating cashflow was £1.3m in 1H22 (1H21: Inflow of £1.3m),
which resulted in an operating cashflow to adjusted EBITDA (pre IFRS 16
adjustment) conversion of 64.4% (1H21: 66.4%).
Tax and interest paid increased to £0.4m in 1H22 from £0.3m in 1H21,
covering the monthly corporation tax payments on account in Australia.
The net summary of the above is an equity free cash inflow of £0.4m in 1H22
(1H21: £0.3m inflow) which is summarised as follows:
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 May 31 May 30 Nov
2022 2021 2021
£000 £000 £000
Underlying Operating Cash Flows(1) 1,301 1,323 5,234
Purchase of assets (526) (732) (2,208)
Interest and Tax (382) (262) (906)
Equity free cash flow (outflow)/inflow 393 329 2,120
Underlying Operating cash flow analysis - Underlying Operating Cash Flow 64.4% 66.4% 114.4%
/Adjusted EBITDA
(1)Underlying Operating Cash flows is before interest, tax and exceptional
items relating to M&A, integration costs and investment in network
partnerships
Net Cash / (debt) comprises:
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 May 31 May 30 Nov
2022 2021 2021
£000 £000 £000
Cash 4,542 12,084 5,201
Debt - (7,945) -
Net Cash / (Debt) 4,542 4,139 5,201
In the last twelve months (LTM) period, comparing 1H22 with 1H21, cash
decreased by c£7.5m and debt decreased by £7.9m, resulting in an increase in
net cash of £0.4m to £4.5m from net cash of £4.1m, excluding IFRS 16
liabilities.
In the LTM period, we generated operating cash outflows of £2.8m and received
proceeds from the sale of subsidiaries of £33.9m and proceeds from the issue
of shares of £0.4m, and this was utilised as follows; cash returned to
shareholders £26.1m, investment in fixed assets of £2.9m, purchase of
intangibles £1.1m, repayment of debt of £8.4m and capital element of lease
payments £0.7m.
The table above excludes the lease liabilities of £1.4m recognised for the
first time in 2019 after the adoption of IFRS 16 (1H21: £1.9m). Including
this amount would give a total net cash of £3.1m (1H21: net cash £2.2m).
Balance Sheet
Non-current assets have increased in the last 12 months by £7.9m to £17.5m
(1H21: £9.6m) primarily as a result of the receipt of equity and loan notes
as part consideration for the disposal of Quickline, together valued at
£5.7m, and the goodwill on the acquisition of customer contracts from Clear
Networks (£1.6m).
Actual capital expenditure in the Continuing business in 1H22 was £0.5m
(1H21: £0.7m), primarily in the Nordic infrastructure.
Intangible Assets of £7.9m comprises the Goodwill and other intangibles
(FY21: £5.6m). Of the increase of £2.3m, £1.8m relates to the customer
acquisition by SkyMesh of the Clear Networks business and £0.5m is
capitalised system development.
Working Capital
Inventory days increased to 31 days (1H21: 18 days) due to increased stock to
support the 5G FWA sales growth in Norway.
Debtor days decreased to 10 days (1H21: 12 days) following improved debt
collections due to system improvements.
Creditor days decreased to 87 days (1H21: 113 days) due to our stronger
balance sheet being used to improve our credit position with our suppliers.
Total net cash, excluding lease liabilities, increased in the year by £0.4m
to £4.5m (FY21: £4.1m) and is explained further in the Cash Flow Analysis
section.
Statutory EPS and Adjusted EPS for total company including discontinued
operations
Statutory EPS loss per share decreased to 1.1p from 1.3p.
Statutory EPS Pence
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 May 31 May 30 Nov
2022 2021 2020
Total basic EPS attributable to ordinary shareholders (1.1) (1.3) 46.9
Basic EPS from continuing operations (0.9) (0.5) (2.8)
Statutory basic EPS from continuing and discontinued operations shows a loss
of 1.1p (1H21: Loss 1.3p). Statutory basic EPS from continuing operations
increased to a loss of 0.9p (1H21: Loss 0.5p).
