ABB - Aussie Broadband

[InsvestoBoy]

and an Update today didn't assist, dropped 15% and took out any slight recovery.. .... basically from $6 to $3 in a couple of months.

Everything was up, up and away, beautiful numbers, growth hither and yon, and ....

But,all is not happy. The 3rd quarter woes are explained away, with the number crunchers still doubtful:
“Total broadband services increased by 35,882 to 584,793 over the fourth quarter of FY22 up 7%. Comparing the progress over the full 12 months of FY22, total broadband services were up 46%. “We are pleased with this result given the third quarter challenges we faced, and have been very focused on addressing over the past three months. Pleasingly, TV marketing has recommenced at customer acquisition costs more reflective of historic levels, and our call centres are returning to their previous strong customer service levels in terms of wait times. “

And NBN pricing looms . Still.
The Minister for Communications had instructed NBN to withdraw its proposed Special Access Undertaking (SAU) lodged with the ACCC, calling for a reset of the process and a rethink of NBN’s pricing approach. As part of the request, the Minister instructed NBN to put in place interim pricing arrangements from 1 December 2022 when current industry agreements expire, and to have a final pricing structure in operation by 1 July 2023.
Aussie Broadband welcomes the Minister’s intervention, and looks forward to continuing working with NBN, the ACCC and other stakeholders to create a sustainable pricing structure that provides certainty to the industry and consumers, and removes volume-based charging like the CVC (Connectivity Virtual Circuit).

I'm an ABB customer, love them and would probably pay $10/mo extra over what I already pay just to retain their excellent quality of service and customer support.

Easily the best brand in Australia if you ask me.

When they IPO'd, customers could get up to $10k allocation at $1/share. I missed out of entering their queue because of an urgent meeting, friend of mine who originally recommended them to me put his $10k and very happy even at $3/share

 

[Dona Ferentes]

back down, all the way

 

[Dona Ferentes]

Aussie Broadband is going after Telstra’s customers as annual net profits quadrupled to $21.7 million. The company is in talks with blue-chip Australian companies, including one of the top 10 listed companies by market capitalisation, to supply telecoms services, MD Philip Britt said

“There’s no real limitations to what businesses we go after." “We’re definitely hitting that top end of town as well as that mid-tier kind of space.”

Aussie Broadband is building out its own fibre network and now has 1426 kilometres of fibre connecting to 400 buildings, enabling it to offer more services to big customers such as Westpac.

It signed more than 800 deals over the year, signing up new customers, including Harris Farm, Jeanswest and Queensland Country Bank, which boosted revenues in its enterprise and government division by 8.5 per cent to $86.4 million.

The fibre infrastructure investments helped increase gross profit margins to 35.4 per cent from 33.3 per cent because Aussie Broadband no longer had to pay other carriers to provide its NBN connection services, Mr Britt said.
He forecast industry consolidation over the next 12 to 18 months as companies reposition, including TPG Telecom, which is looking to sell its fibre network to Vocus. And while Aussie Broadband is happy to grow organically, it is also open to acquisitions, Mr Britt said.

The nation’s fifth-largest provider of broadband services lifted its share of the broadband market to 7.6 per cent from 6.5 per cent a year ago. It is targeting a market share of 10 per cent by 2025.

“We can see a clear pathway that can get us there,” Mr Britt said.

• Broadband connections rose 18 per cent over the year to 691,172. Since the start of last month, connections have risen further to more than 715,000.
• Group revenues increased 23 per cent to a record $788 million, with all divisions posting increases.
• Earnings before interest, taxation, depreciation and amortisation, which exclude transaction and integration costs, more than doubled to $89.6 million.
• The group has forecast EBITDA this financial year will rise between 12 and 23 per cent on the previous corresponding period.

 

[Dona Ferentes]

Will the hard work be rewarded?

 

[Dona Ferentes]

acquiring SYB and raising capital.
.

