Bigblu Broadband plc
Annual Report & Financial Statements
For the year ended
30 November 2021
A Company Registered in England & Wales No. 09223439
Bigblu Broadband plc
Contents
For the year ended 30 November 2021
Company Information
Company Overview
Strategic Report
Chairman’s Statement
Chief Executive Report
Financial Review
Principal Risks and Uncertainties
Section 172 (1) Statement
Governance
Directors’ Report
Board of Directors
Statement of Directors’ Responsibilities
Corporate Governance Statement
Independent Auditor’s Report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Company statement of financial position
Consolidated statement of cash flows
Company statement of cash flows
Consolidated statement of changes in equity
Company statement of changes in equity
Notes to the financial statements
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Bigblu Broadband plc
Company Information
For the year ended 30 November 2021
Directors
M Tobin OBE
A Walwyn
F Waters
P Howard
C Mills
P Moses
Company registration number
09223439
Company secretary
Registered office
Broker & Nominated adviser
Solicitors
Registrars
Auditors
B Harber
6th Floor
60 Gracechurch Street
London
EC3V 0HR
finnCap Ltd
60 New Broad St
London
EC2M 1JJ
Shepherd and Wedderburn LLP
5th Floor, 1 Exchange Crescent
Conference Square
Edinburgh EH3 8UL
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
1
Bigblu Broadband plc
Company Overview
For the year ended 30 November 2021
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 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.
2
Bigblu Broadband plc
Strategic Report
Chairman’s Statement
For the year ended 30 November 2021
2021 has been an eventful but positive year for Bigblu Broadband plc (BBB).
In June 21, BBB announced the disposal of its majority interest in Quickline to funds managed by Northleaf Capital
Partners (“the Disposal”) and this was completed in June 2021. Northleaf plan to undertake significant further
investment in building a market leading business.
The consideration due to the Company following the Disposal was total cash consideration of up to £41.2m of which
£31.1m was paid on completion, with a further £10.1m as deferred contingent consideration that remains subject to
certain performance conditions being met by 31 March 2022, or in certain circumstances, 31 May 2022; and £5.6m
being satisfied in shares (£2.2m) and Loan Notes (£3.4m at an interest rate of 4.5% pa) that were issued to the
Company on completion and an additional award of Loan Notes (with an option to convert partially into equity) of up
to £1.8m subject to the conditions of the deferred contingent consideration also being met.
The Company exercised its option to convert £2.2m (40%) of the Loan Notes into equity and, following further
investment into Quickline by Northleaf, the Company currently has an c.7% stake in the business as at 30 November
2021 (excluding the £1.8m of Loan Notes that are subject to the conditions of the deferred contingent consideration
being met).
The Board believed that the disposal provided the Group with the opportunity to crystalise an attractive return on
invested capital with respect to the sale of Quickline to Northleaf with the maximum consideration payable by
Northleaf to BBB representing a premium of approximately 600 per cent over the aggregate consideration paid
during the Group's buy and build strategy. In addition, the Group retains a stake in the ongoing business with the
funding support to materially expand its rural footprint across Northern England.
Following completion in June 2021 BBB's remaining operations consist of its Australian operations (SkyMesh Pty
Limited) and its Nordics business (Bigblu Norge AS) (together, the "Continuing Group"), and its remaining
investment in Quickline.
Our majority owned subsidiary at the time Quickline, announced in December 2020, that it had won a further
competitive tender to provide significantly improved broadband speeds to premises across North Yorkshire that are
unable to access fast and reliable internet connectivity. At the same time Quickline received a further £2m
investment from external shareholders, to fund its growth. This had the effect of reducing BBB’s controlling interest
to 56.9%.
In January 2021 BB announced that Quickline has joined Cityfibre ’s full fibre network to deliver Gigabit home
broadband in four locations across England, and then on 30 March 2021, Quickline announced that Sean Royce
would join the Quickline board as CEO on 4 May 2021, to bring a wealth of experience to the business and to further
develop its growth strategy and focus on establishing Quickline as a leading provider of rural broadband services
across Northern England and beyond.
In February 2021, BBB announced that its Australian Subsidiary, SkyMesh, had signed an important Partner
Agreement with leading next-generation Asia Pacific broadband satellite operator Kacific Broadband Satellites
Group to provide a high-speed broadband internet service initially across New Zealand.
At the time of the announcement of the Disposal of Quickline, the Board of the Company made it clear that it would
explore means of returning any surplus cash to shareholders within BBB's current financial year. Following
completion of the Disposal, and receipt of the initial cash consideration, the Company had outstanding gross debt
of £8.4m and gross cash of approximately £41m.
After giving due consideration to the investment opportunities of the Group, the Board announced the proposed
3
Bigblu Broadband plc
Strategic Report
Chairman’s Statement (continued)
For the year ended 30 November 2021
return of approximately £26m in aggregate to Shareholders and chose to implement this as a return of capital
through a bonus issue of a new class of B shares, which the Company redeemed for cash in order to return 45
pence per Ordinary Share to Shareholders. This return of value was completed in October 2021.
In addition, the Company repaid all outstanding debt of £8.4m and retained a reduced facility with its bank Santander
of £5m.
The Board will continue to focus on enhancing shareholder value from the Continuing Group, which has significant
opportunities for continued growth and value realisation. It will consider further strategic M&A alongside potential
returns of capital to shareholders.
Accepting fully that this was a major event for BBB in the period I am very pleased to be able to report another year
of growth for the Continuing Group. The highlights are as follows:
• Customer connections ended on c.59k after organic growth of c.6k customers. We have continued to invest
in our people and have made significant improvements in our back-end systems, to ensure we are well
placed going into 2022 to capitalise on opportunities in our target continuing markets.
• During the year, despite the inevitable distraction of the sale process we generated good growth in our
Continuing business, which resulted in a 15% increase in constant currency like-for-like revenues in the
year (2020: increase 4%) as well as improved profitability and cash flow generation
As stated in previous years, I am a strong believer that good corporate governance supports a group’s long-term
success. This is very important for 2022 and beyond, given the planned growth of the continuing operations and the
very exciting opportunities in Australasia and the Nordics. The structures, advisers and committees we have in place
for establishing and articulating the Board’s strategy and monitoring the performance of the Group’s management
continue to function well and add value for the group’s shareholders.
Part of our governance regime is our continued regular communication with shareholders as our strategy continues
to progress. To this end, we embarked upon an inclusive investor relations programme in 2020 which has continued
throughout 2021, and we will continue to interact with shareholders on a regular and proactive manner. This year
the AGM will be held on 19 May 2022 and such notice of the AGM will be circulated to shareholders shortly.
Finally, I would like to thank Andrew Walwyn, his management team and all the staff in the Group for their efforts in
2021. Everyone played their part in a demanding yet successful year in the Group’s life. I, and the rest of the Board,
fully recognise the continued impact that COVID-19 virus brings on a global scale and recognise that the team are
working very hard to look after our existing customers and support new customers requiring our service and so
continue to look forward to the remainder of 2022 with confidence.
Michael Tobin OBE
Chairman
21 March 2022
*Superfast is defined as broadband speeds in excess of 30Mbps
** Ultrafast is defined as broadband speeds in excess of 100Mbps
4
Bigblu Broadband plc
Strategic Report
Chief Executive Report
For the year ended 30 November 2021
Overview
2021 was another important year for the Group, with the Disposal of the Group's majority interest in Quickline, the
UK fixed wireless business, to Northleaf. Following completion in June 2021, BBB's remaining operations consist of
our Australasian operations and our Nordics business. The Company also continues to hold a minority interest in
Quickline.
In the six years since listing, the Group has successfully executed its strategy of becoming a leading provider of
rural broadband solutions, realising shareholder value through the disposals of its UK and European satellite
operations and Quickline, and has established a market leading presence in Australasia, via SkyMesh and a strong
Nordics presence.
The Directors consider that the Group has created a strong value proposition by combining management experience
and core IT systems which enable the Group to control costs, increase margins and average revenues per user
(ARPU). The Directors believed that the disposals in 2020 and 2021 not only realised significant value for the
Company’s shareholders but left the business with a robust platform for growth and an established position across
our markets from which to grow and service our customers. At the same time, the Group has focused on reducing
costs to align these to the relative size of the business.
The Continuing Group
Following the Disposal, the Continuing Group has two distinct businesses with 59k customer connections and given
their respective strengths, each of the business units has potential opportunities to enhance further shareholder
value.
A review of our Continuing Operations:
Australasia
Our SkyMesh business continues to be the leading Australian satellite broadband service provider. For the year
ended 30 November 2021, total revenues from SkyMesh were £21.8m, adjusted EBITDA of £4.0m and as at 30
November 2021, SkyMesh had 50k customers (FY20: 46k). Having been named Best Satellite NBNCo Provider in
2019, 2020 and again in 2021, SkyMesh continues to secure over 50% market share of net new satellite adds under
the NBNCo scheme as demand continues to grow for the Sky Muster Plus product. SkyMesh is seeing growth in
the business sector subsequent to the release of a new business focused product by NBNCo and this momentum
will continue into 2022.
Having assessed the opportunity in this region, we continue to believe that, whilst the organic growth remains highly
impressive, this growth could be complemented by certain partnerships or acquisitions that could accelerate the
Group’s presence into the wider Australasia region. As announced in February 2021, SkyMesh signed an agreement
with Kacific to provide services into New Zealand and has signed its first customers in December 2021. In addition,
post-period end, the Company completed the acquisition of certain assets and customers from Clear Networks (Pty)
Ltd ("Clear"). Clear is an Australian ISP based in Melbourne offering a suite of NBNCo broadband products, as well
as a private fixed wireless network primarily serving the greater Melbourne area. This acquisition has helped the
Company strengthen its presence in this area as SkyMesh looks to grow its presence across Australia.
Overall, the Board continue to believe that there are excellent growth opportunities for SkyMesh to not only increase
its presence in its core market of Australia but also to expand its reach across the Australasian region.
Nordics
Our Nordics business, Bigblu Norge, has a large in country footprint and has historically delivered strong EBITDA
and Free Cash Flow. However, over recent years the performance of the region has proved a challenge as the
Company’s offering in the region suffered from high levels of customer churn due, in the Board’s opinion to low
broadband speeds and increased competition from fibre offerings as well as the loss of customers as the company
5
Bigblu Broadband plc
Strategic Report
Chief Executive Report (continued)
For the year ended 30 November 2021
demounted loss-making sites. The challenges experienced in the Nordic region in the period saw a reduction in both
revenue and adjusted EBITDA. Total revenue from the Nordics for the year ended 30 November 2021 was £4.6m
and adjusted EBITDA was £1.9m.
As previously announced, in order to address these challenges, the Group focused on upgrading its existing
infrastructure including 55 towers so as to be able to offer speeds up to 100Mbps to over 1500 customers whilst
also demounting 100 loss making sites. The Board believes that this demounting of loss-making sites will help the
region to make great strides in improving its EBITDA. The Company ended the period on 9k customers in the region
(FY20: 11k), which includes the loss of 4k customers as a result of the withdrawal of the loss-making demounted
sites together with underlying growth of 2k customers.
The Board believes that it now has a clear plan in place to diversify the Company’s customer offering in the Nordics
and broader routes to market are expected to help drive customer growth. Through a distribution agreement with
Telenor, we have started offering our new 5G Fixed Wireless product with speeds up to 500Mbps and unlimited
data packages. Due to delays in equipment availability, this ‘white-label’ initiative is running approximately six
months behind schedule and as a result, this new 5G Fixed Wireless product was launched during Q1 2022. The
Board believes that this initiative will allow us to complete our strategy of delivering a high-quality broadband
experience to all customers wherever they reside: we will deliver true wireless broadband to all end roads and rural
areas. In addition, the Company continues to expand its offerings through partnerships and resellers, as well as
reaching out to the Finnish and Swedish markets.
More recently, one of our Satellite network partners that has customers in the Ukraine was targeted by a cyber event
caused by the terrible situation in Ukraine. This event has impacted c.3k of the Company’s Norwegian satellite
customers. Progress has been made in the resolution of the cyber event and the Nordic team are in regular dialogue
with the network provider on solutions and timescales and also with our customers to ensure that they are supported
as far as possible. However, should this not be resolved rapidly, a prolonged period without service may result in
increased level of churn from the impacted customers.
Whilst these are near term difficulties to be addressed in the region, overall the Directors consider that the Group's
ability to offer Fixed Wireless Access, satellite and 5G solutions in the Nordics means that there is potentially
significant scope to expand its presence and reach in this region and create further shareholder value.
Continuing Operations Performance
Net organic customer growth in 2021, was approximately 6k (excluding the 4k loss of customers in the Nordics
following the demounted loss-making sites), resulting in a closing continuing customer base of 59k (FY20 57k).