Frank Waters
CFO
Bigblu Broadband plc
Consolidated statement of comprehensive income
6 months ended 31 May 2022
Note
Unaudited Unaudited Audited
6 months 6 months to 12 months
to 31 May to
31 May 2021 30 Nov
2022 2021
£000 £000 £000
Revenue 14,894 13,092 27,067
Cost of goods sold (8,662) (7,353) (14,899)
Gross Profit 6,232 5,739 12,168
Distribution and administration expenses 2 (5,196) (4,901) (11,676)
Depreciation (979) (630) (1,390)
Amortisation (188) - -
Operating (Loss) / Profit (131) 208 (898)
Interest Payable (52) (275) (798)
Loss before Tax (183) (67) (1,696)
Taxation (330) (228) 76
Loss from continuing operations (513) (295) (1,620)
(Loss) / Profit from discontinued operations (101) (664) 28,373
(Loss) / Profit for the period (614) (959) 26,753
Foreign currency translation difference 226 (9) (355)
Total comprehensive (expense) / Income for the period (388) (968) 26,398
Owners of Bigblu Broadband Plc (388) (741) 26,682
Non-Controlling Interests - (227) (284)
(Loss) / Profit per share
Total - Basic EPS 3 (1.1p) (1.3p) 46.9p
Total - Diluted EPS 3 (1.1p) (1.3p) 45.6p
Continuing operations - Basic EPS 3 (0.9p) (0.5p) (2.8p)
Continuing operations - Diluted EPS 3 (0.9p) (0.5p) (2.7p)
Discontinued operations - Basic EPS 3 (0.2p) (0.8p) 49.7p
Discontinued operations - Diluted EPS 3 (0.2p) (0.8p) 48.3p
Adjusted earnings per share from continuing operations
Total - Basic EPS 3 0.8p 1.5p 4.3p
Total - Diluted EPS 3 0.8p 1.5p 4.2p
Bigblu Broadband plc
Consolidated statement of financial position
As at 31 May 2022
Note Unaudited Unaudited Audited
As at As at As at
31 May 2022 31 May 2021 30 Nov 2021
£000 £000 £000
Non-Current Assets
Intangible assets 7,880 5,591 5,576
Property Plant and Equipment 3,879 3,527 4,090
Investments 5,750 - 5,672
Deferred Tax asset 717 503 709
Total Non-Current Assets 18,226 9,621 16,047
Current Assets
Inventory 1,577 680 699
Trade Debtors 851 806 802
Other Debtors 1,354 1,740 4,115
Cash and Cash Equivalents 4,542 12,084 5,201
Assets classified as held for sale - 20,109 -
Total Current Assets 8,324 35,419 10,817
Current Liabilities
Trade Payables (4,364) (3,252) (4,496)
Recurring Creditors and Accruals (2,958) (2,847) (3,253)
Other Creditors (991) (725) (82)
Payroll taxes and VAT (359) (670) (966)
Lease liabilities (487) (823) (623)
Provisions for liabilities and charges (685) (1,468) (685)
Liabilities associated with assets classified as held for sale - (6,258) -
Total Current Liabilities (9,844) (16,043) (10,105)
Non-Current Liabilities
Loans and debt facilities - (7,945) -
Lease liabilities (865) (1,053) (835)
Deferred taxation (288) (119) (13)
Total Non-Current Liabilities (1,153) (9,117) (848)
Total Liabilities (10,997) (25,160) (10,953)
Net Assets 15,553 19,880 15,911
Equity
Share Capital 8,755 8,638 8,749
Share Premium 4 8,589 34,180 8,589
Other Reserves 4 20,178 3,862 20,154
Revenue Reserves (21,969) (32,719) (21,581)
Capital & Reserves attributable to owners 15,553 13,961 15,911
Non-controlling interests - 5,919 -
Total Equity 15,553 19,880 15,911
Bigblu Broadband plc
Consolidated Cash Flow Statement
6 months ended 31 May 2022
Unaudited Unaudited Audited
6 months 6 months 12 months ended
ended ended
31 May 2022 31 May 2021 30 Nov 2021
£000 £000 £000
Loss after tax from Continuing operations (513) (295) (1,620)
(Loss)/Profit after tax from Discontinued operations (101) (664) 28,373
(Loss)/Profit for the year including Discontinued operations (614) (959) 26,753
Interest 52 326 852
Gain on disposal of subsidiaries - - (28,942)
Gain on disposal of fixed assets - - (8)
Taxation 330 228 (76)
Release of grant creditors - (1,626) (285)
Amortisation of intangible assets 188 20 21
Depreciation of property, plant and equipment - owned assets 1,834
699 1,314
Depreciation of property, plant and equipment - ROU assets 836
280 524
Share based payments 154 75 163
Foreign exchange variance and other non-cash items 595 (146) (332)
Movement in working capital (2,879) 781 (1,550)
Operating cash flows after movements in working capital (1,195) 537 (734)
Interest paid (52) (160) (411)
Tax paid (330) (102) (495)
Net cash generated/(used) in operating activities (1,577) 275 (1,640)
Investing activities
Purchase of property, plant and equipment (526) (3,655) (6,009)
Purchase of intangibles and investments (1,091) - (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 1,226 (3,655) 22,591
Financing activities
Proceeds from issue of ordinary share capital 6 - 435
Return of capital to shareholders - - (26,120)
Proceeds from bank revolving credit facility - 2,000 2,000
Investment by non-controlling interest - 2,000 2,000
Loans paid - - (8,400)
Principal elements of lease payments (314) (566) (971)
Cash generated/(used) from financing activities (308) 3,434 (31,056)
Net increase / (decrease) in cash and cash equivalents (659) 54 (10,105)
Cash and cash equivalents at beginning of period 5,201 15,306 15,306
Cash in disposal group held for sale - (3,276) -
Cash and cash equivalents at end of period 4,542 12,084 5,201
Bigblu Broadband plc
Condensed consolidated Reserves Movement
6 months ended 31 May 2022