Key Business Highlights
• Continuing to execute on strategy and build scale across our segments
• Strong FY23 results with growth across all key metrics including revenue of $788m (up 23.1%), EBITDA of $89.6m (up 52.1%) and broadband connections of 691k (up 18.2%)
• Successful OTW acquisition integration, transforming Aussie Broadband into a multi-segment technology and communications provider. Network integration due to be completed in FY24
• Continued investment in our infrastructure assets in order to expand reach
• Reaffirmed FY24 guidance at AGM including FY24 EBITDA of $100–$110m (excluding acquisitions)

Update on Symbio transaction
• Entered into Scheme Implementation Agreement for the acquisition of 100% of Symbio by Aussie Broadband
• Symbio’s shareholders to receive $2.26 in cash and 0.192 Aussie Broadband shares for each Symbio share which represents an equity value of $262m, implying a valuation of Symbio of $241m on an enterprise value basis
• Scheme subject to customary conditions, including shareholder approval, with completion expected to occur in February 2024

Equity raising
• $120m fully underwritten institutional placement and $15-20m share purchase plan
• Proceeds will be used to strengthen Aussie Broadband’s balance sheet in light of its capital investment pipeline, potential M&A opportunities and the proposed Symbio transaction

 

[Dona Ferentes]

acquiring SYB and raising capital.
.
• $120m fully underwritten institutional placement and $15-20m share purchase plan

now $3.70

The SPP received strong support from eligible shareholders, with valid applications totalling ~$43 million from 3,140 shareholders ... @ $3.55 per SPP Share. As the total value of applications received exceeded the SPP target size of $15-20 million, Aussie Broadband has undertaken a scale back, having regard to the pro rata shareholdings of eligible shareholders as at the record date.

The outcome is as follows:
- Eligible shareholders who applied for $1,000 of shares will not be subject to any scale back and will receive the amount they applied for, rounded down to reflect a whole number of shares. Accordingly, those shareholders will receive 281 new shares (for a total issue price $997.55), with their remaining application monies to be refunded
- Eligible shareholders who applied for more than $1,000 of shares have been subject to the scale back methodology having regard to their shareholding as at the record date for the SPP. The scale back methodology ensures that, subject to the $30,000 maximum application amount under the SPP, participating shareholders will receive an amount of new shares that:
o at least maintains their percentage shareholding in Aussie Broadband heldprior to the announcement of the Placement and SPP (Pro Rata Amount), subject to a minimum allocation of 281 new shares; or
o is equivalent to their application if that is lower than their Pro Rata Amount.

Approximately 98% of valid SPP applicants will receive at least their Pro Rata Amount, with most SPP applicants receiving an allocation well in excess of their Pro Rata Amount.

 

[Dona Ferentes]

now $3.80

Aussie Broadband leadership evolves for next phase of growth ... following the acquisition of Symbio:
• Current Co-founder and Managing Director, Phillip Britt, will become Group Managing Director for the Aussie Broadband Group and be responsible for Group Strategy, Merger and Acquisition activities, and will remain an active contributor to the technology divisions across the Group. The new CEOs of Aussie Broadband and Symbio will report to Phil.
• Current Chief Financial Officer, Brian Maher, appointed CEO of the Aussie
Broadband business with effect from 23 February 2024
• Current Executive Director, Michael Omeros, appointed CEO of the Symbio
business with effect from 28 February 2024, the scheme of arrangement implementation date
• Current CEO and Co-founder of Symbio, Rene Sugo, to remain with Symbio as an advisor to Michael Omeros as that business transitions to Aussie Broadband
• Andy Giles Knopp, appointed Interim CFO from 11 March 2024 while an executive search is undertaken for Brian Maher’s replacement as CFO
• Cheryl Cai, General Manager Legal, appointed Group Company Secretary and the person responsible for communications with the ASX under Listing Rule 12.6 with effect from 23 February 2024. Brian Maher will retire as Company Secretary.

Chairman Adrian Fitzpatrick said: “Since listing on the ASX almost four years ago, Aussie Broadband has rapidly grown from a regional telco into a diversified technology business.
"The leadership changes announced today will solidify the Group's management structure for its next phase of growth. Our internal succession plan has allowed for a seamless transition to such a high calibre leadership team."

Co-founder & Group Managing Director Phillip Britt said: “The new leadership structure reflects the company's evolution since our ASX listing in 2020, and the
exciting opportunities ahead.