Total revenue including recurring airtime and other income (equipment sales and installation sales) covering
continuing operations for 12 months shows a solid underlying performance of £27.1m (FY20: £23.4m) with revenue
growth of 15.8%. Revenue in satellite was £21.7m, up on prior year by 26% (FY20: £17.2m) due in the main to
strong customer growth in Australasia. Revenue in fixed wireless was £4.6m, down on prior year by 27% (FY20:
£6.2m) due to the demounting of the loss-making sites which is now complete in the Nordics. Recurring revenue,
defined as revenue generated from the Group’s broadband airtime, which is typically linked to contracts at £25.6m
represented 94% of total revenue (FY20 £21.1m represented 89% of total revenue). Average Revenue Per User
(“ARPU”) increased 7% year on year to £39.30 (FY20: £36.65) due in the main to a higher percentage mix of larger
packages across the regions. Average customer churn reduced fractionally to 21.3% (FY20: 21.7%).
Adjusted EBITDA for the period was £4.6m, showing a solid underlying performance, and representing an adjusted
EBITDA margin of 17% compared to £4.1m in FY20 on a like for like basis and an adjusted EBITDA margin of 17%.
This continues to demonstrate the good progress made in driving the quality of the consumer offering, the margin
review work being undertaken and improving cost efficiencies. Importantly, the Group exceeded both its internal
and market expectations for its revenue, EBITDA and Cash targets for Continuing Operations, despite the Global
challenges posed by COVID-19.
6
Bigblu Broadband plc
Strategic Report
Chief Executive Report (continued)
For the year ended 30 November 2021
Discontinued operations
Quickline
In December 2020, Quickline won the competitive tender to provide significantly improved broadband speeds to
premises across North Yorkshire. This was the fourth tender that Quickline had won under the BDUK Superfast
Programme since August 2020 with the four broadband contracts being valued at around £30m.
Following an approach, the Group sold its majority holding in Quickline Communications (“Quickline”) to global
private markets investment firm Northleaf Capital Partners ("Northleaf") during the period. The Disposal valued
BBB's shareholding in Quickline at up to £48.6 million, representing a return of up to 5.8x the cost of its investment
over a three-year period.
The Group received £31.1 million in cash on completion, with up to a further £10.1 million payable as deferred
contingent consideration that is subject to certain performance conditions being met by no later than 31 March 2022,
or in certain circumstances, 31 May 2022.
In addition, the Group retained an interest in the new holding company structure, including both equity and loan
notes, which was valued at the time of transaction at up to £7.4m.
As disclosed when the Disposal was announced, the deferred contingent consideration is dependent on achieving
certain roll-out and subsidy milestones. Whilst progress is being made in scaling up the organisation in terms of
people and systems, the continued global shortage of microchips affecting the supply of 5G radio equipment means
that the milestones required to deliver the maximum amount due for the deferred contingent consideration are
unlikely to be met in full, partially reducing the amount payable. The Board continues to work closely with Quickline
to maximise the deferred contingent consideration payable to the Group.
Accelerating Technology Evolution
Products
Our fixed wireless business in the Nordics has benefited from significant advances in technology, improving speeds
and throughput by the recent investment made by the Group through an upgrading program which is now complete.
In addition, the Nordics have entered the 5G market through an agreement with Telenor allowing the Group to
promote a ‘white-label’ offering of self-install wireless broadband, which is a niche product and, although it has run
approximately six months behind schedule, will allow the Group to target a far wider customer audience across
Norway. Thanks to our partnerships on Satellite broadband access, we have also been able to stabilise our customer
base allowing us to now have a good foundation for the launch of the next generation satellites over the next years.
Across Australasia, SkyMesh expects to be able to offer a fibre like service via Satellite from the sky, with 100 Mbps
download speeds, <70 milli-second latency and unlimited data allowances across its key territories over the next
couple of years with the launch of significant new satellite capacity. With the acquisition of Clear Networks there will
also be an increased focus on the business market and expansion into the fixed wireless market with a view to
combining satellite and fixed wireless technologies to offer high quality services to both the residential and business
sectors in regional and remote areas.
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 customer testimonial videos. Most important of all is word of mouth or
customer referral, hence the importance of looking after our existing customers as clearly demonstrated in our
Australasian business.
7
Bigblu Broadband plc
Strategic Report
Chief Executive Report (continued)
For the year ended 30 November 2021
We remain focused on helping governments in our current markets to achieve their targets of delivering ultrafast
and gigabit capable broadband connections nationwide. We remain convinced that it will be difficult for governments
to meet these challenging targets without the use of alternative technologies such as fixed wireless and satellite
broadband. Indeed, many governments have already launched ‘intervention schemes’. These are aimed at
stimulating the market and educating consumers about the options available to them - given that fixed fibre
broadband to the premises is unlikely to become a reality for many customers.
In Australia, SkyMesh commanded a 50% market share of net new adds under the Government funded NBNCo
scheme during the last financial year. This performance has continued into Q1 FY22.
Post Balance Sheet Events
We highlight the following post balance sheet events:
SkyMesh, Australia
The Company completed the acquisition of customers and certain business assets from Clear Networks (Pty) Ltd
("Clear") in January 2022. Clear is an Australian ISP based in Melbourne offering a suite of NBNCo broadband
products, as well as a private fixed wireless network serving primarily the greater Melbourne area. This acquisition
has helped the company strengthen its presence in this area as SkyMesh looks to grow its presence across
Australia. Clear has 2.2k customers (3k connections) which were acquire for an initial purchase price of AUS$2.4m
(£1.3m) with a further maximum earn out potential of up to AUS$0.5m (£0.3m). The earn out based on the total
contract value of the sales pipeline delivered in the 12 months post completion.
Current Trading
The Group has positioned itself at the forefront of the alternative super-fast and ultrafast broadband industry in its
chosen markets. The Group’s product portfolio and expanding routes to market mean that it remains one of the
largest and most recognised companies in the geographies where we are present.
During the current year to date, the Group has continued to show year on year growth while still benefiting from the
strong visibility afforded by the high percentage of recurring revenues. Our Australasian operations are
demonstrating robust year on year performance. As noted above, our Nordics business still has a number of
headwinds to overcome including the cyber event on one of our Satellite network providers into the Nordic region
which is impacting c.3k customers but with the new Management team in Norway we remain positive for the region.
We believe we will continue to deliver Group year on year growth.
In the current environment, we continue to monitor potential impacts on the business of COVID-19, in which we
continue to support staff and customers during these difficult times. We develop products and solutions with our
network partners that will enable customers to operate as effectively as possible, particularly at a time where
increasing numbers of customers are likely to be working from home, whether full time or part time.
The Board believes that the Group has, in its Continuing Operations, valuable assets that have established a
meaningful market position in each of their respective territories and the Board therefore believes that it is well
positioned to ensure it can continue to focus on maximising and delivering enhanced shareholder value.
Andrew Walwyn
CEO
21 March 2022
8
Bigblu Broadband plc
Strategic Report
Financial Review
For the year ended 30 November 2021
2021 was another significant year for the Group having exceeded both its internal and market expectations for its
Revenue, EBITDA and Cash targets for Continuing Operations, despite the Global challenges posed by COVID-19.
In addition, the Group repaid all bank debt (£8.4m) and returned £26.1m to shareholders by way of a bonus issue
of a new class of B shares, which the Company redeemed for cash in order to return 45 pence per Ordinary Share
to Shareholders.
The focus of the Board now turns to creating additional shareholder value from the Continuing operations being our
Australian operations (SkyMesh Pty Limited) and, our Nordics business (Bigblu Norge AS) (together, the "Continuing
Group"). In addition, the Company also continues to hold a minority interest in Quickline following its disposal to
Northleaf.
The disposal of the Group’s majority holding in Quickline to Northleaf, was agreed in April 2021 and completed in
June 2021 after Shareholder approval. Northleaf are a global private markets investment firm with US$18 billion in
private equity, private credit and infrastructure commitments under management. The consideration due to the
Company following the Disposal was total cash of up to £41.2m of which £31.1m was paid on completion, with a
further maximum £10.1m deferred contingent consideration that is subject to certain performance conditions being
met by 31 March 2022, or in certain circumstances, 31 May 2022; and £5.6m being satisfied in shares (£2.2m) and
Loan Notes (£3.4m at an interest rate of 4.5% pa) that were issued to the Group on completion and an additional
award of Loan Notes (with an option to convert partially into equity) of up to £1.8m subject to the conditions of the
deferred contingent consideration also being met.
At the time of the announcement of the Disposal, the Board of the Company made it clear that it would explore
means of returning any surplus cash to shareholders within BBB's current financial year. Following completion of
the Disposal, and receipt of the initial cash consideration, the Company had outstanding gross debt of £8.4m and
gross cash of approximately £41m.
After due and careful consideration of the investment requirements, and opportunities, of the Group, the Board
announced the return of £26.1m in aggregate to Shareholders and chose to implement this as a return of capital
through a bonus issue of a new class of B shares, which the Company redeemed for cash in order to return 45
pence per Ordinary Share to Shareholders. This transaction return of value was completed in October 2021 following
shareholder approval. In addition, the Company repaid the balance of all outstanding debt (£8.4m) and secured a
new facility with its bank Santander, of £5m. As at 30 November 2021, this facility remained undrawn.
Given the strength of the balance sheet, the Board remains focused on delivering further increases in shareholder
value from its Continuing Operations through organic growth, with the view of possible acquisitions in the territories
we operate in. The financial review will therefore focus primarily on the performance of the Continuing Operations.
Financial Review
Total like-for-like results - Including Continuing and Discontinued Operations
Total revenue including recurring airtime and other income (equipment sales and installation sales) covering
continuing operations for 12 months and discontinued operations to the date of disposal, was £30.3m (FY20:
£27.2m).
Adjusted EBITDA covering continuing operations for 12 months and discontinued operations to the date of
disposal was £5.3m (FY20: £4.6m), representing an adjusted EBITDA margin of 16.9% (FY20: 23.0%).
9
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Depreciation, excluding ‘right of use assets’, decreased to £2.7m in FY21 from £5.6m in FY20 in line with the reduced
scale of the continuing operations but reflecting increased investment in the Nordic region.
Amortisation reduced to £21k in FY21 from £1.6m in FY20 and related to the assets of the discontinued operations.
FY20 included an impairment charge of £0.2m for our investment in JHCS which was fully integrated into the books
and operations of Quickline.
Finance costs were £0.9m in FY21 (down £6.2m on FY20 (FY20: £7.1m), with £0.3m (FY20: £1.1m) relating to the
revolving credit facility (RCF), £0.5m relating to the costs associated with the settlement of the £8.4m (being the
write off of capitalised debt raise costs £0.5m on the original £30m RCF) debt repayment and £0.1m for lease
interest (£0.1m related to the discontinued business). This reduction from FY20 was due to the repayment of the
Company’s BGF redemption premium (£5.5m) following the refinancing.
Financial Review - Continuing Operations
Key Performance Indicators for Continuing Operations
The Group utilises a number of Key Performance Indicators (‘KPI’s’) to measure performance against our strategy.
A description of these KPI’s and performance against them for continuing operations is set out below.
KPI
2021
2020
Description
2021 performance
Customer Base
58,832
Underlying
Customer Net
Organic
Connections
Gross
Underlying
Churn
6,024
21.3%
6,161
57,215 Represents total gross organic connections
plus acquisitions, less disposals, less lost
customers (churn) and base management,
including demounting
Represents gross organic connections in the
period less lost customers (churn) in the
period. Excludes exceptional churn of 4.4k
customers associated with the demounting
program in Norway
Gross underlying churn defined as the number
of subscribers who discontinue their service
as a percentage of the average total number
of subscribers within the period and excludes
exceptional churn in association with the
demounting program in Norway
21.7%
ARPU
£39.30
£36.65 Calculated by dividing total revenues from all
sources by the average customer base
Revenue
£27.1m
£23.4m
for
like
revenue
treat
“LFL”
Like
acquired/disposed businesses as if they were
owned for the same period across both the
current and prior year and adjusts for constant
currency and changes in the commercials of
the PPP contract and accounting treatment for
Grants.
10
4.4% increase
Connections
Australia and c.2k Norway
split
c.4k
Norway
Slight decline in underlying
churn. Underlying churn
rate of 28.6% in Australia
and 15.2% in Norway (39%
Including
in
demounting churn). Net
churn
(incl Norwegian
demounting was 28.1%
versus 21.7% in FY20)
Higher by 7.2% due
to
improved product mix and
increased
recurring
revenues up 5% to 94%
Total Revenue increased by
15.8%. LFL revenues
in
2020 were £23.4m, after
£0.1m
currency
movements, resulting in a
15.3%
LFL
revenues of £3.5m on a
constant currency basis.
increase
of
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
KPI
2021
2020
Description
2021 performance
Adjusted
EBITDA
£4.6m
£4.1m
£5.2m
(£0.4m)
£2.1m
(£2.6m)
Adjusted
Operating Cash
Flow –
Continuing
Operations
Adjusted Free
Cash Flow –
Continuing
Operations
Basic EPS
46.9p
16.8p
Adjusted EPS
4.3p
1.9p
performance.
