SLC - Superloop Limited

[Dona Ferentes]

maybe this is what is needed.... shrinking to greatness. up 15%.

The uptake or utilisation numbers for HK network were only about 5% and Singapore not that much better. Now I know capacity can't be run at 100% but maybe its better to concentrate on Oz market (or even get taken over?)

and that surge didn't last too long, From under $1 it ran to $1.30 on the hope a slimmed down SLC would meet or even exceed expectations. These seem to be somewhat dashed with the 1H22 results (Affirm FY22 underlying EBITDA is expected to be in a range of A$23m to A$25m) not getting anyone excited.

Plumbed the depths below 81c recently (6 days ago) .... but running to 93c today. Maybe it is an attractive target following the move on UWL (most of whose business is from providing core fibre infrastructure to housing estates and other multi-dwelling developments, and selling space on the network to internet service providers) ? As an "enabler of connectivity and managed services ... to key data centres and commercial buildings," with "carrier-grade fibre networks.... and fixed wireless networks in Australia", it could be in someone's sights?

Though the website hasn't been curated for a while. HK and Singapore still feature heavily

 

[Dona Ferentes]

Further to Superloop’s announcement dated 18 October 2021 that it has entered into a binding agreement with funds affiliated with Columbia Capital and DigitalBridge Investment Management to sell Superloop (Hong Kong) Limited and certain select assets from Superloop (Singapore) Pte Ltd for $140M, Superloop wishes to advise that deal completion remains on track with material pre conditions now met, other than one regulatory approval. Management expects the final pre-condition of that regulatory approval to occur before the end of April 2022.

Remove the uncertainty, and a few buyers jump in/ sellers reset a bit higher. With UWL in a bit of a contest from 2 potential suitors, a cleaner, back to basics SuperLoop could be a target in the future (maybe too soon for the April comp?).

 

[peter2]

The prior takeover offer of $1.90 was a long time ago. (May19).
Price has bounced off a two year support level (0.80). The volume in the bounce wasn't much. Probably just a few retail traders hoping that something may happen soon.

 

[Dona Ferentes]

Price has bounced off a two year support level (0.80). The volume in the bounce wasn't much. Probably just a few retail traders hoping...

SLC pulled up to low 0.90's but was getting squashed every time it tried to go much higher,

Gross sale price of Singapore and HK assets, before the cost of the Indefeasible Right of Use purchased by Superloop, remained unchanged at A$140 million, with cash settlement proceeds of approximately A$125 million.

Paul Tyler, CEO and Managing Director of Superloop, said,

"This successful sale is a significant next step in our three-year turnaround plan aimed at simplifying the business to focus on core markets of scale. "This divestment, at a 30% premium to the carrying value of the associated assets, strengthens our balance sheet and opens up new pathways for growth. "Our intent remains to deploy this capital to grow the business, across all three market segments as a challenger.

"Our focus remains on consumers looking for better service and value, businesses seeking to move away from underperforming and uncompetitive legacy arrangements, and new wholesale partners seeking access to automated, high quality infrastructure on much more flexible terms. "Our significant net cash position enables us to consider further investment in organic growth, and on strategically-aligned M&A opportunities.”

.... a bit of a rebound off sub 90c, on this clarification but it's a competitive market. Yes, there will be M&A, and on what side of the transaction might they end up; and growth per se is usually cannibalising a competitor, based on price.

 

[Dona Ferentes]

SLC pulled up to low 0.90's but was getting squashed every time it tried to go much higher,.

not getting it done. Down down down.

With that cash burning a hole, in their wisdom, there's another acquisition. Usual blah, but the telco ICT sector is a wasteland of poor returns

SLC has conditional sale and purchase agreement to acquire Acurus Holdings Pty Ltd, a Melbourne-based white label and technology firm. The acquisition will allow Superloop to expand white label broadband relationships and profitable growth in its subscriber base.

- AU$15 million, comprising AU$12 million in cash and AU$3 million in SLC shares. The vendors may also be entitled to 'earn out' payments

Acurus’s white label platform and services support the Internet offerings behind major brands such as Energy Australia and OfficeWorks. Other household brands, including Bakers Delight, Zen Energy, Roy Morgan and Hume Bank, have accessed Acurus’ Managed service offerings, SD-WAN and Cyber Security Services.