 

[Dona Ferentes]

1H FY24 highlights (vs 1H FY23):
• Revenue grew 17.7% to $445.9 million
• EBITDA before non-recurring items grew 12.7% to $46.3 million
• Operating cash flow grew 57.8% to $40.7 million
• Total broadband connections grew 20.6% to 765,800 with strong growth across all segments
• Increased NBN broadband market share (excluding satellite) 1.3 ppt to 8.3%
• On track to complete the acquisition of Symbio Holdings (due 28 February 2024, post balance date) providing cloud-based voice and messaging capabilities. Strategically complementary to Aussie’s business
• Successfully raised $140 million through a strongly supported institutional placement and retail share purchase plan, strengthening the balance sheet and providing funding for the Symbio acquisition and other potential M&A
• Aussie Broadband awarded Service Champion for Customer Service
Organisation of the Year, and Service Champion for Project of the Year Customer Impact at the Customer Service Institute of Australia ASEA awards
• Aussie Broadband again recognised by The Roy Morgan “Risk Monitor” rankings as Australia’s most trusted telco.

 

[Dona Ferentes]

1H FY24 highlights (vs 1H FY23):
• Revenue grew 17.7% to $445.9 million.

and ABB ran well on Friday, then Monday make all scrip offer for Superloop SLC after taking up 19.9 per cent of the target at 95c.

ABB went higher today, both boats lifted. SLC closed at $1.00

 

[Dona Ferentes]

Aussie Broadband Limited (ASX:ABB) received unexpected notice on the evening of 13 March 2024 that Origin Energy Retail Limited will terminate the White Label Wholesale Agreement.

... and Superloop SLC picked it up

going to make it interesting for the all scrip offer ... now $4.33

 

[Dona Ferentes]

dead in water?

Aussie Broadband recently announced that it had acquired voting power of 19.9% in Superloop. The acquisition was made without the prior approval of the Info-communications Media Development Authority (IMDA) in Singapore, as required by Superloop's constitution.

Promptly after becoming aware of ABB's acquisition, Superloop wrote to Aussie Broadband raising its concern that the acquisition of SLC shares by Aussie Broadband was a contravention of Superloop's constitution. Aussie Broadband has confirmed that it is in breach of Superloop's constitution (which) prohibits acquisitions of 12% or more without the requisite statutory approval from the IMDA in Singapore. The relevant constitutional powers, which are prominently disclosed on
Superloop's investor centre website (https://investors.superloop.com/Investors/?page=Corporate-Governance), protect Superloop's ability to meet its statutory obligations.

 

[galumay]

Who knows, its very odd that a companies constitution in a foreign country would have any weight on the ASX where it is listed. My initial reaction would be that if it has any enforceable power, then SLC should be immediately de-listed from the ASX.

 

[Miner]

Any comments on today's slump for 12% lower prediction?

 

[Dona Ferentes]

Any comments on today's slump for 12% lower prediction?

make that 18 per cent !

.
... further cash spend in a fragmented market !?

FY25 Guidance
Following today’s announcement of Buddy Telco, Aussie’s new digital first challenger brand, the Group (including Symbio) provides the following guidance for FY25.

Prior to the impact of Buddy Telco, the Group provides an EBITDA guidance range of $135m to $145m. This represents an increase of between 12% and 20% from the top of the FY24 guidance range. Including the impact of Buddy Telco, the Group provides an EBITDA guidance range of $125m to $135m.

The Group expects to invest approximately $10m in Buddy marketing, brand and other setup/one-off related opex during FY25. Buddy is expected to provide a positive EBITDA contribution from FY27 onwards.

The Group is also providing capex guidance of $55m to $60m inclusive of capitalised software development costs. The capex range is $8m lower than the FY24 Group comparable due to excess capacity becoming available on the network following the migration of Origin customers. This excess capacity will be progressively utilised by Aussie Broadband and Buddy Telco during FY25.

The FY25 range is based on current market conditions, operating plan, and pipeline.
Investor briefing at 11am AEST today

 

[Miner]

make that 18 per cent !
View attachment 180751.
... further cash spend in a fragmented market !?