Earnings before share based
payments, depreciation, intangible
impairment costs,
amortisation,
one-off
costs,
acquisition
employee
related costs, deal
related costs and start-up costs is
the Group’s
the measure of
It
operating
evaluates performance without
factoring in financing decisions,
tax
accounting decisions or
for
environments or provisions
potential legal costs, share based
payments, acquisition costs and
fund-raising fees.
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.
Cash (used)/generated by the
Group after investment in capital
expenditure and servicing debt.
Basic Earnings per share (EPS) is
the portion of the Continued and
discontinued business’s profit
(£27.0m) divided by the weighted
average number of shares.
Adjusted Earnings per share
(EPS) is the Continuing
business's profit after tax (£2.5m)
before exceptional costs divided
by the weighted average number
of shares.
LFL EBITDA increase of 11.1%
driven by organic
revenue
growth. EBITDA Margin % held
constant at c 17% despite
increased marketing spend of
£0.4m
Adjusted Operating cash inflow
due to increased EBITDA, and
improvement in Working capital
Adjusted Free Cash Flow
improved in year following
improvements in EBITDA and
working capital. There was
capital expenditure in the year
of £2.2m to support the
upgrading projects in Norway
Reflects gain on disposal of
majority interest in Quickline to
Northleaf, together with
improved underlying trading
Improved due to underlying
trading performance and lower
underlying interest and
taxation
11
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Total customers at the period end including in flight customers for continuing operations were 59k (FY20: 57k).
During the year we delivered underlying 6k net adds (FY20: 6k) This is summarised as follows:
Organic
Opening base
Inflight customers
Gross Adds
Churn
Underlying Net Growth
Exceptional churn
Closing Base
FY21
000
57.2
1.3
19.1
(14.4)
6.0
(4.4)
58.8
FY20
000
51.1
1.0
18.0
Comments
30.0% increase
6.1% increase
(12.9)
11.6% increase
6.1
0.0
57.2
Underlying 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) decreased to an average annualised churn rate of 21.3% in
FY21 (FY20: 21.7%), before exceptional churn of 4.4k.
In our Nordics business underlying churn was 15.2% (39% including exceptional demounted customers). (FY20:
34.8%).
In our Australian business underlying churn was 28.6% (FY20: 20.3%) due to a number of technical challenges on
the Skymuster plus product which we are working with NBNCo on resolving.
In the first three months of FY22, underlying churn has reduced, and importantly we are starting to roll out next
generation products in Australia, New Zealand and Norway.
Continuing Operations - Revenue
Total revenue including recurring airtime and other income (equipment sales and installation sales) for continuing
operations for the period increased by £3.7m (16%) to £27.1m (FY20: £23.4m). Total revenue on a like-for-like
constant currency basis increased in the year by 15.3%, (FY20: increase 4.3%) as the Group continued to add
customers during the year with higher ARPU.
ARPU, calculated by dividing total revenues from all sources by the average customer base, in 2021 was £39.30
per month (FY20: £36.65) due to higher revenues, specific to the Skymuster Plus products in Australia.
Revenue in the period from satellite was £21.7m (FY20: £17.2m) which reflected continued strong organic growth
in our Australian business, and revenue from fixed wireless reduced to £4.6m (FY20: £6.2m), due to the known
challenges faced in the period by our Nordics fixed wireless businesses including the demounting of loss-making
mast infrastructure.
Recurring revenue, defined as revenue generated from the Group’s broadband airtime, which is typically linked to
contracts and monthly subscriptions, was £25.6m in the period, representing 94% of total continuing revenue
(FY20 £21.1m representing 89% of total revenue).
12
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Continuing Operations - Margins and profitability
Gross profit margins remained materially in line with previous year at c.45%. (FY20: c.46%)
Distribution and Administrative Expenses, pre-exceptional costs, increased to £9.2m (FY20: £8.4m) due to
increased headcount costs and marketing costs. Post items identified as exceptional in nature, these expenses
increased to £13.1m (FY20: £8.6m) representing 48.2% of revenue (FY20: 36.5%) due to specific deal related and
operational exceptional costs.
Adjusted EBITDA increased 11% for the period at £4.6m representing an adjusted EBITDA margin of c17%
compared to £4.1m in FY20 and an adjusted EBITDA margin of c17%.
Continuing Operations analysis
A reconciliation of the adjusted EBITDA to adjusted PAT of £2.5m (FY20: £1.1m profit) is shown below:
Adjusted EBITDA
Depreciation
Amortisation
Adjusted EBIT
Share based payments
Continuing Operations operating profit – pre-
exceptional items
Exceptional items relating to M&A and restructuring
activities
Continuing Operations Statutory operating (loss) /
profit – post exceptional items
Adjusted EBIT
Underlying interest
Tax credit / (charge)
Adjusted PAT
1
2
3
4
5
6
2021
£000
4,577
(1,390)
-
3,187
(163)
3,024
2020
£000
4,126
(1,335)
(18)
2,773
(332)
2,441
(3,922)
(158)
(898)
3,187
(798)
76
2,465
2,283
2,773
(1,397)
(262)
1,114
Group Statutory Results and EBITDA Reconciliation
1. Adjusted EBITDA (before share based payments, depreciation, intangible amortisation, impairment of
goodwill, refinancing, fundraising, acquisition, employee related costs, deal related costs and start-up
costs) improved 11% to £4.6m (FY20: £4.1m).
2. Depreciation increased to £1.4m in FY21 from £1.3m in FY20 due to the capitalisation of the upgrading
project in Norway (£1.9m) and IT systems setup in Australia (£0.2m)
13
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
3. Underlying amortisation reduced to Nil from £18k in FY20 as a result of historic acquisitions being fully
written down. During the year we undertook a full review of carrying value of Goodwill, with the review
resulting in no requirement for an impairment.
4. The Group incurred expenses in the period, that are considered exceptional in nature and therefore
appropriate to identify. These comprise:
a. £2.0m (FY20: £0.3m) of acquisition, deal, legal and other costs relating to M&A and restructuring
activities during the period. These costs comprise mainly professional and legal fees.
b. £0.4m (FY20: £0.1m credit release of overprovision) employee restructuring costs primarily in the
Nordics.
c. £0.6m (FY20: £nil) associated with the cost of the demounting program in Norway
d. £0.8m costs related to the return of capital to shareholders
e. £0.1m setup costs for the New Zealand operations
5. The interest charge in the year related to the RCF facility with Santander (£0.7m) and lease liabilities
(£0.1m). In FY22 we expect the interest charge to be materially lower on the existing facility.
6. The tax credit relates to our Australia business SkyMesh charge of £0.2m, and a deferred tax adjustment in
our Norwegian business BB Norge of £0.3m
Customers Connections, Revenue, Adjusted EBITDA in FY21 and the comparative period for continuing operations
is segmented by the following categories as follows:
Customer Connections
Revenue
2021
£m
2020 Ch
£m %
%
Adjusted EBITDA
2021 2020 Ch
£m %
£m
2021
Number
000’s
Australia
Norway
Pre-Central
Central Revenue and
Costs1
49.7
9.1
58.8
-
%
84%
16%
100%
2020
Number
000’s
46.0
11.2
57.2
-
80%
20%
100%
21.8
4.6
26.4
16.6
31%
6.3 (27%)
22.9 15%
4.0
1.9
5.9
43%
2.8
2.9 (34%)
4%
5.7
0.7
0.5
40%
(1.3)
(1.6)
(19%)
Total
4.1 11%
1 Central revenue includes recharges for post-sale services and central costs include finance, IT, HR and plc costs.
23.4 16%
100%
100%
57.2
27.1
58.8
4.6
14
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Customer Connections by Technology
2021
Satellite
000’s
2021
Fixed
Wireless
000’s
Australia
Norway
42.4
1.6
7.3
7.5
2021
Total
000’s
49.7
9.1
%
84%
16%
2020
Satellite
000’s
2020
Fixed
Wireless
000’s
2020
Total
000’s %
40.1
2.3
5.9
8.9
46.0
11.2
80%
20%
Total
44.0
14.8
58.8
100%
42.4
14.8
57.2
100%
From the above analysis for Continuing Operations year on year movements from a Customer Base, Revenue,
Adjusted EBITDA and product mix perspective are analysed as follows:
1 Australasia
a. Strong organic customer net growth of 3.7k (Underlying 4.0k before exceptional churn of 0.3k due
to product issues with the Skymuster Plus impacting churn) over the course of the year
b. The increase in revenue of £5.2m was a result of the continued organic growth in customer numbers
and an improved APRU
Importantly, EBITDA improved by 43% following continued cost efficiencies across the company.
c.
2 Norway
a. Net underlying customers growth was 2.0k before exceptional churn of 4.1k customers associated
with the demounting and cancellation of loss-making masts and contracts.
b. Consequently, revenue in the year reduced £1.7m due to the loss of these customers.
c. Notwithstanding the above, adjusted EBITDA reduced by only £1.0m in the year due to strict
overhead cost controls implemented during the year.
3 PLC
a. Revenue was 40% higher at £0.7m due to the support services
b. With lower costs this resulted in EBITDA losses improving by 19% at £1.3m.
15
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Cashflow performance – Continuing Operations
Adjusted Free Cash Flow in the year before exceptional items and M&A activities undertaken by the Group was an
inflow of £2.1m (FY20: outflow £2.6m). This reflects improved EBITDA and working capital management offsetting
increased capital investment.
The underlying cash flow performance analysis seeks to clearly identify underlying cash generation within the
Continuing Group, and separately identify the cash impact of identified exceptional items including refinancing,
fundraising M&A activity cash costs and is presented as follows:
Adjusted EBITDA
Release of Grant
Underlying movement of working capital
Forex and other non-cash items
Adjusted operating cash inflow/(outflow) before
interest, tax Capex and exceptional items
Tax and interest paid
Purchase of Assets
1
2
3
4
5
6
Adjusted free cash inflow/(outflow) before exceptional
and M&A items
Exceptional items relating to refinancing, fundraising, M&A,
integration and the establishment of network partnerships
7
Free cash inflow/(outflow) after exceptional and M&A
items
2021
£000
4,577
-
1,742
(1,085)
5,234
(906)
(2,208)
2,120
2020
£000
4,126
(144)
(3,227)
(1,111)
(356)
(1,262)
(954)
(2,572)
(3,922)
(156)
(1,802)
(2,728)
Investing activities
Movement in cash from discontinued operations
8
9
31,041
37,222
(2,209)
(2,029)
Movement in working capital from discontinued operations
10
(2,339)
(3,885)
Financing activities
(Decrease) / Increase in cash balances
11
(34,796)
(10,105)
(19,263)
9,317
16
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
1) Release of deferred grant income to revenue in the year £nil (FY20: £0.1m)
2) Underlying movement in working capital was an inflow of £1.7m (FY20: outflow £3.2m). Working capital
benefitted from increased creditor terms and deferred payment of creditors whose invoices received just
prior to the year end.
3) Forex and non-cash inflow of £1.1m (FY20: Outflow £1.1m) relate to the exchange movement in the
Condensed consolidated statement of comprehensive income and the Condensed consolidated statement
of financial position, as well as costs/income where there is no impact on operating cashflow.
4) This resulted in an adjusted operating cash flow before Interest, Tax, Capital expenditure and Exceptional
items of £5.2m inflow (FY20: £0.4m outflow), and an adjusted operating cash flow to EBITDA conversion of
114% (FY20: negative 5%).
5) Tax and interest paid was £0.9m (FY20: £1.3m) on a like-for-like basis. This covers interest on the RCF
facility (£0.4m) and monthly taxation paid by our Australian business (£0.5m). Final corporation tax
calculations for the financial year show year on year tax savings in excess of £0.8m with a refund of £0.2m
due on the tax paid in the year following substantial investment.
6) Purchases of assets in FY21 were £2.2m. These purchases included the fixed wireless investment in
Norway of £1.6m, installations and IT costs of £0.5m and other £0.1m
7) Exceptional items relating to M&A and restructuring costs of £3.9m as disclosed on pages 13 and 14 (FY20:
£0.2m)
8) Sale proceeds from the disposal of subsidiaries were £31.1m cash (excluding consideration satisfied by
equity investments) less the purchase of intangibles (£0.1m), compared to £37.2m in FY20.
9) Relates to cash of £2.2m (FY20: £2.0m) retained by the disposed entities in the year
10) Represents the movement in the Group’s working capital due to the deconsolidation of the disposed
businesses.
11) In FY21 the major financing activities included the return of capital to shareholders of £26.1m outflow, the
repayment of the Santander RCF facility £8.4m together with £0.8m lease principal payments, offset by the
issuance of shares from the exercise of options generating an inflow of £0.4m. For FY20 the outflow of
£19.3m comprised the:
- draw down of £29.4m from the RCF with Santander relating to a refinancing of external debt, to repay the
HSBC plc RCF (£8.25m) and BGF Loan Notes (£12.0m). A further £21m was repaid to Santander after
disposal of the subsidiaries.