 

[Dona Ferentes]

Now instituting a buyback of shares.

Someone thinks it's oversold.

 

[Dona Ferentes]

and the mythical cash flow positive event horizon is extended, I would suspect. Acquire or be acquired in ICT land? At least this acquisition is within the skill set and funded from within.

SuperLoop will ... acquire VostroNet Holdings Pty Ltd, a provider of wholesale Fibre-to-the-Premises access networks and purpose built student accommodation broadband. The acquisition consolidates and expands Superloop’s strong managed WiFi position into adjacent On-Net broadband markets.

VostroNet is an infrastructure owner and internet provider delivering highspeed FTTP and intelligent WiFi networks for multi-dwelling and broadacre developments serviced with VostroNet fiber networks. Key customers include UniLodge, Iglu Student Accommodation, Queensland University of Technology and Sunshine Coast Council for WiFi solutions and Billbergia, CBUS and Consolidated Properties for smart FTTP network infrastructure.

The combination of assets will deliver a market-leading position in the supply of broadband in the Tertiary Student accommodation sector, delivering national coverage to approximately 40,000 student beds. As discussed in Superloop’s recent earnings call, it is encouraging to note this market segment has now recovered to its pre-COVID levels. The acquisition represents the next step in Superloop's strategy to develop its OnNet Smart Communities division via the addition of FTTP capabilities, installed base and pipeline to address adjacent markets such as New Developments, Build to Rent, broadacre and MDU markets and associated infrastructure builds.

Consideration for the acquisition is AU$35 million (before customary completion adjustments), comprising AU$24.5 million in cash and AU$10.5 million in Superloop shares. The vendors may also be entitled to 'earn out' payments (capped at AU$15m in cash), subject to meeting certain take-up targets...

The acquisition will be funded from Superloop's existing cash reserves.

 

[Dona Ferentes]

In the 3 year, bi-lateral agreement, Superloop and Uniti have each agreed to terms whereby Superloop will preference Uniti for various Consumer services and Uniti will preference Superloop’s Business and Wholesale offerings. Superloop will also acquire Layer 2 services on the Uniti network for the same period.

( Uniti was listed until a consortium of Brookfield and super funds took it private in Aug 2022 )

That and the AGM today has seen a small lift off lows to be 67c .

Our strategy is clear and simple - we are leveraging our quality telecommunications infrastructure assets to support the Challengers in our market (Superloop included) to gain a 30% share of the Australian internet/connectivity market. Following significant progress made in FY22, Superloop is now a far simpler and attractive investment, underpinned by organic growth momentum, growing EBITDA and a strong balance sheet with capital flexibility.

 

[Dona Ferentes]

SLC register is becoming a bit more open.

Bevan Slattery has sold down from 13.2% to 8.45%
Regal Funds has lifted from 5.07% to 9.15%.
And I presume other insto's have picked up the remainder. SLC now mid 70's, up from below 60c in mid Sept

 

[Dona Ferentes]

SLC register is becoming a bit more open.

Bevan Slattery has sold down from 13.2% to 8.45%

and gone.......
Bevan Slattery, founder and former executive chairman sold his final 40.8 million shares on Friday, representing the final 8.5 per cent stake in Superloop. Stockbroker Morgans put together a group of institutional investors to bid 70¢ a share for the stake,

 

[Dona Ferentes]

hard to make a quid in telcoland, and I guess acquiring some more punters in a bulk deal is efficient, as long as they don't migrate elsewhere (Oh, fickle consumers)

SLC has executed a subscriber transfer agreement to acquire all of MyRepublic Pty Ltd’s 52,000 (approximately) NBN subscribers at $250 per migrated subscriber. The agreement relates to the acquisition of subscribers only and does not include any assets or liabilities of the MyRepublic legal entity. The agreement is effective from 23 December 2022 with completion expected shortly thereafter. The bulk of MyRepublic customers are expected to migrate to the Superloop brand during February 2023.

The final purchase price will be adjusted to reflect the exact number of subscribers who will ultimately migrate to Superloop. Should all potential subscribers migrate, total consideration would be A$13,000,000 (approx.).

The acquisition will be immediately accretive with all synergies being realised during the migration process and does not involve any material increase in Superloop operating and capital costs. Post-acquisition, Superloop’s Consumer segment will continue to target gross margins of 25%. On a post synergy, pro-forma basis, the acquisition is expected to add $6.5m of EBITDA to Superloop in the first 12 months.