Share Capital Share Premium Other Reserves Revenue Reserve Non-controlling interests Total
£000 £000 £000 £000 £000 £000
Note 4
At 31 May 2021 8,638 34,180 3,862 (32,719) 5,919 19,880
Profit for the period - - - 27,769 (57) 27,712
Adjustment to NCI - - - (3) 3 -
Disposal of subsidiary - - - (5,865) (5,865)
Issue of shares 111 324 - - - 435
Share option reserve - - 88 - - 88
Foreign Exchange Translation
- - 127 (346) - (219)
Return of capital - (25,915) 16,077 (16,282) - (26,120)
8,749 8,589 20,154 (21,581) 15,911
At 30 November 2021
-
Loss for the period - - - (614) - (614)
Issue of shares 6 - - - - 6
Share option reserve - - 154 - - 154
Foreign Exchange Translation - - (130) 226 - 96
8,755 8,589 20,178 (21,969) 15,553
At 31 May 2022 -
Bigblu Broadband plc
Notes to the financial statements
For the period ended 31 May 2022
1. Presentation of financial information and accounting policies
Basis of preparation
The condensed consolidated financial statements are for the half year ending
31 May 2022.
The nature of the Company'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 Company prepares its consolidated financial statements in accordance with
International Accounting Standards ("IAS") and International Financial
Reporting Standards ("IFRS") as adopted by the EU. The financial statements
have been prepared on the historical cost basis, except for the revaluation of
financial instruments.
Under IFRS 5, assets held for sale (including disposal groups) are classified
as discontinued operations and should be presented separately in the income
statement. Even though the sale of Quickline was a post-balance sheet event
the Company opted to show this as discontinued operations as at 31 May 2021 as
laid out by IFRS 5.
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
The Company's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executive Report. The financial position of the Company, its cash flows and
liquidity position are described in the Finance Review.
As at 31 May 2022 the Company generated an adjusted EBITDA before a number of
non-cash and start-up costs expenses in the Consolidated statement of
financial position, of £2.0m (1H21: £2.0m), and with cash inflow from
operations of £3.1m (1H21: inflow of £0.3m) and a net increase in cash and
cash equivalents of £0.4m in the year (1H21: increase £0.1m). The Company
balance sheet showed net cash at 31 May 2022 of £4.5m (1H21: net cash
£4.1m). Having reviewed the Company's budgets, projections and funding
requirements, and taking account of reasonable possible changes in trading
performance over the next twelve months, particularly in light of the
continued COVID-19 risks and counter measures, the Directors believe they have
reasonable grounds for stating that the Company has adequate resources to
continue in operational existence for the foreseeable future.
The Board has concluded that no matters have come to its attention which
suggest that the Company 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 in terms of volumes, debt position and
ARPU, are in fact showing a positive position compared to prior year and
budget. The forecasts for the combined Company projections, taking account of
reasonably possible changes in trading performance, indicate that the Company
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.
Furthermore, the continuing arrangements with key banking partners gives the
Board further comfort on the going concern concept.
Consequently, the Board believes that the Company is well placed to manage its
business risks, and longer-term strategic objectives, successfully.
Estimates and judgments
The preparation of a condensed set of financial statements requires management
to make judgments, 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 this set of consolidated financial statements, the significant
judgments made by management in applying the Company's accounting policies and
the key sources of estimating uncertainty were principally the same as those
applied to the Company's financial statements for the year ended 30 November
2020.
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
inter-company balances and transactions have been eliminated in full.
2. Distribution and Administration Expenditure
Distribution and administration costs are analysed as follows:
Unaudited Unaudited Audited
As at As at As at
31 May 2022 31 May 2021 30 Nov 2021
£000 £000 £000
Employee related costs 2,608 2,281 5,103
Marketing and communication costs 711 552 1,119
Finance, Legal, IT, banking, insurance, logistics, domains AIM and other costs 893 914 1,369
Underlying costs 4,212 3,747 7,591
% of Revenue 28.3% 28.6% 28.0%
Share based payments 154 75 163
Professional and legal related costs associated with corporate activity and 830 1,079 3,922
restructuring
Identified Exceptional Costs 984 1,154 4,085
% of Revenue 6.6% 8.8% 15.1%
Total 5,196 4,901 11,676
% of Revenue 34.9% 37.4% 43.1%
3. Earnings per share
Basic (loss)/profit per share is calculated by dividing the loss or profit
attributable to shareholders by the weighted average number of ordinary shares
in issue during the period.