- £2.0m, net, was received from further investment by the non-controlling interests of Quickline.
- The principal element of lease payments was an outflow of £1.4m
- The payment of the BGF redemption premium was an outflow of £5.5m
- The payment of the BGF penalty interest was an outflow of £1.2m
17
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Net debt to net cash reconciliation
Opening Net Cash / (Debt)
Loss after tax from Continuing operations
Interest charge
Depreciation
Amortisation
Tax (credit) / charge
Share Based payments
Exceptional costs
Adjusted EBITDA
Release of Grants
Forex movement and other non-cash
Movement in Working Capital
Cash inflow/(outflow) from Continuing operations
Interest paid
Tax paid
Underlying inflow/(outflow) from Continuing operations
2021
£000
7,419
(1,620)
798
1,390
-
(76)
163
3,922
4,577
-
(1,085)
1,742
5,234
(411)
(495)
4,328
2020
£000
(14,198)
(4,213)
6,835
1,335
18
262
332
157
4,126
(144)
(1,111)
(3,227)
(356)
(1,186)
(76)
(1,618)
Purchase of Assets
(2,208)
(954)
Adjusted inflow/(outflow) Continuing operations Free Cash Flow
2,120
(2,572)
Exceptional items relating to refinancing, fundraising, M&A,
integration and the establishment of network partnerships
Adjusted free cash inflow/(outflow) after exceptional and M&A
items
Investment activities (Pre cash used and retained by Discontinued
operations)
Movement in working capital from discontinued operations
Financing activities
Movement in Cash from Continuing operations
(Outflow) / Inflow in cash from Discontinued operations
Movement in Net Cash
Decrease in Debt
Closing Net Cash
18
(3,922)
(156)
(1,802)
(2,728)
31,041
37,222
(2,339)
(34,796)
(7,896)
(2,209)
(10,105)
7,887
5,201
(3,885)
(19,263)
11,346
(2,029)
9,317
12,300
7,419
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Cash and net debt for the overall Group is further analysed as follows:
Opening Net Cash / (Debt)
(Increase) / decrease in loans: offset in financing activities
Facilities Received
Facilities Repaid
Cash inflow/(outflow) from operating activities
Cash generated/(used) in investing activities
Cash (outflow) used from financing activities
Movement in Net Cash
Closing Net Cash
Composition of closing net debt
Net cash and cash equivalents
Bank loans
Other loans
Net Cash
Net Cash
Net cash and cash equivalents
Discontinued operations cash
Adjusted net cash
2021
£000
7,419
-
7,887
(1,640)
22,591
(31,056)
(2,218)
5,201
5,201
-
-
5,201
5,201
-
5,201
2020
£000
(14,198)
(29,400)
41,700
(5,670)
26,646
(11,659)
21,617
7,419
15,306
(7,877)
(10)
7,419
7,419
(2,209)
5,210
Adjusted Net Cash (Debt) / Adjusted EBITDA
Adjusted Net Cash (Debt) inc IFRS16 / Adjusted EBITDA
1.13x
0.82x
1.26x
0.59x
Net cash reduced from £7.4m in FY20 to a net cash position of £5.2m, a reduction of £2.2m in the year, as detailed
in the net cash/(debt) reconciliation above and after the repayment of the debt (£8.4m) and the return of Capital
(£26.1m)
The table above excludes the lease liabilities of £1.4m (FY20: £2.7m). Including this amount would give a total
adjusted net cash of £3.8m (FY20: Adjusted net cash £2.5m) and a ratio of adjusted net cash to adjusted Group
EBITDA before IFRS 16 of 0.82x (FY20: Adjusted net cash 0.59x).
Consolidated Statement of Financial Position
There was a step change in the balance sheet following
-
The performance in the year with increased Revenue (£27.1m) and EBITDA (£4.6m)
19
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
-
-
The disposal of the Group's UK fixed wireless operations to Northleaf for an initial consideration of £31.1m
and the removal of the non-controlling interest
The return of capital (£26.1m) and the repayment of the debt with Santander (£8.4m)
Fixed Assets reduced in the year to £4.1m (FY20: £10.9m), following the sale of assets within the discontinued
business (£6,9m net of purchases) and the purchase of new fixed assets (£2.2m), less disposals (£0.6m), and
adjusted for depreciation provided in the year (£1.4m) and foreign exchange movements (£0.1m).
Intangible Assets decreased to £5.6m (FY20: £12.0m) following the sale of the discontinued business and
underlying amortisation of Nil in FY21 (FY20: £0.1m). Following a review in FY21 there was no requirement for an
impairment of the carrying value of the Company’s goodwill.
Goodwill and Amortisation
Underlying Amortisation
Reported Amortisation
Working Capital
FY21
£000
-
-
FY20
£000
18
18
Inventory days increased to 13 days (FY20: 11 days) as we purposefully increased stock holdings in Norway to
support the “Whitelabel” offering from December 2021 given global shortages which has continued into FY22. This
accounted for 4 days
Debtor days decreased to 7 days (FY20: 11 days) following improved collections
Creditor days increased to 81 days (FY20: 73 days) due to agreed revised extended payment terms with suppliers
where setting up new operations.
Earnings per share
As a result of the material exceptional profit, and non-underlying costs in the year as detailed above, the Group
delivered a basic profit per share of 46.9p (2020: basic profit per share of 16.8p) and fully diluted profit per share of
46.4p (2020: fully diluted profit per share of 16.6p). Adjusted earnings per share (before exceptional items) was a
profit per a share of 4.3p (2020: profit per share of 1.9p).
Basic earnings per share
Diluted earnings per share
Basic adjusted earnings per share
Basic EPS and Statutory EPS
2021
46.9p
45.6p
4.3p
2020
16.8p
16.6p
1.9p
Basic EPS improved to a profit of 46.9p per share in FY21 from a profit of 16.8p in FY20, largely due to the sale of
the discontinued businesses in FY20 and FY21.
20
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Diluted EPS
Diluted EPS is a calculation used to gauge the quality of a company's earnings per share (EPS) if all share options
are exercised. Diluted EPS improved to a profit of 45.6p per share in FY21 from a profit of 16.6p in FY20
Basic adjusted earnings per share
Basic EPS improved to a profit of 4.3p per share in FY21 from a profit of 1.9p in FY20, largely due to the improved
performance of the Continuing businesses.
Streamlined Energy and Carbon Reporting
Large UK companies are required to report their levels of greenhouse gases (GHG) emissions in their annual report
and accounts. This obligation is for Scope 1 (direct) and Scope 2 (indirect) emissions, only to the extent that
emissions are the responsibility of the Company. Direct emissions originate from combustion of natural gas and fleet
vehicles, whilst indirect emissions are based on purchased electricity. Scope 3 emissions are included below only
to the extent that the Company is responsible for purchasing the fuel.
Emissions are calculated following the UK Government GHG Conversion Factors for Group Reporting 2020 and UK
Government Environmental Reporting Guidelines. Emissions are based on the Group’s UK sales and operations.
An intensity ratio of carbon dioxide equivalent (CO2e) per £1m of revenue has been selected which will allow a
comparison of performance over the time and with other similar types of businesses. The data below represents the
GHG emissions from the UK disposal Quickline for the period up to the 10 June 2021 and shows a 36% reduction
in the selected intensity rate compared to the previous year. Continuing UK operations comprising only central and
head office functions emit less than 40MWh and are regarded as a low energy user. Accordingly, no emission or
energy consumption figures for the Company are included in the following table.
Source of Emissions
Direct Emissions – Scope 1 – Gas and Vehicle fleet
Indirect Emissions – Scope 2 – Electricity
Indirect emissions – Scope 3 – Employee cars
Gross Emissions
Turnover – UK discontinued operations £m
Tonnes CO2e per £1m of revenue
Energy consumption used to calculate emissions – MWh
2021
Tonnes
CO2e
2020
Tonnes
CO2e
113
3
-
116
3.2
35.6
846
193
10
5
208
3.7
55.6
469
We are currently reviewing ways to address the emissions which are typically higher in the initial stages of
infrastructure build but reduced significantly once completed.
Accounting standards
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS), as endorsed and adopted for use in the EU. There have been no changes to IFRS standards this year that
have a material impact on the Group’s results. No forthcoming new IFRS standards are expected to have a material
impact on the financial statements of the Group.
21
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
Dividend
The directors do not recommend the payment of a dividend (2020: £Nil)
Going concern
The Directors have prepared and reviewed projected cash flows for the Group, reflecting its current level of activity
and anticipated future plan for the next 12 months, from the date of signing, and post the disposal of the UK Fixed
Wireless business in June 2021. The Group is currently loss-making, before the gain on the sale of the discontinued
business, mainly as a result of amortisation and exceptional charges. The business continues to grow customer
numbers and revenue in key target markets and continues to monitor the short-term business model of the Group.
The Board have identified the key risks and these include
•
Slower revenue growth, EBITDA and cash generation if sales activities, installations or activations decrease
over the period
Reduced ARPU if market pressures result in discounting customer products to support them
Increased churn could be experienced if services levels are not as expected due to volumes of traffic,
personnel shortages and capacity constraints
Increased bad debt as customers suffer income loss
Increased CAPEX costs to support growth targets or shipping delays
•
•
•
•
The Board also recognises a number of significant mitigating factors that could protect the future going concern of
the business. These include:
•
The COVID-19 situation has resulted in a significant increase in demand for our products as the global
workforces move more to flexi home working
Super-fast Broadband is already an essential utility for many and even more so now, it is likely to be one of
the last services that customers will stop paying for
Increased self-install / tripods to offset any installation delays
Reduced CAPEX / discretionary spend
Support from Network Partners for the business and customers
Strong support from banking partners
•
•
•
•
•
The Board has conducted stress tests against our business performance metrics to ensure that we can manage any
continuing risks that COVID-19 may continue to present over the year. We recognise that a number of our business
activities could be impacted, and we have reflected these in this analysis including supply chain disruptions, delays
in sales or installations, earnings, or cash generation. By modelling sensitivities in specific KPIs such as volume of
activations, churn, ARPU, margin, overhead and FOREX, management is satisfied that it can manage these risks
over the going concern period.
Furthermore, management has in place and continues to develop robust plans to protect EBITDA and cash during
this period of uncertainty and disruption. Under this plan identified items include reducing discretionary spend,
postponing discretionary Capex, reducing marketing, freezing all headcount increases, working with suppliers on
terms particularly our network partners and ultimately seeking relief, as appropriate, from the various forms of
Government support being put into place.
22
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2021
As a consequence, despite the risks to businesses still associated with the COVID-19 pandemic, the Board believes
that the Group is well placed to manage its business risks and longer-term strategic objectives, successfully. The
latest management information shows a strong net cash position, and in terms of volumes, ARPU and churn, we
are in fact showing a strong position compared to prior year and budget and indeed the business is seeing a
significant increase in demand across all main territories as a result of government’s response to COVID-19 resulting
in the remote working of individuals across our key territories. Accordingly, we continue to adopt the going concern
basis in preparing these results.
On behalf of the Board
Frank Waters
Chief Financial Officer
21 March 2022
23
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties
For the year ended 30 November 2021
The Board and management regularly review and monitor the key risks involved in running and operating the
business. The future success of the Group is dependent on the Board’s ability to implement its strategy. The model
for the future development of the Group is reliant on its ability to achieve a critical mass of customers either through
organic Satellite Customers growth, building infrastructure for Fixed Wireless and 5G Customers, and its ability to
derive revenue from these customers by providing excellent technical support, a value-added customer service,
solution delivery and operational gearing. The table below sets out a number of the material risks together with
relevant mitigating factors, with the risk rating explained on page 28.
Risk
Description
Mitigation
Risk
Rating
Medium 6
The Board is in regular dialogue with
network providers to ensure appropriate
capacity exists in Australasia and Nordics
at an affordable price. New satellites and
capacity changes from time to time, so it
is vital the relationship with the satellite
owners, both in Australasia and the
Nordics, continues to prosper.
The Board work closely with satellite
owners, as partners, to develop short,
medium and longer-term sales plans,
target opportunities and markets. This
close working relationship ensures that
our activities are goal congruent with our
service providers and our value add to
their business is well understood.
Service
level agreements exist with
satellite operators whose satellites are
used with mission critical businesses.
Newer satellites can steer beams.
Medium 9
Dependence
on satellite
owners and
satellite
infrastructure
for capacity
and key
contract terms
The Group is dependent on its ability
to purchase broadband capacity from
satellite owners in Australasia and the
terms upon which
Nordics. The
satellite owners sell such capacity
may change to the Group’s detriment
and the Group may not be able to
secure capacity from the satellite
owners with which it currently deals.