FY25 Guidance
Following today’s announcement of Buddy Telco, Aussie’s new digital first challenger brand, the Group (including Symbio) provides the following guidance for FY25.

Prior to the impact of Buddy Telco, the Group provides an EBITDA guidance range of $135m to $145m. This represents an increase of between 12% and 20% from the top of the FY24 guidance range. Including the impact of Buddy Telco, the Group provides an EBITDA guidance range of $125m to $135m.

The Group expects to invest approximately $10m in Buddy marketing, brand and other setup/one-off related opex during FY25. Buddy is expected to provide a positive EBITDA contribution from FY27 onwards.

The Group is also providing capex guidance of $55m to $60m inclusive of capitalised software development costs. The capex range is $8m lower than the FY24 Group comparable due to excess capacity becoming available on the network following the migration of Origin customers. This excess capacity will be progressively utilised by Aussie Broadband and Buddy Telco during FY25.

The FY25 range is based on current market conditions, operating plan, and pipeline.
Investor briefing at 11am AEST today

Thanks @Dona Ferentes .
Yes, I read two reports and the one last week.
The price impact on 12% expected lower return, I felt too much.
The AI investment was totally ignored by the market. So was looking for some comments to explore the in between lines of the reports.
Let's hope investors brief will check the reality.

 

[divs4ever]

i haven't looked at ABB recently

i only bought into TLS recently as a 'safe-haven ' ( in May 2024 ) ( thinking it is too important for the government to let fail ) , not a potential multi-bagger investment

i see regulation intervention as a major problem in Australian telcos

and my major telco exposure is in TUA ( Singapore and Malaysia ) and SPK ( NZ )

i see the telco space in Australia as the cash-cow the government can't resist from milking

so my question is .. can ABB resist such a negative climate ( without the assistance of Big Government in crisis times )

 

[Miner]

i haven't looked at ABB recently

i only bought into TLS recently as a 'safe-haven ' ( in May 2024 ) ( thinking it is too important for the government to let fail ) , not a potential multi-bagger investment

i see regulation intervention as a major problem in Australian telcos

and my major telco exposure is in TUA ( Singapore and Malaysia ) and SPK ( NZ )

i see the telco space in Australia as the cash-cow the government can't resist from milking

so my question is .. can ABB resist such a negative climate ( without the assistance of Big Government in crisis times )

Good multi million dollar question @divs4ever . It can not be answered even by any one of the trio Phillip Britt, Jonathan Prosser or Andy Giles Knapp.
When you see they have started selling shares progressively or similar ole with a competitor (not alone TLS Telstra), the time will be right to quit ABB

 

[Miner]

While replying to @divs4ever , I noticed the ASX announcement did not include the famous statement (unless I have missed with my post operated eye) that this announcement was authorised by the Board . I believe it is now standard (good practice compliance ??) practice to state so.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02827751-3A645929

 

[Miner]

I was searching for some analysis on ABB based on the crash that happened today.
Found Market Matters report.
Do I take that with a pinch of salt? The company recommended it and is probably trying to justify it.
Some of the postings on this thread suggest that with competition, ABB is probably in deep soup, and TLS must survive. What about TLS acquiring it to reduce competition?

MM is saying BUY today with a target price of $4 +

 

[divs4ever]

I was searching for some analysis on ABB based on the crash that happened today.
Found Market Matters report.
Do I take that with a pinch of salt? The company recommended it and is probably trying to justify it.
Some of the postings on this thread suggest that with competition, ABB is probably in deep soup, and TLS must survive. What about TLS acquiring it to reduce competition?

View attachment 180779

View attachment 180781
MM is saying BUY today with a target price of $4 +
View attachment 180782

i suspect TLS will be vetoed from buying the smaller guys because eventually the NBN will have to be privatized ( and TLS would be the only one big enough to payout the liabilities acquired )

now there is some consolidation among the small players ( TPG is probably at maximum tolerable size )

so would ABB be prey or predator ?

or would there be 'mergers of equals ' ?

remember the Federal Government needs some competition so it can milk the bandwidth cash-cow