IAS 33 requires presentation of diluted EPS when a company could be called
upon to issue shares that would decrease earnings per share or increase the
loss per share. For a loss-making company with outstanding share options, net
loss per share would be decreased by the exercise of options. Therefore, as
per IAS33:36, the antidilutive potential ordinary shares are disregarded in
the calculation of diluted EPS.
Reconciliation of the (loss)/profit and weighted average number of shares used
in the calculation are set out below:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31-May to 31-May to 30-Nov
2022 2021 2021
£000 £000 £000
Loss for the period from continuing operations (513) (295) (1,620)
(Loss)/profit for the period from continuing and discontinued operations (614) (959) 26,753
Adjustment for non-controlling interest share of losses - 227 284
(Loss) / Profit attributable to shareholders (614) (732) 27,037
Adjusted profit attributable to shareholders from continuing operations(4) 471 859 2,465
EPS Pence
Basic EPS from continuing operations(1) (0.9p) (0.5p) (2.8p)
Basic EPS from discontinued operations(2) (0.2p) (0.8p) 49.7p
Total basic EPS attributable to ordinary shareholders(3)
(1.1p) (1.3p) 46.9p
Adjusted basic EPS(4) 0.8p 1.5p 4.3p
Diluted EPS from continuing operations(1) (0.9p) (0.5p) (2.7p)
Diluted EPS from discontinued operations(2) (0.2p) (0.8p) 48.3p
Total diluted EPS attributable to ordinary shareholders(3)
(1.1p) (1.3p) 45.6p
Adjusted diluted EPS(4) 0.8p 1.5p 4.2p
Weighted average shares 58,352,525 57,589,857 57,697,017
Weighted average diluted shares 59,880,537 58,027,855 59,251,343
(1)Basic and diluted EPS from continuing operations is the loss for the period
divided by the weighted average shares and weighted average diluted shares
respectively. None of these losses are attributable to non-controlling
interests
(2)Basic and diluted EPS from discontinued operations is the (loss)/profit for
the period less the amounts attributable to non-controlling interests divided
by the weighted average shares and weighted average diluted shares
respectively. The loss incurred in 1H22 of £101k was in relation to the costs
incurred with the Eutelsat claim, which is classified as exceptional in nature
and specific to the discontinued business.
(3)Total basic and diluted EPS attributable to ordinary shareholders is the
sum of (losses)/profits from continuing and discontinued operations less the
amounts attributable to non-controlling interests, divided by the weighted
average shares and weighted average diluted shares respectively.
(4)Adjusted basic and diluted EPS is the loss for the period from continuing
operations before exceptional expenses, exceptional interest and share based
payments, divided by the weighted average shares and weighted average diluted
shares respectively. None of these losses are attributable to non-controlling
interests. This is a non-GAAP measure.
4. Other capital reserves
Foreign
Listing Merger Reverse Other exchange Share Capital Total
Cost Relief acquisition equity translation option redemption capital
Reserve reserve Reserve reserve reserve reserve reserve reserves
£000 £000 £000 £000 £000 £000 £000 £000
At 31 May 2021 (219) 5,972 (3,317) 1,294 (2,557) 2,689 - 3,862
Foreign Exchange Translation - - - - 127 - - 127
Return of capital - (5,972) - (1,294) - (2,777) 26,120 16,077
Equity settled Share based payments
- - - - - 88 - 88
At 30 November 2021 (219) - (3,317) - (2,430) - 26,120 20,154
Foreign Exchange Translation - - - - (130) - - (130)
Share based payments
- - - - - 154 - 154
At 31 May 2022 (219) - (3,317) - (2,560) 154 26,120 20,178
· 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 was settled in December 2019 due to the debt restructure
· 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.
· 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(1)
· The merger relief reserve relates to the share premium attributable
to shares issued in relation to the acquisitions. The prior year adjustment
relates to the treatment of share capital issued in connection with previous
acquisitions made during the year ended 30 November 2018. From a review of
the Company's distributable reserves, it was identified that the Merger Relief
did not apply to the allotment of shares where consideration was settled in
cash. As a result, the premium arising on these allotments of £10.3m (stated
net of the relevant apportionment of attributable issue costs) should have
been credited to the Share Premium account at the time.
· Capital Redemption reserve
· The capital redemption reserve relates to the cash redemption of the
bonus B shares issued in order to return c.£26m to ordinary shareholders.
5. 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.
6. Availability of the Half 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 60 Gracechurch Street, London, EC3V 0HR. The Company
is registered in England No. 9223439.
A copy can also be downloaded from the Company's website at
https://www.bbb-plc.com (https://www.bbb-plc.com)
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