Bigblu Broadband Reports Interim Results with Major Restructuring and Capital Return

Starlink distribution is growing, but margins are thin

Bigblu has invested £2.1m in Starlink inventory, plus £0.4m in systems and £0.2m in operational resources to roll out the enterprise distribution business. In 1H25 it sold 0.4k units in mainland UK/Europe, generating £0.2m revenue (up from 0.2k units and £0.1m in 1H24).

Gross margin mix shows the moving parts. Quickline loan note interest added c.£0.1m at 100% margin, but Starlink carried just 9% gross margin and Brdy New Zealand 28%, delivering a blended 54% margin. Inventory days rose to 151 with £0.4m of Starlink stock on hand, which underlines the execution risk: the kit needs to keep moving to avoid tying up cash at low margin.

My take: sales momentum is improving and costs have been pared back, but the commercial prize here will depend on pushing more throughput, improving pricing, and managing working capital tightly.

Two equity stakes: SKM (Skymesh) and Quickline

SKM stake positions Bigblu for upside in Australia

• Ownership: 33.9% undiluted in SKM, c.25% fully diluted.
• Skymesh FY24 accounts were signed on 10 June 2025, unchanged from BBB’s FY24 disclosure.
• The new owners have strengthened the board, offshored much of the call centre, reduced office costs, and changed year-end to 30 June 2025.

Why it matters: Bigblu is now more akin to an investment company. Any value from SKM, including potential deferred consideration, is central to the equity story.

Quickline progress underpins loan note income and potential equity value

• Bigblu retains a 2.8% stake in Quickline.
• Quickline secured c.£300m of Project Gigabit contracts and a £250m debt facility in August 2024.
• In 1H25, Quickline passed over 100,000 FTTP premises and over 200,000 premises with fixed wireless; initial build milestones were met or exceeded and subsidies were received.

The interim period also benefited from unrealised accrued interest on Quickline loan notes, contributing to gross profit at 100% margin. That is helpful for earnings quality, but cash conversion depends on timing.

Cash, costs and capital returns

After the Skymesh cash receipt and before distributions, pro forma cash was £14.9m. The group repaid the Santander RCF in full and returned £6.1m to shareholders via the 40p tender offer. Period-end cash was £0.4m with no bank debt – a transformation from net debt of £4.9m a year earlier.

Operating discipline is evident. Adjusted EBITDA loss narrowed to £0.2m and adjusted free cash outflow reduced to £0.7m. Distribution and admin costs fell to £1.0m, aided by lower staff and IT costs, though deal-related expenses increased. Headcount and general overheads have been cut again, and management expects underlying costs to keep falling.

Positives: no bank debt, a much smaller cash burn, and central costs that better match the streamlined scope of the business. Negatives: a modest cash balance, thin Starlink margins, and reliance on value realisation from minority stakes.

Brdy New Zealand and Norway odds and ends

Brdy New Zealand was carved out into a special purpose vehicle and continues to serve 100+ satellite broadband customers, delivering £28k of revenue in the half. In Norway, a subsequent “Trigger Event” after the May 2024 MBO resulted in a £0.1m receipt in February 2025; the buyer has underwritten certain deferred and contingent elements should they crystallise.

Key risks and what to watch next

• Deferred consideration on Skymesh – the net amount due after adjustments will be clearer around the first anniversary of completion.
• Starlink working capital – inventory days at 151 and a 9% gross margin mean execution and pricing are crucial.
• Cost discipline – management targets further reductions; sustaining sub-£1m annualised cash burn would be a material de-risking.
• Quickline delivery – continued build progress and funding drawdowns support both the equity stake and loan note income.
• Accounting for SKM – management will consider equity accounting under IAS 28 as part of the year-end process.

Josh’s verdict

This is a reset. Bigblu has swapped operational complexity and bank debt for a slimmer corporate shell with two meaningful equity options and a Starlink distribution channel. The £6.1m tender at 40p and 26% share count reduction are shareholder friendly, and the pivot from £4.9m net debt to £0.4m net cash is a genuine clean-up.

Near term, this remains a show-me story: convert inventory to cash at better margins, land the Skymesh deferred consideration on favourable terms, and keep trimming the cost base. Do that, and the equity could increasingly reflect the value of SKM and Quickline rather than the drag of legacy overheads.

For the full interim pack and disclosures, visit bbb-plc.com.