The Group’s current contractual
agreements with the satellite owners
typically non-exclusive, are
are
terminable immediately or within a
short timeframe of giving notice, do
restrictive covenants
not contain
the satellite
which would prevent
owners from directly competing with
the Group and do not contain express
provisions obliging them to continue
providing services to the Group, its
and
governments
consequently
its
its
operational results and its prospects.
In the event of the failure of a satellite,
the Group may not be able supply
broadband access to parts of its
customer base, which would have an
adverse
the Group’s
relationship with its customers and its
revenues, its operational results, and
its prospects.
impact on
revenues,
partners
Dependence
on satellite
infrastructure
24
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2021
Risk
Description
Mitigation
Acquisitions
The Group believes there is an
opportunity to continue acquisition of
customers by way of accretive bolt-
ons in existing markets.
in
the
The Group
to conduct
intends
appropriate due diligence in respect
of acquisition targets and to identify
any material issues that may affect
the decision to proceed with the
purchase or give cause for concern
post acquisition
terms of
performance or liabilities identified
subsequent. During
due
diligence process the Group is only
able to rely on the information that is
available to it. That information may
not be accurate or remain accurate
during the due diligence process.
Any of these outcomes may have a
the
material adverse effect on
Group’s
financial
condition, or results of operations.
There may be competition
from
existing and emerging alternative
technologies, such as 4G, 5G, Space
X, fibre to the premises, improved
versions of the wide area radio
network or mesh radio technologies.
In the event that such technologies
become widely
the
Group’s subscriber base, revenues,
results
and
adversely
prospects may
affected.
operations
business,
available,
from
be
Competition from
existing/emerging
alternative
technologies
is mitigated as
Roll up strategies are inherently risky.
This risk
far as
possible by working closely with
teams,
management
existing
professional advisors and network
operators to reduce the risks during
the acquisition stage.
In addition, dedicated resources are
deployed internally to support the due
diligence process and to on-board the
businesses into the Group and further
system
enhance our operating
capabilities to reduce on going risk.
it by
to mitigate
The Board recognises this risk and
seeks
regular
dialogue in the marketplace with other
the
solution providers
Group’s
adjusted
offering
accordingly
the market
to meet
demands and changing landscape
to ensure
is
Risk
Rating
Low 3
Medium 9
Government
policy and
increased
investment in
fibre roll-out
the
Given
importance of digital
connectivity to the economy, it may
be the case that many governments
further invest in fibre roll-out thus
reducing the market size for satellite
and wireless broadband.
announcements
in
Government
Australia
indicate support will be
continue to be provided for satellite
and wireless providers. We remain
confident this will continue within the
jurisdictions in which we operate.
Medium 6
25
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2021
Risk
Description
Mitigation
System reliance
and
sustained
Continued
testing of
the
development and
existing systems
is undertaken
regularly. Enhancements are rolled
out during the course of the year to
reduce risks.
Group
believes
The
the
proprietary technology platform,
Pathfinder, built on Microsoft
technology is a key contributor to
the operational success of the
business as well as the more
localised systems. In the event of
a system failure of the platform or
any other technology or system
operated by a third-party, short-
term operations would be affected
adversely.
Dependence on key
executives
The performance of the Group will
depend heavily on its ability to
retain the services of the Board
and to recruit, motivate and retain
further suitably skilled personnel.
The loss of the services of key
individuals may have an adverse
effect on the business, operations,
customer
and
results.
relationships
is scope
the management
The Board will continue to ensure
that
team are
appropriately incentivised and that
there
to appropriately
incentivise new key personnel
where required. The Group operates
various share option schemes and
management incentive plans which
enables employees to benefit from
continued growth and delivering
shareholder returns. It also ensures
that the management team, staff
and shareholders objectives are
aligned.
Risk
Rating
Medium 8
Medium 9
Fraud, including cyber
attacks
As a provider of broadband
solutions, the Group is a potential
target and products may have
vulnerabilities
be
targeted by attacks specifically
designed to disrupt the Group’s
business and harm its reputation.
that may
technical staff
The Group have
specialist
outside
including
on
who
contractors
investigation and mitigation of risks
related to fraud and cyber-attacks.
focus
Medium 8
it
systems,
If an actual or perceived breach of
security occurs in the Group’s
internal
could
the markets
adversely affect
perception of the Group’s products
or internal control systems. In
addition, a security breach could
affect the Group’s ability to provide
support for customers.
26
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2021
Risk
Description
Mitigation
Risk
Rating
Medium 6
Medium 6
Biannual review undertaken of key risk
areas by consultants as appropriate
The BBB Board and Management has
considered the effects using the best
possible information currently available
and the Government guidance given in
each
Continuing
Operations and has taken precautionary
measures which include the testing and
enforcement of
jurisdiction
of
- Home working, self-isolation
- Integrated telephony systems
- Business continuity
We carefully consider any unique
circumstances and risk exposures in our
business units when analysing how
recent events may affect their financial
reporting. Specifically, as appropriate we
include comments in our reporting and
related financial statement disclosures to
convey material effects of COVID-19.
This continues to be monitored by the
Board with our professional advisors,
satellite and wireless operators and
insurance specialists.
Medium 6
Medium 6
The Group monitors foreign exchange
exposure
regularly and, when a
transactional exposure is not covered
through a natural hedge, consideration
will be given in entering into a hedge
arrangement such as forward contracts
and Options.
Ineffective
Control
environment
COVID-19
and similar
Force
majeure
Foreign
Exchange
Rate
Volatility
The financial performance of the Group
depends on operating within a robust
control framework. The breaching of
this environment would result in loss to
the business as well as
risks
associated with reputation.
Global responses to the coronavirus
disease (COVID-19) continue to rapidly
evolve. COVID-19 has already had a
significant impact on global financial
markets, and it will have implications for
many businesses including BBB.
Some of the key risks that could impact
on the BBB group include, but are not
limited to:
Supply chain disruptions, unavailability
in sales or
of personnel, delays
installations,
cash
earnings,
generation. Delays in planned business
expansions and the launching of new
products.
or
In addition, BBB is aware of the risks
posed by the increasingly broad effects
of COVID-19 because of its negative
impact on the global economy and
major financial markets.
or
damaging
The Group’s operations now or in the
future may be adversely affected by
risks outside its control, including space
destroying
debris
satellites, labour unrest, civil disorder,
war, subversive activities or sabotage,
fires,
floods, explosions or other
catastrophes, epidemics, or quarantine
restrictions.
The geographic spread of the Group
results are
means
financial
affected by movements
foreign
exchange rates, with only 2% of the
revenue currently being
Group’s
generated
risk
presented by currency fluctuations may
affect business forecasting and create
volatility
results and cash
holdings.
in Sterling. The
that
the
in
in
27
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2021
Risk
Description
Mitigation
This continues to be monitored
by
our
the Board with
professional advisors.
General
economic
conditions
Market conditions, particularly
those affecting
telecoms and technology companies may affect
the ultimate value of the Group’s share price,
regardless of operating performance. The Group
could be affected by unforeseen events outside its
control, including, natural disaster, terrorist attacks
and political unrest and government legislation or
telecoms and
policy. Market perception of
technology companies may change which could
impact on the value of investors’ holdings and
impact on the ability of the Group to raise further
funds. General economic conditions may affect
exchange rates, interest rates and inflation rates.
Risk
Rating
Medium 9
Likelihood
1.
Improbable (unlikely to occur)
2. Remote (unlikely, though possible)
3. Occasional (likely to occur occasionally during standard operations)
4. Probable (not surprised, will occur in a given time)
5. Frequent (likely to occur, to be expected)
Severity
1. Negligible (the risk will not result in serious corporate disruption, or has a remote possibility of loss)
2. Marginal (the risk could cause corporate disruption, or loss but its effects would not be serious)
3. Moderate (the risk can result in corporate disruption or loss)
4. Critical (the risk can result in corporate disruption or loss)
5. Catastrophic (the risk is capable of causing serious corporate disruption and or loss)
28
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2021
Corporate Responsibility
BBB is committed to being an equal opportunities employer and is focused on hiring and developing talented people.
The health and safety of our employees, and other individuals impacted by our business, is taken very seriously,
and is reviewed by the Board on an ongoing basis. A Company statement regarding the Modern Slavery Act 2015
is available on the Company’s website at www.bbb-plc.com. As a manufacturer and distribution business, there is
a risk that some of the Group’s activities could have an adverse impact on the local environment. Policies are in
place to mitigate these risks, and all of the businesses within the Group are committed to full compliance with all
relevant health and safety and environmental regulations.
The Strategic Report was approved by the Board of Directors on 21 March 2022 and was signed on its behalf by:
Andrew Walwyn
Chief Executive Officer
21 March 2022
29
Bigblu Broadband plc
Strategic Report
Section 172 (1) Statement
For the year ended 30 November 2021
In accordance with section 172 of the Companies Act 2006 each of our directors acts in the way that they consider,
in good faith, would most likely promote the success of the Group for the benefit of its members as a whole.
consequences of any decisions in the longer-term
• interests of our colleagues
• need to foster the Group’s business relationships with suppliers, customers and other key stakeholders
• impact of the Group’s operations on communities and the environment
• desirability of the Group maintaining a reputation for high standards of business conduct
• need to act fairly as between members of the Group.
The directors take into account the views and interests of a wider set of stakeholders, and you can find out more
about how the Group engages with its stakeholders below on pages 44, 45 and 53. During the year the Board and
its committees received papers, presentations and reports, participated in discussions and considered the impact
of the Group’s activities on its key stakeholders (wherever relevant). We acknowledge that every decision we make
will not necessarily result in a positive outcome for all of our stakeholders and the Board frequently has to make
difficult decisions based on competing priorities. By considering the Group’s purpose and values together with its
strategic priorities and having a process in place for decision making, we do, however, aim to balance those different
perspectives.
In terms of particular stakeholder groups
• Customers, employees, suppliers, community and environment: see the future prospects and key performance
indicator sections of the Strategic Report. Additionally, other forms of interaction with different groups are
maintained, including employee forums where appropriate, newsletters and group broadcasts.
• Shareholders: we would guide you to the entire report and to take advantage of the details in the investor sector
of our portal on the website (www.bbb-plc.com).
How does the Board engage with stakeholders?
The Board will sometimes engage directly with stakeholders on certain issues such as remuneration schemes,
strategic direction, investment and fundraising issues. The Board considers information from across the organisation
to help it understand the impact of the Group’s operations, and the interests and views of our key stakeholders in
maximising shareholder value. It also reviews strategy, financial and operational performance, as well as information
covering areas such as key risks, and legal and regulatory compliance. As a result of these activities, the Board has
an overview of engagement with stakeholders, and other relevant factors, which enable the directors to comply with
their legal duty under section 172 of the Companies Act 2006. For details on how the Board operates and the way
in which the Board and its committees reach decisions, including the matters we discussed during the year, see
pages 45 to 53.
Key strategic decisions
Decisions taken by the Board and its committees consider the interests of our key stakeholders, the impacts of these
decisions and the need to foster the Group’s business relationship with customers, suppliers and other stakeholders,
as well as engagement with our employees. Papers submitted to the Board consider the impact on key stakeholders.
Directors have had regard to the matters set out in section 172(1) (a)-(f) of the Companies Act 2006 when
discharging their section 172 duties. The following are some of the decisions taken by either the Board or its
committees during the year and the considerations given to stakeholder interests and impacts:
30
Bigblu Broadband plc
Strategic Report
Section 172 (1) Statement (continued)
For the year ended 30 November 2021
Disposal of Fixed Wireless Operations in the UK
As part of the Board’s decision to dispose of our Fixed Wireless operations in the UK, which was completed on 10
June 2021, the Board took into consideration a number of stakeholders, including: our investors both institutional
and retail, our colleagues who were participants in certain EMI schemes and LTIP’s and our customers to ensure
that they received the most appropriate products in the near and long-term at the most appropriate prices. In
addition, we repaid out debt of £8.4m and reduced the RCF with Santander to £5m, which will allow us to invest
greater amounts in the continuing businesses.
Directors’ Remuneration Policy
Back in 2018 we sought the guidance from our major Institutional Investors on developing a new Directors’
Remuneration Policy (the Policy) regarding Long Term Incentive Plans “LTIP’s”. The Group HR director and our
NOMAD liaised with various stakeholders including the Executive Committee and all non-executive directors to
understand their views of the current remuneration arrangements of the Group and the alignment of remuneration
to our strategy and priorities over the medium term. These views were shared with the Remuneration Committee
alongside information on the wider workforce remuneration structure, external market practice, corporate
governance regulations and institutional guidelines. This was implemented. Post the Disposal, consideration was
given to ensuring we continue to have in place a remuneration structure including Management Incentive Plans that
benefits the Group’s employees whilst ensuring executive reward aligns with shareholders’ short and mid-term
interests.
31
Bigblu Broadband plc
Governance
Directors’ Report
For the year ended 30 November 2021
The Directors present their report together with the audited financial statements for the year ended 30 November
2021.