Superloop CEO, Paul Tyler said “We are delighted to welcome MyRepublic customers to the Superloop experience. This purchase is strongly accretive for shareholders as it provides growth at scale at a very attractive multiple of approx 2x EBITDA (post synergy).

"Superloop’s unique, highly automated platform will allow for a seamless migration process with MyRepublic customers benefitting from Superloop’s attractive NBN plans.”

 

[The Triangle]

hard to make a quid in telcoland, and I guess acquiring some more punters in a bulk deal is efficient, as long as they don't migrate elsewhere (Oh, fickle consumers)

SLC has executed a subscriber transfer agreement to acquire all of MyRepublic Pty Ltd’s 52,000 (approximately) NBN subscribers at $250 per migrated subscriber. The agreement relates to the acquisition of subscribers only and does not include any assets or liabilities of the MyRepublic legal entity. The agreement is effective from 23 December 2022 with completion expected shortly thereafter. The bulk of MyRepublic customers are expected to migrate to the Superloop brand during February 2023.

The final purchase price will be adjusted to reflect the exact number of subscribers who will ultimately migrate to Superloop. Should all potential subscribers migrate, total consideration would be A$13,000,000 (approx.).

The acquisition will be immediately accretive with all synergies being realised during the migration process and does not involve any material increase in Superloop operating and capital costs. Post-acquisition, Superloop’s Consumer segment will continue to target gross margins of 25%. On a post synergy, pro-forma basis, the acquisition is expected to add $6.5m of EBITDA to Superloop in the first 12 months.

EBITDA for them is pretty worthless when the depreciation and amortization is so damn high. I don't see any world where superloop can justify a $300m market cap @ 61 cent SP.... The cash does not seem to support this MC, the net assets don't seem to support this market cap, the earnings don't seem to support this market cap. I don't get it.

They've got a very long way to go to turn a profit. They may have increased their "EBITDA" but they also increased their losses.

 

[Knobby22]

EBITDA for them is pretty worthless when the depreciation and amortization is so damn high. I don't see any world where superloop can justify a $300m market cap @ 61 cent SP.... The cash does not seem to support this MC, the net assets don't seem to support this market cap, the earnings don't seem to support this market cap. I don't get it.

They've got a very long way to go to turn a profit. They may have increased their "EBITDA" but they also increased their losses.
View attachment 154037

Basically they are a price taker, not maker. I can't see them ever being highly profitable. If a link needs more capacity, someone will install another fibre and suddenly they lose half their traffic.

 

[Dona Ferentes]

Hello hello, anyone THERE?

 

[peter2]

Coincidence or not ? I noticed a TV add for Superloop internet last night and today the price spikes up. First ad I've seen for them.

 

[Dona Ferentes]

EBITDA is pretty worthless when the depreciation and amortization is so damn high.... got a very long way to go to turn a profit... may have increased EBITDA but they also increased their losses.

Still pushing through stuff. Investor slides out; and cleaning up intangibles.

Clear and simple strategy
-- Financial stability
-- Platform for growth

Restructured and significantly reinforced balanced sheet
–
On track to be free cash positive in 2H FY23 and NPATA positive in FY242
–
Dramatically improved earnings profile
–
Completed the clean-up of past M&A
–
Delivering significant organic growth in all segments

...... someone's buying it

 

[Dona Ferentes]

Proposal to acquire Symbio and FY23 Earnings Upgrade

Superloop Limited (ASX: SLC) announces that it has made a non-binding indicative proposal to acquire all of Symbio Holdings Limited’s (ASX: SYM) shares via a scheme of arrangement.
The Proposal values Symbio at A$2.85 per share, with consideration for the Proposed Transaction being an equal split of cash and Superloop shares
. The Proposal also contemplates releasing up to A$0.15 per share franking credits through the payment by Symbio of a fully franked dividend of up to A$0.35 per ordinary share to Symbio shareholders prior to scheme implementation (Special Dividend).

FY23 Upgraded Earnings Guidance

Superloop continues to perform well across all aspects of its business and is pleased to provide upgraded earnings guidance for the financial year ended 30 June 2023.

