A Year of Transformation: Bigblu Streamlines, Pays Down, and Payouts
Well, well, well. If you thought Bigblu Broadband (AIM: BBB.L) was just ticking along, its latest annual report is a proper firecracker. This wasn’t just another year; it was a strategic overhaul executed with surgical precision. We’re talking major disposals, a clean debt slate, and cold, hard cash landing back in shareholders’ pockets. Let’s unpack exactly what went down.
The Big Exit: Skymesh Finds a New Home Down Under
The headline act was undoubtedly the sale of Skymesh, BBB’s Australian crown jewel. After years as the leading satellite NBN provider (winning “Best Satellite NBN Provider” six years running), Skymesh was sold on 23 December 2024 to SKM Telecommunications Pty Ltd.
The deal structure is worth noting:
- Upfront Cash & Shares: AUD$30 million (£14.9m) cash landed immediately, plus AUD$13.3 million (£6.6m) in newly issued SKM shares.
- Earnout Potential: Up to an additional AUD$6.9 million (£3.5m) is payable based on hitting certain criteria.
- Retained Stake: Critically, BBB didn’t just cash out completely. It retains a significant 33.9% stake in SKM (29.1% fully diluted), keeping skin in the game for future upside. CEO Frank Waters even joined the SKM board.
This wasn’t just a sale; it was a realisation of value at a strong valuation (£25m+ total potential), providing immediate liquidity while maintaining strategic exposure. Skymesh delivered £22.2m revenue and £3.1m adjusted EBITDA in its final year under BBB, but the board saw the chance to crystallise gains and simplify the group.
Wrapping Up in Norway: A Clean Break
Earlier in the year (May 2024), BBB completed its exit from Norway via a Management Buy-Out (MBO) led by local management and outgoing CEO Andrew Walwyn. While the initial sale was for a nominal £1, the structure included potential deferred and contingent payments:
- Payments based on the Norwegian business hitting specific EBITDA targets in FY25 and FY26.
- A deferred consideration linked to deposits and potential future trigger events.
The key outcome? BBB shed the operational risk and potential future cash requirements of the Norwegian turnaround. A subsequent sale by the MBO team in February 2025 triggered a net payment of c.£0.1m to BBB. Importantly, this exit also slashed annualised central costs by around £0.4m.
Clearing the Decks: Santander Debt Repaid in Full
Here’s where the Skymesh sale proceeds really started working for shareholders. Before even thinking about returns, BBB prioritised financial health:
- The £6.9m outstanding on its Revolving Credit Facility (RCF) with Santander UK, including all charges and accrued interest, was repaid in full post-completion of the Skymesh deal.
- This move eliminated the group’s net debt position (£6.5m at 30 Nov 2024) and associated interest burden (£0.7m cost in FY24).
The message is clear: financial stability first. Kudos to Santander for their support, but BBB is now operating debt-free.
Cash in Hand: The £6.1m Tender Offer
With debt cleared and Skymesh cash in the bank, BBB turned its attention directly to shareholders. The board authorised a substantial return of capital:
- A tender offer for 15.25 million ordinary shares (approx. 26% of the pre-offer issued share capital).
- Executed at 40 pence per share.
- Returning a chunky £6.1 million directly to participating shareholders.
This wasn’t just a token gesture; it was a significant distribution reflecting the successful value realisation from the disposals.
What’s Left in the Tank?
So, what does the streamlined BBB look like now? It’s a leaner beast focused on two key equity stakes and some smaller operations:
- SKM Stake (29.1%-33.9%): The substantial retained holding in the new owner of Skymesh. BBB’s fortunes are now significantly tied to SKM’s success in Australia.
- Quickline Stake (2.8%): This UK-based broadband provider is on a roll. In FY24, it secured all four contracts it bid for under the UK government’s £5bn Project Gigabit programme (totalling c.£300m subsidy). It also secured a £250m debt package (including £100m backing from the UK Infrastructure Bank) to fund its large-scale fibre and fixed wireless rollout across Yorkshire and Lincolnshire. A potentially valuable, albeit minority, stake.
- Starlink Distribution: BBB holds contracts to distribute Starlink services in the UK/Europe and Australia. Revenue was £0.4m in FY24, with a reported £0.2m uptick in Q1 2025 vs Q1 2024. A smaller, but active, trading operation.
- New Zealand Operations: A very small continuing operation (£0.1m revenue in FY24).
Quickline: The Quiet Star in the Portfolio?
Quickline’s progress deserves a spotlight. Winning all four Project Gigabit bids makes it the second largest regional delivery partner in the UK programme. With £250m funding secured and plans to cover over 500k rural premises, this investment could become a major source of future value for BBB, even with its current 2.8% stake.
Financial Snapshot: The Core Numbers
With Australia and Norway now classified as discontinued, the continuing group is much smaller:
- Revenue (Continuing Ops): £0.7m (FY23: £0.7m) – primarily Starlink sales and service recharges.
- Adjusted EBITDA (Continuing Ops): Loss of £1.0m (FY23: Loss of £0.5m).
- Net Debt (Group at 30 Nov 2024): £6.5m – Fully repaid post-period end.
- Proforma Cash Post Disposals/Debt Repay/Tender: After the Skymesh cash (£14.9m), paying Santander (£6.9m), transaction costs (£0.9m), and the tender (£6.1m), BBB was left with c.£1.0m proforma cash (plus the ongoing value of its SKM/Quickline stakes and small ops).
The auditors issued a disclaimer related to the Skymesh accounts (not yet signed off locally by new owners), but stressed Skymesh is treated as discontinued in the Group accounts.
Boardroom Shuffle
Andrew Walwyn stepped down as CEO in May 2024 following the Norway MBO, in which he participated. CFO Frank Waters seamlessly added the CEO role to his responsibilities, leading the execution of the disposal strategy and the company’s next phase.
Looking Ahead: Sharpened Focus, Eyes on Value
BBB’s strategy is now crystal clear:
- Radical Cost Reduction: Slashing central costs to match the streamlined group size.
- Value Harvesting: Focusing entirely on extracting maximum value from the remaining portfolio:
- Supporting SKM (as a significant shareholder) to drive its success.
- Monitoring and benefiting from the potential growth of the Quickline stake.
- Managing the smaller Starlink and NZ operations efficiently.
The days of BBB as a diversified international broadband operator are over. It’s transformed into a focused holding company with two potentially valuable equity stories (SKM and Quickline) and some smaller trading activities. The board has delivered on promises to realise value, repay debt, and return cash. The next chapter is all about nurturing and ultimately realising the value locked in those remaining stakes. Shareholders will be watching closely, but the heavy lifting of the strategic shift appears done.