Results and dividends
The results include those of BBB PLC and its subsidiaries for the full year including continued and discontinued
activities and are set out in the financial statements on pages 73 to 113.
The Directors do not recommend the payment of a final dividend for the financial year ended 30 November 2021.
Directors and their interests
The Directors who served during the year are set out below, together with their beneficial interests in the ordinary
shares of the Group. Biographical details are included on pages 38 to 40.
Appointed
Michael Tobin
Andrew Walwyn
Frank Waters
Paul Howard
Christopher Mills*
Philip Moses
29 Sept 2015
12 May 2015
12 May 2015
29 Sept 2015
23 May 2018
21 May 2020
2021
Ordinary
shares of
15p each
489,823
3,294,004
325,090
149,577
258,334
-
2021
Share
options
-
350,790
326,766
133,333
-
-
2020
Ordinary
shares of
15p each
236,553
2,968,438
325,090
149,577
258,334
-
2020
Share
options
226,667
954,729
585,908
133,333
-
-
Total
4,516,828
810,889
3,937,992
1,900,637
* Mr Christopher Mills also has an indirect interest in a further 14,500,000 shares in the Group (through his interests
in Oryx International Growth Fund Limited, Harwood Capital LLP and North Atlantic Smaller Companies Investment
Trust). His total indirect and direct holdings is 14,758,334 shares representing 25.3% of the issued share capital.
As at the 30 November included in the above were 578,742 Share options vested but remaining unexercised.
32
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2021
Directors and their interests (continued)
Directors’ insurance and indemnities
The Group maintains directors’ and officers’ liability insurance which gives appropriate cover for any legal action
brought against its directors. In accordance with section 236 of the Companies Act 2006, qualifying third- party
indemnity provisions are in place for the directors in respect of liabilities incurred as a result of their office, to the
extent permitted by law. Both the insurance and indemnities applied throughout the financial year ended 30
November 2021 and through to the date of this report.
Directors share options
The Group has established an EMI option scheme and an ‘unapproved’ share option scheme, pursuant to which
the CEO and other members of staff have been or may be granted share options.
As explained in the Company’s 6 September 2021 circular to shareholders, adjustments were made to all options
granted under the above schemes that were outstanding at the time the return of value detailed in that document
became effective. In particular, the exercise price payable under those options was reduced by 45 pence per share
(being an amount equal to the return of value).
Details of the options that have been granted to Directors under the EMI and unapproved schemes and which were
outstanding during the year to 30 November 2021, are as follows:
Director
Scheme
Date of
grant
No. of
shares
under
option at
30
November
2020
Exercise
price
(pence)
per share
at 30
November
2020
Exercised
during the
year
No. of
shares
under
option at
30
November
2021
Exercise price
(pence) per share
at 30 November
2021 (or date of
exercise if
earlier)2
Michael Tobin
Unapproved
30/03/16
133,333
78.75
133,3333
Michael Tobin
Unapproved
21/12/16
93,333
114.45
93,3333
Andrew Walwyn EMI
17/03/16
233,333
78.75
233,3334
-
-
-
Andrew Walwyn EMI
21/12/16
51,942
114.45
-
51,942
Andrew Walwyn Unapproved
21/12/16
48,057
114.45
48,0574
Frank Waters
EMI
21/12/16
217
114.45
Frank Waters
Unapproved
21/12/16
86,450
114.45
Paul Howard
Unapproved
30/03/16
66,667
114.45
Paul Howard
Unapproved
21/12/16
66,666
78.75
-
-
-
-
-
217
86,450
66,667
66,666
78.75
114.45
33.75
69.45
69.45
69.45
69.45
33.75
69.45
Normal
expiry
date
N/A
N/A
N/A
21/12/26
N/A
21/12/26
21/12/26
30/03/26
21/12/26
Total
779,998
508,056
271,942
33
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2021
Notes:
(1)
(2)
All options included in the above table were capable of being exercised in full throughout the year to 30
November 2021 and will normally remain so until the tenth anniversary of their original date of grant.
As explained above, a 45 pence per share reduction was applied to the exercise price of all options that were
outstanding at the time the 2021 return of value became effective.
(3) Michael Tobin exercised options over 133,333 shares on 21 September 2021 and 93,333 shares on 30
September 2021. The closing share prices on these dates of exercise were 117 pence and 135 pence
respectively. For the avoidance of doubt, both these exercises occurred before the above noted return of
value became effective with the result that no adjustments were made to their exercise prices.
(4)
Andrew Walwyn exercised options over 233,333 shares on 25 October 2021 and 48,057 shares on 29
October 2021. The closing share prices on these dates of exercise were 87.5 pence and 84.5 pence
respectively. In connection with Mr Walwyn’s exercise of his EMI option (and as highlighted in the 6
September 2021 circular), he was paid an additional cash amount to compensate him for the fact that the
exercise price adjustment that was made to reflect the 2021 return of value negatively impacted the tax
treatment of his award. Details of this payment are included in the table on page 36.
Directors and their interests (continued)
Following consultation with a number of shareholders and as highlighted in previous reports, the Group has
established a Long-Term Incentive Plan (“LTIP”) and more recently a Management Incentive Plan, pursuant to which
the CEO and other members of staff have been or may be granted awards. There were no awards made under the
existing LTIP arrangements in FY21. However, as also explained in the Company’s 6 September 2021 circular to
shareholders, appropriate mechanisms have been put in place to provide cash compensation to LTIP participants
who exercise their awards after the time the return of value detailed in that document became effective. In particular,
these arrangements involve the payment to the relevant individual of an additional 45 pence per share in cash on
any such exercise.
34
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2021
Details of the options that have been granted to Directors and other staff members under the LTIP and which were
outstanding during the year to 30 November 2021, are as follows
Director
Scheme
Date of
grant
No. of
shares
under
option at
30
November
2020
Exercise
price
(pence) per
share at 30
November
2020
Exercised
during the
year
Lapsed
during the
year1
Normal
expiry
date
No. of
shares
under
option at
30
November
2021
Exercise
price (pence)
per share at
30
November
2021 (or
date of
exercise if
earlier)
Andrew Walwyn LTIP
30/05/18
421,907
15.00
Andrew Walwyn LTIP
28/10/19
199,489
15.00
Frank Waters
LTIP
30/05/18
338,968
15.00
Frank Waters
LTIP
28/10/19
160,273
15.00
1,120,637
-
-
-
-
-
322,548
99,359
15.00
30/05/28
-
199,489
15.00
28/10/29
259,142
79,826
15.00
30/05/28
-
160,273
15.00
28/10/29
581,690
538,947
Other staff
members
Other staff
members
LTIP
LTIP
30/05/18
1,054,549
15.00
106,9762
851,621
95,952
15.00
30/05/22
28/10/19
629,155
15.00
-
-
629,155
15.00
28/10/23
1,683,704
106,976
851,621
725,107
Total
2,804,341
106,976
1,433,311
1,264,054
Notes:
(1)
The ability to exercise awards under the LTIP is conditional on, amongst other things, the continued
employment of the individual within the Group and the satisfaction of specified performance conditions (which
are regularly reviewed by the Remuneration Committee). The lapses that occurred during the 12 months to
30 November 2021 were largely attributable to the fact that the performance conditions applicable to the May
2018 awards were formally assessed during the period and were only satisfied in part. Following the vesting
of an LTIP award, it will normally remain capable of exercise until the 10th anniversary of its original date of
grant.
(2)
These exercises of LTIP awards occurred before the 2021 return of value became effective with the result
that the relevant participants were not eligible to receive the additional 45 pence per share compensation
payment described above.
The Directors’ beneficial interests in share options shown in the tables on the previous pages comprise options
issued under the EMI option scheme, the “unapproved” option scheme and the LTIP. All such schemes, together
with other Management Incentive Plans, are reviewed at least annually to ensure they are in line with
shareholders’ expectations
35
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2021
Directors and their interests (continued)
There are a number of performance conditions as well as time restrictions relating to the financial year ended 30
November 2021 attached to these share schemes and are reviewed by the Remuneration Committee.
Directors' Remuneration
The following table shows emoluments paid and accrued to Directors during the financial year:
Year ended
Year ended 30 November 2021 30 November
2020
Total
Total
Salary/fees
£000
Bonus
£000
BIK
£000
Pension emoluments emoluments
£000
£000
£000
86
-
-
-
86
83
Current Directors:
Michael Tobin (Non-Executive
Director and Chairman)
Andrew Walwyn (Chief
Executive Officer)
Frank Waters (Chief Financial
Officer) *
289
544
287
553
2
3
11
853
477
9
845
537
Paul Howard (Non-Executive
Director)
61
63
-
Christopher Mills (Non-Executive
Director)
45
Philip Moses (Non-Executive
Director)
48
-
-
-
-
-
-
-
124
107
45
48
52
33
816
1,160
5
20
2,001
1,289
Included in the total emoluments above, following the disposal of Quickline to Northleaf during the period, and the
subsequent Return of Capital to shareholders of £26.1m, are payments for the executive directors under the
Management Incentive Plan to Andrew Walwyn (£252k (FY20: Nil)) and Frank Waters (£212k (FY20: Nil) which are
treated as continuing business costs but analysed on a non-GAAP basis as exceptional, as attached to the disposal.
In addition, Frank Waters received an additional bonus for the disposal of Quickline for £175k in the financial year,
which was charged to the discontinued business. In FY20 bonus payments to Andrew Walwyn and Frank Waters of
£181k and £257k respectively related to the completion of the sale to Eutelsat were charged to the discontinued
business.
36
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2021
Service Contracts
The Chief Executive Officer, and Chief Financial Officer have service contracts with the Group that are terminable
by either party on not less than 12 months prior notice. The non-executive Directors have service contracts with the
Group that are terminable by either party on not less than 3 months prior notice.
Pensions and Private Healthcare
There are pensions and private healthcare arrangements in place for the Chief Executive Officer and Chief Financial
Officer as well as central team members as agreed with individuals.
Substantial shareholdings
As at 30 November 2021 the Group was aware of the following interests in 3% or more of its issued voting share
capital:
Shareholder
Harwood Capital LLP
Richard Griffiths
Gresham House Asset Management
BGF Investment Management Limited
Liontrust Asset Management
Hargreaves Lansdown Nominees Limited
Mr Andrew Walwyn
Interactive Investor Services Nominees Limited
Employee involvement
% Holding
No. of shares
24.9
11.2
8.9
7.8
6.7
5.9
5.7
5.1
14,500,000
6,514,278
5,203,644
4,544,444
3,911,351
3,435,531
3,294,004
2,946,417
The Group's policy is to encourage involvement at all levels, as it believes this is essential for the success of the
business. Employees are encouraged to present their views and suggestions in respect of the Group’s performance
and policies.
Financial risk management objectives and policies
The Group's financial instruments comprise cash, liquid resources and various items, such as trade receivables and
trade payables that arise directly from its operations. The main risks arising from the Group's financial instruments
are currency risk, interest rate risk, credit risk and liquidity risk. The Directors review the policies for managing each
of these risks on an on-going basis and they are summarised in note 24 to the financial statements.
37
Bigblu Broadband plc
Governance
Board of Directors
For the year ended 30 November 2021
Directors
Appointment
Committee
Membership
Michael Tobin OBE
Non-Exec Chairman
Paul Howard
Non-Executive
Director
Christopher Mills
Non-Executive
Director
Philip Moses
Non-Executive
Director
joined
Michael
became Chairman
2015
the Board and
in September
Paul
joined
September 2015.
the Board
in
Christopher
Board in May 2018.
joined
the
Phil joined the Board in
May 2020
Michael chairs the Board’s
Remuneration and Nomination
Committees and is a member of the
Audit and Risk Committee.
Paul serves on the Board’s
remuneration and Audit and
Risk Committees.
None
the Board’s
Phil chairs
Audit and Risk Committee.
Independence
The Board consider Michael to be an
independent Director.
The Board consider Paul to
be an independent Director.
Board
The
consider
Christopher to be a non-
independent Director.
The Board consider Phil to
independent
be
Director.
an
Background
and Experience
Michael is a highly successful serial
technology entrepreneur & pioneer
with over 30 years' experience in the
telecoms & technology sector.
As Chief Executive, Michael Tobin
OBE led TelecityGroup plc, a leading
FTSE250 Technology company from
2002 to 2015.