Based on unaudited management accounts for the 12 months of trading to 30 June 2023, Superloop now expects that the reported underlying earnings before interest tax, depreciation and amortisation (Underlying EBITDA) is likely to be around $37.0m, which is above the top end of the guidance range (of $33m to $36m) provided to the market at Superloop’s Annual General Meeting on 11 October 2022.

Paul Tyler, Superloop CEO and Managing Director said, “Superloop has experienced stronger than anticipated organic trading performance in the second half of the year with all three trading segments performing ahead of expectations.

"We are very pleased with the performance of the business and the financial outcomes that are demonstrating the continuing success of Superloop’s turnaround. We are also very excited by the opportunities that lie ahead for Superloop in FY24 and beyond.”

 

[Dona Ferentes]

Coincidence or not ? I noticed a TV ad for Superloop internet last night and today the price spikes up. First ad I've seen for them.

Still spending on visibility. ... saw an ad tonight; which didn't "talk" to me, but I'm not their target demographic.

Any price move tomorrow relates to the update / upgrade / acquisition, most likely

 

[galumay]

Seems an odd move for an unprofitable company operating in a low margin business. I guess its the business model, grow revenue with acquisitions to mask lack of organic growth.

 

[Dona Ferentes]

69c...
.
Superloop completes strategic transformation and exceeds guidance for FY23
Superloop Limited (ASX:SLC) is pleased to announce strong performance for the financial year ended 30 June 2023, with Underlying EBITDA from continuing operations improving by 82.2%from $20.5 million to $37.4 million, exceeding guidance of $33.0m to $36.0m.

The result was driven by double-digit revenue growth in each of the Company’s three operating segments, reflecting a 52.8% increase in total connected customers utilising the Superloop network.

Financial Highlights
■ Total Revenue from continuing operations was $323.5 million vs $249.7 million in the Prior Corresponding Period, an increase of 29.5% (including the impact of acquisitions). The organic increase in revenue from continuing operations was 17.9% compared to the PCP.
■ Overall gross margin from continuing operations of $116.9 million (or 36.1% of revenue up from 32.6%in the PCP), increased from $81.5 million in the PCP. Gross margins have improved across all three customer segments.
■ Operating costs (excluding marketing) as a percentage of revenue decreased to 20.1%, reflecting ongoing cost discipline and the benefits of the Company’s digital transformation initiatives.
■ Underlying EBITDA from continuing operations of $37.4m, an increase of 82.2% compared to $20.5m in the PCP.
■ Operating Cash Flow in excess of the reported Underlying EBITDA, supported by a one-off change to NBN billing timing.
■ Strong Balance Sheet with a Net Debt3 Position of $13.3 million plus undrawn debt capacity of $49.0 million as at 30 June 2023.
■ Achieved a major financial milestone, with the Company transitioning to being NPATA and Free Cash Flow positive in the second half of FY23.
■ An on-market buyback program, purchasing 11.2m shares for a net consideration of $8.6m was complete.
.
Syndicated Debt Facility Renegotiation
On 21 July 2023, the Group successfully refinanced its three-year revolving facility with its syndicate banks (currently Westpac, HSBC and ANZ), increasing the committed funding to $100 million (comprising a $96.0 million revolving debt facility and a $4.0 million bank guarantee facility) with a maturity date of 30 September 2026. The Group is required to adhere to customary financial covenants, including leverage ratio, minimum capital requirement and interest cover ratio.

FY24 Trading Update
The strong momentum gathered in FY23 has accelerated in the first quarter of FY24. In the Consumer segment, the broader awareness of the Superloop brand has underpinned our outsized share of the NBN fibre upgrade footprint, and the Company projects its net growth in broadband services for the first two months of FY24 to be approximately 10k services. On the Business and Wholesale front, we have launched an innovative new “biz” product suite, and the strength of our offering in the SD-WAN and SASE market has led to new contracts with a number of high-profile customers such as Baptcare.

Symbio Non-Binding Indicative Offer
Superloop announced on 01 August 2023 a non-binding indicative proposal to acquire all of Symbio’s shares via a scheme of arrangement (Proposal) and the entry into a 4-week period of exclusivity to complete confirmatory due diligence. Discussions and due diligence are continuing, and the parties have agreed to extend exclusivity by an
additional two weeks. Superloop notes that the Proposal is preliminary and incomplete and there is no guarantee that any agreement will be reached or that a transaction will eventuate.