Michael
in 2002
joined Redbus
delisting it from the main market to
AIM and then took it private, winning
the
London Business Awards
"Business Turnaround of the Year"
award in 2005. After engineering the
merger with Telecity he successfully
re-listed TelecityGroup in October
2007 winning the accolade of UK
Innovation Awards IPO of the year
2008
techMARK
Achievement of the year in the same
year.
and
the
Subsequently he grew the business
from £6m market cap in 2002 to being
a top performer in the FTSE250
worth over £2Bn, being recognised
as Britain's Most admired Tech
Company in 2012.
company
founded
Christopher
Harwood
Capital
Management in 2011, a
successor of the former
parent
of
Harwood, J O Hambro
Capital Management which
he co-founded in 1993. He
is Chief Executive and
Investment Manager of
North Atlantic Smaller
Investment
Companies
and Chief
Trust
plc
Investment Officer
of
Harwood Capital LLP. He
is a Non-Executive Director
companies.
of
Christopher was a Director
of Invesco MIM, where he
was
of North
American Investments and
Venture Capital, and of
Montagu
Samuel
International.
several
head
Phil has held CFO level
roles in both telco and
infrastructure companies in
the UK and internationally
for the last 20 years.
He held several divisional
CFO positions at BT as
well as that of IR director
and Group Controller.
Subsequently, he was
Group CFO at p/e owned
Arqiva, the UK’s largest
communications
tower
company; at London City
Airport and at pan-African
fibre and data centre
provider Liquid Telecom.
Phil has a mathematics
BSc
from Warwick
university and is an FCCA.
Phil was appointed CFO of
Osborne Infrastructure Ltd
in January 2022
ranked
Paul spent over 15 years with
J.P Morgan Cazenove as a
telecoms and media analyst
and was one of Cazenove's
youngest ever partners. He
won numerous awards from
Reuters and Starmine and
was Head of the Number
One
European
telecoms research team as
ranked by the Institutional
Investor in 2011. Paul left
Cazenove
in 2011 and
became an investor and non-
executive director of various
small telecoms companies.
He also spent a year with
in 2015
Morgan Stanley
helping
their Select Risk
equity trading business. Paul
has a BSc from Durham
University in Maths and is a
qualified accountant.
38
Bigblu Broadband plc
Governance
Board of Directors (continued)
For the year ended 30 November 2021
Directors (continued)
Michael Tobin OBE
Non-Exec Chairman
Paul Howard
Non-Executive
Director
Christopher Mills
Non-Executive
Director
Philip Moses
Non-Executive
Director
Background and
Experience
(continued)
External
appointments
subsidiary
that, he ran
Prior to joining Telecity Group, Michael
headed-up
e-Commerce
Fujitsu's
in Frankfurt, Germany.
operations
ICL's Danish
Before
outsourcing
of
out
Copenhagen Denmark. He also held
several senior positions based in Paris
for over 11 years including Business
Development Director at International
Computer Group coordinating global
distribution of IT infrastructure. As a
Non-Exec Director, Michael was
instrumental in transforming PACNET
in Hong Kong from a Sub Sea Cable
operator to a successful Datacentre
operator culminating in its sale in 2016
to Telstra for $800m.
was
named
Michael was named 'UK IT Services
Entrepreneur of the Year' by Ernst &
Young in 2009, 2010 & 2011; PWC
Tech CEO of the Year 2007; London
'Business
Chamber of Commerce
Person of the Year' for 2009 & 2010; In
2009
techMARK
'Personality of the Year'; In 2007 &
2009 he was the winner of the DCE
Outstanding Leader of the Year, and in
2008 won
'Data Centre Business
Person of the Year' at the Data Centre
Leaders awards. He was awarded
'Outstanding Contribution
the
Industry' at the Data Centre Europe
awards and in 2011 received a Lifetime
Achievement Award for services to the
industry.
In 2005 he was named
number 31 of Britain's Top 50
Entrepreneurs.
to
In 2015 Michael was honoured in the
Queens New Year’s Honours List with
the Order of the British Empire medal
for Services to the Digital Economy.
Michael holds a number of non-
roles
executive and Chairmanship
including EdgeConneX, Audioboom,
Ultraleap,
NorthC
Datacenters, Everarc PLC, Sungard
Availability Services, DC Byte,
Instrumental, ScaleUp Group UK.
LeaseWeb,
Lewis Moody
Foundation where he is Ambassador
Pulsant,
The
n/a
holds
Christopher
a
number of non-executive
roles.
n/a
39
Bigblu Broadband plc
Governance
Board of Directors (continued)
For the year ended 30 November 2021
Directors (continued)
Appointment
Committee
Membership
Independence
Andrew Walwyn
Chief Executive Officer
Andrew joined the Board as CEO on the completion of
the reverse acquisition in May 2015.
Frank Waters
Chief Financial Officer
Frank joined the Board as CFO on the completion of the reverse
acquisition in May 2015.
Andrew serves on the Board’s nomination committee.
None
Executive – non-independent
Executive – non-independent
External
appointments
None
Andrew began his career at Carphone Warehouse
before moving
to DX Communications as Sales
Director. Following the sale of DX to Telefonica, Andrew
took on
the role as Managing Director of Tiny
Computers where he oversaw the sale of the ISP
business to Tiscali and the eventual sale of the
company to Time Computers.
In 2008, Andrew co-founded Bigblu Broadband having
identified the gap in the market for satellite broadband.
Frank holds a number of non-executive directorships in sports
clubs and businesses.
Frank qualified as a Chartered Accountant (ICAS) with Ernst &
Young in 1989. Frank has spent the last 20 years, primarily as
finance director, in a number of fast-growing entrepreneurial
companies in the mobile, consumer electronics and technology
sectors.
Frank was instrumental in the sale of DX Communications
alongside Andrew Walwyn to what is now Telefonica.
Frank joined Bigblu Broadband in the autumn of 2013 and, as
Chief Financial Officer, is responsible for all Group finance,
commercial, legal, regulatory, HR, IT and M&A matters.
40
Bigblu Broadband plc
Governance
Statement of Directors’ Responsibilities
For the year ended 30 November 2021
The Directors are responsible for preparing the Strategic Report, Directors’ Report and the financial statements in
accordance with applicable law and regulations.
UK Company law requires the directors to prepare Group and Company Financial Statements for each financial
year. Under that law the directors are required to prepare Group Financial Statements in accordance with
International Financial Reporting Standards (‘IFRS’) as adopted by the EU and the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market. The Directors have chosen to
prepare the Group financial statements in accordance with IFRS as adopted by the EU.
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial
position, financial performance and cash flows of the Group for that year.
In preparing each of the group and company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and estimates that are reasonable and prudent;
•
state that the group had complied with IFRS, subject to any material departures disclosed and explained in
the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
group and the company will continue in business.
•
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at
any time the financial position of the Group and to enable them to ensure that the financial statements comply with
the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
On behalf of the Board
Andrew Walwyn
Chief Executive Officer
21 March 2022
41
Bigblu Broadband plc
Governance
Corporate Governance Statement
For the year ended 30 November 2021
Dear Shareholder,
At Bigblu Broadband plc all our stakeholders are important to us. The design and operation of a robust governance
structure appropriate for a Group of our scale and ambition is critical to meeting their needs. Our approach to
governance is based on the concept that good corporate governance enhances long-term shareholder value and
sets the culture, ethics and values for the rest of the Group.
The Board has ultimate responsibility for reviewing and approving the Annual Report and Accounts and it has
considered and endorsed the arrangements for their preparation. The Directors confirm the Annual Report and
Accounts, taken as a whole is fair, balanced and understandable and provides the information necessary for
shareholders to assess the Group's position and performance, business model and strategy.
Michael Tobin OBE
21 March 2022
42
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Quoted Companies Alliance Code for Small & Mid-sized Quoted Companies
The board of Bigblu Broadband Group plc (the “Company”) is responsible for the Group’s corporate governance
policies and recognises the importance of high standards of corporate governance and integrity. The Group adopted
the Quoted Companies Alliance Code for Small & Mid-sized Quoted Companies (the “QCA Code”) in September
2018. This statement sets out how the Group complies with the 10 principles of the QCA Code.
1. Strategy & business model
The Group is an alternative broadband provider who markets and delivers broadband services to homes and
businesses mainly located in areas of poor or underserved telecoms infrastructure. The Group’s target customers
are residential and businesses who are typically not served by fibre to the premise’s broadband. The Group is
technology agnostic and uses a variety of technologies to deliver a super-fast broadband service to target customers
including satellite broadband, 4G, 5G and licensed and unlicensed spectrum fixed wireless broadband (point to
point and point to multi-point) and fibre.
In April 2021, the Group announced the disposal of the Group’s UK Fixed Wireless operation, Quickline, to
Northleaf. Following completion in June 2021 the Group remaining operations consist of its Australian operations
(SkyMesh) and its Nordics business (Bigblu Norge AS).
The Group is now active and has customers in Australia and the Nordics with approximately c60k customers as at
30 November 2021. The Group although smaller in size following the disposal is extremely focussed on growing
the Continuing Group. The Group works closely with network partners to ensure we get the best customer offers in
each jurisdiction.
Together with local bespoke systems the Group’s cloud-based global billing and customers service (ERP) platform,
Pathfinder, enables it to support customers around the world in any language the customer chooses, with the system
supporting multiple currencies and VAT jurisdictions. The Group uses satellite capacity from a number of different
satellite owners to enable it to provide satellite broadband services and these include but are not limited to EBI and
NBNCo. The Group makes its decisions on which satellite operator to use in each country based on a mixture of
quality of their services, their product roadmap, business model, resultant price structure, and the amount of
capacity available in a particular market.
Satellite design and processing efficiency continue to progress at a pace resulting in continually improving satellite
economics with each new satellite launch allowing the Group to continue to improve its broadband offerings and
keep pace with the growth in internet demand. Since the Group’s inception in 2008, headline consumer satellite
broadband speeds in Australasia and the Nordics have increased from 4 Mbps to 50 Mbps and the Group, working
with its satellite owner partners, believes that speeds and data allowances will continue to increase exponentially
over the next 3 – 5 years.
Our Australian business SkyMesh, went from strength to strength with year-on-year overall customer growth of
c.10% and of equal importance, strong customer engagement with 40% of new customers coming from word of
mouth and a net promoter score of 46, up from 44 year on year, and against an average competitor score of 25.
During the year SkyMesh was also awarded the Whistleout 2021 Best Satellite NBN Co provider. We further
reinforced our close working relationship with NBN Co as it pro-actively extended the use of satellite in regional and
remote Australia.
43
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
After a period of Satellite investment and focus, following the Disposal, the Board continue to evaluate the
opportunity to allocate part of the net proceeds from the Disposal to refining and enhancing the Group's service
proposition in the Nordic market. Initiatives considered and acted upon included adding a Sales and Marketing
director for the Nordics, now appointed, with a strategic objective to, among other things, expand the geographic
focus of the operation into Sweden and Finland. In addition to the launch of new product satellite offerings across
the region offering speeds of 50Mbps and unlimited capacity, the Group re - commenced investing in the upgrade
of its fixed wireless network. The Directors consider that the Group's ability to offer FWA (Fixed Wireless) 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,
provide the Directors with confidence of stronger demand for its FWA solutions in Norway whilst, historically capital-
light satellite solutions are expected to be successfully deployed across the wider Nordic region.
The Directors believe there is a significant opportunity to continue to grow the Group’s subscriber base organically
and also through bolt on acquisitions in the markets we operate in.
2. Understanding and meeting shareholder needs and expectations
The AGM is the main forum for dialogue with shareholders and the Board. The Notice of Meeting is sent to
shareholders at least 21 clear days before the meeting. The chairs of the Board and all committees, together with
all other Directors, routinely attend the AGM and are available to answer questions raised by shareholders.
Feedback from investors is also obtained through direct interaction between the CEO and CFO at meetings
following the publication of its full-year and half-year results. The Group also holds an open retail investor meeting
shortly after results have been published. There is also regular dialogue with investors through the medium of the
Group’s corporate broker (finnCap).
The Company has a dedicated investor relations website at www.bbb-plc.com which aims to keep all types of
investor fully informed and up to date on the Group’s activities, share price and future meetings as well as supplying
documents and information which may be of general interest.
44
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Details of specific contacts at finnCap are published on all the Group’s RNS releases and on the Group’s investor
website.
3. Taking into account wider stakeholder & social responsibilities & their implications for long-term success
The long-term success of a business and good Corporate Governance includes the Board considering the Group's
impact on the communities it operates in, the environment and society as a whole. The group’s stakeholders include
shareholders, customers, members of staff, suppliers, regulators, industry bodies and creditors including lenders.
The Board works hard to identify the Group’s stakeholders and understand their needs, interests and expectations.
The principal ways in which their feedback on the Group is gathered are via meetings, conversations, surveys and
online reviews. Following this feedback, the Group has continued and evolved its clearly defined customer-focused
and people-led strategy.
Every company should consider its corporate social responsibilities (CSR). Any CSR policy should include a
narrative on social and environmental issues and should show how these are integrated into the Group's strategy.
Integrating CSR into strategy will help create long-term value and reduce risk to shareholders and other
stakeholders. The Group see CSR as a very important area for consideration and are currently in the process of
finalising a CSR Policy. This year we have reported on carbon output for the first time in Chief Executive Report
section. In the coming year we will be looking at setting carbon reduction targets following the TCFD
recommendations (The Task Force on Climate-related Financial Disclosures).
The Directors are aware of the impact the business activities have on the communities in which it operates and has
in place an environmental policy. The Group's responsibilities to stakeholders including staff, suppliers and
customers and wider society are also recognised and this is evidenced and underpinned by our values:
Innovation – Industry leading product design always exceeding customers’ expectations
• Customers – Grow profitable elements of the business whilst putting the customer first
•
• Quality – Excellence in operations, processes and systems
• Environment – Engaging with and supporting the communities in which we work
• Teamwork – Support and engage with our people
4. Embedding effective risk management
The board of the Group ensures that its risk management framework identifies and addresses all the relevant risks
and threats that the business may be subject to in the execution of its business plan. These include extended
business activities including key customers and its supply chain. The section “Principal Risks and Uncertainties” on
pages 24 to 28 of this Annual Report identifies these risks and how the Board and the business mitigate these risks.
The board of the Group meets regularly during the year and continually reappraises and discusses the tactics and
strategy employed to mitigate these risks.
5. Maintaining a balanced and well-functioning board
The Company ensures a balanced board membership to reflect the skills and attributes needed. The board consists
of two executive directors and four non-executive directors.
45
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
The Board and its committees
The Board is responsible for the effective oversight of the Group. It also agrees the strategic direction and
governance structure that will help achieve the long-term success of the Group and deliver shareholder value. The
Board takes the lead in areas such as strategy, financial policy and making sure a sound system of internal control
is maintained. The Board’s full responsibilities are set out in the schedule of matters reserved for the Board
described below. The Board delegates authority to its committees to carry out certain tasks on its behalf, so that it
can operate efficiently and give the right level of attention and consideration to relevant matters.
Role of the Board and management
Role of Chairman and Chief Executive Officer
There is a clear division of responsibilities between the running of the Board and the executive responsible for the
Group’s business.
The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting the agenda for Board
meetings. Once strategic objectives have been agreed by the Board, it is the Chief Executive Officer’s responsibility
to ensure they are delivered upon and consistently to be accountable to the Board. The day-to-day operations of
the Group are managed by the Chief Executive Officer and his management team.
Board processes
The full Group Board met ten times in the financial year under report and is scheduled to meet eight times in the
current financial year and at any other time as may be necessary to address any specific significant matters that
may arise.
The agenda for Board meetings is prepared in conjunction with the Chairman. Submissions are circulated in
advance and for regular Board meetings will include operational and financial updates together with papers relating
to specific agenda items.
Management prepares monthly finance reports which allow the Board to assess the Group's activities and review
its performance. Members of management are regularly involved in Board discussions and Directors have other
opportunities for contact with a wider group of employees.
To assist in the execution of its responsibilities, the Board has established an Audit and Risk Committee, a
Remuneration Committee and a Nominations Committee together with a framework for the management of the
consolidated Group including a system of internal control.
The Board is ultimately responsible for the Group's system of internal control and for reviewing its effectiveness.
This includes financial, operational and compliance controls and risk-management systems. The Board has
reviewed the effectiveness of the system of internal control during the year in conjunction with the External Auditors.
Internal control systems are designed to meet the Group's particular needs and the risks to which it is exposed.
Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve
business objectives and by their nature can only provide reasonable and not absolute assurance against
misstatement and loss.
Role and Responsibilities of the Board
The Board's primary role is the protection and enhancement of long-term shareholder value. To fulfil this role, the
Board is responsible for the overall management and corporate governance of the consolidated Group including its
strategic direction, establishing goals for management and monitoring the achievement of these goals.
46
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
From time to time the Board may delegate or entrust to any Director holding executive office (including the CEO)
such of its powers, authorities and discretions for such time and on such terms as it thinks fit. During 2021, the
Board reviewed and updated the "Delegation of Board authority" which establishes those matters which it is
considered appropriate remain within the overall control of the Board (or its committees) and those which are
delegated to the CEO (or onwards as appropriate). In addition to overall Group strategy, the Board approves the
annual budget and retains control over corporate activity (mergers, acquisitions, partnerships, material disposals
and investments) and material contract and financing decisions (over and above set value/credit-risk limits). The
Board considers that the current authority remains appropriate for the Board.
Management's role is to implement the strategic plan established by the Board and to work within the corporate
governance and internal control parameters established by the Board.
The Board has approved a schedule of matters reserved for its decision; specifically, the Board is responsible for:
• Guiding the Group’s long-term strategic aims, leading to its approval of the Group’s strategy and its
budgetary and business plans
• Approval of significant investments, M&A and capital expenditure
• Approval of annual and half-year results
• Ensuring maintenance of a sound system of internal control and risk management (taking into consideration
recommendations of the Audit and Risk Committee)
• Ensuring adequate succession planning for the Board and Executive management (taking into
consideration the recommendations of the Nomination Committee)
• Determining the remuneration policy for the Directors and the senior management team (taking into
consideration the recommendations of the Remuneration Committee)
Board focus during the year
• Strategy and Funding:
During FY21, the Board worked with management to identify and anticipate industry trends to ensure that
the Group’s strategy is designed to address these trends as well as other industry dynamics, such as the
competitive landscape.
The Board also reviewed relationships with the Group’s main partners and suppliers. Together with our
Partners over the past five years, the Group successfully executed its strategy of becoming a leading
provider of last mile rural broadband solutions through a combined offering of both satellite and fixed
wireless products. The Board believes that the Disposal of Quickline provides the Group with the opportunity
to crystalise an attractive return on invested capital to support the further progress of the Continuing Group.
47
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
• Financials:
During FY21, the Board reviewed the Group's operating results and financial statements with management
and the Group's external auditors. The Board also reviewed and approved the budget and operating plan
for the financial year. This was given even more attention including multiple scenarios run and sensitivity
analysis performed as we navigate through the COVID-19 Pandemic.
• Governance:
The Board continues to review its governance structure following the adoption of the QCA Code to ensure,
where possible, the Company is compliant with the requirements applicable to a publicly listed Group and
the QCA Code. In addition, the control environment was improved with the recruitment of additional
Financial and systems resources.
• Business performance:
In FY21, the Board received and reviewed reports from management on the performance of the Group’s
business. The Board engaged in discussions with management on various aspects of business
performance, Key Performance Indicators, including business drivers, industry trends, risks, opportunities
and the competitive landscape.
Board committees
The Board has established committees as follows:
• Audit and Risk Committee (chaired by Phil Moses) to oversee financial reporting, internal control and the
management of the risks the Group faces.
• Nomination Committee (chaired by Michael Tobin OBE) to lead the process for appointments to the Board
and a
• Remuneration Committee (chaired by Michael Tobin OBE) which has the responsibility of helping to develop
and manage the Group’s Remuneration Policy.
The committee reports can be found on pages 55 to 62 and each committee’s full terms of reference are available
on our website.
Table of Attendance
The table below summarises the attendance of the Directors and committee members at the scheduled Board and
committee meetings held during the year:
Michael Tobin OBE*
Andrew Walwyn
Frank Waters
Paul Howard
Christopher Mills
Philip Moses**
Board
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee
Held
9
9
9
9
9
9
Attended
9
8
9
9
7
9
Held
2
-
-
2
-
2
Attended
2
-
-
2
-
2
Held
4
-
-
4
-
Attended
4
-
-
4
-
-
Held
1
1
-
1
-
-
Attended
1
1
-
1
-
-
The figures in the “held” column represent the number of meetings a Director was eligible to attend as a Director
and the “attended” column represents the number of meetings attended by that Director.
* Michael Tobin OBE is Chairman of the Board and Chairman of the Nomination and Remuneration Committees.
** Philip Moses is Chairman of the Audit and Risk Committee.
48
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
6. Having appropriate experience, skills and capabilities on the board
Board Composition, Qualification and Experience
The Board currently comprises six (2020: seven) Directors. The number and/or composition may be changed where
it is felt that additional expertise is required in specific areas, or when an outstanding candidate is identified.
The composition, experience and balance of skills on the Board are periodically reviewed to ensure that there is the
right mix on the Board and its committees, and they are working effectively. The Board comprises a Non-Executive
Chairman (who, for the purposes of the QCA Code was independent on appointment), three Non-Executive
Directors, two of whom are considered by the Board to be independent for the purpose of the QCA Code. There
are two Executive Directors who are considered by the Board to be non-independent for the purpose of the QCA
Code.
The current members of the Board have a wide range of skills and experience. The Board believes that a
membership that combines detailed knowledge of the Group’s operations, the technology industry and leading a
Group listed on the London Stock Exchange are crucial to the Board's ability to lead the Group successfully.
The composition of the Board is determined using the following principles:
• a majority of the Board should be non-executive Directors. Currently there are 4 non-executive Directors
•
•
and 2 executive Directors.
the role of Chairman is to be filled by a non-executive Director,
the Board should have enough Directors to serve on various committees of the Board without overburdening
the Directors or making it difficult for them to fully discharge their responsibilities,
• Directors appointed by the Board are subject to election by shareholders at the following annual general
meeting and thereafter one third of Directors are subject to retire by rotation each year.
The Company Secretarial service is provided by a professional services company in order to conform to
requirements.
49
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Key Board Roles
Chairman
Chief Executive Officer
Non-Executive Directors
Leads the Board
Leads the management team
Promotes highest standard of
corporate governance
Challenges strategic matters
Supports the Chairman to ensure
appropriate governance standards spread
through the Group
Raises strategic initiatives aimed at
improving shareholder returns in line with
the strategic direction of the Group
Promotes a culture of openness
and debate
Oversees implementation of all Board-
approved actions
Encourages constructive
relations between Executive and
Non-Executive Directors
Facilitates effective contributions
by the Non-Executive Directors
Ensures that the Board is made aware of
the employees' views on relevant issues
Develops proposals for the Board to
consider in conjunction with fellow
Executive Directors
Non-Executive Director Independence
Acts as intermediary between
Directors when required
Challenges strategic initiatives
presented by Executive Directors
as well as assists in the
development of Group Strategies
Available to stakeholders to
address any concerns or issues
that they feel have not adequately
been addressed through usual
channels of communication.
Integral role in succession
planning
The Board considers and reviews the independence of Non-Executive Directors on an annual basis as part of the
Directors’ performance evaluation. In carrying out the review, consideration is given to factors such as their
character, judgement, commitment and performance on the Board and relevant committees and their ability to
provide objective challenge to management.
The Board considers its Independent Non-Executive Directors bring strong judgement and considerable knowledge
and experience to the Board’s deliberations.
As noted in the Annual Report on Remuneration on page 60, Michael Tobin OBE, and Paul Howard both participate
in the Group’s share option plan. Notwithstanding this, both Michael Tobin and Paul Howard are considered
independent in character and judgement, this is evidenced by the valuable contributions they make at Board and
Committee meetings, and in particular, the knowledge and experience they bring to the roles as Chairman, Non-
Executive Directors and Committee members. In addition, whilst Christopher Mills is considered Non-Independent.
Christopher provides enormous guidance and support to the business and is considered to be independent in
character and judgement.
Appointment and Tenure
All Non-Executive Directors serve on the basis of letters of appointment which are available for inspection upon
request. The letters of appointment set out the expected time commitment of Non-Executive Directors who, on
appointment, undertake that they will have sufficient time to meet what is expected of them. Non-Executive Directors
are appointed for an initial three-year term and the continuation of their appointment is conditional on satisfactory
performance and subject to re-election at the Group’s Annual General Meetings.
50
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Executive Directors serve on the basis of service agreements which are also available for inspection upon request.
Further details on the Executive Directors’ service agreements are included in the Annual Report on Remuneration,
on page 60.
Director Training
The Chairman is responsible for the induction of new Directors and ongoing development of all Directors. The Board
received tailored training as appropriate for service on a listed Company Board. New Directors receive a full, formal
and tailored induction on joining the Board designed to provide an understanding of the Group’s business,
governance and key stakeholders. The induction process typically includes an induction pack, operational site visits,
meetings with key individuals and the Group’s advisors, and briefings on key business, legal and regulatory issues
facing the Group.
As the business environment changes, it is important to ensure the Directors’ skills and knowledge are refreshed
and updated regularly. Accordingly, the Nomad ensures that updates on corporate governance, regulatory and
technical matters are provided to Directors at special sessions in between formal Board meetings. In this way,
Directors keep their skills and knowledge relevant so as to enable them to continue to fulfil their duties effectively.
Information and Support Available to Directors
All Board Directors have access to the Company Secretary, who advises them on Board and governance matters.
The Chief Executive Officer, Chief Financial Officer and the Company Secretary work together to ensure that Board
papers are clear, accurate, delivered in a timely manner to Directors, and of sufficient quality to enable the Board
to discharge its duties. As well as the support of the Company Secretary, there is a procedure in place for any
Director to take independent professional advice at the Group’s expense in the furtherance of their duties, where
considered necessary or advisable.
Director Election
Following recommendations from the Nomination Committee, taking into account the results of the Board's
performance evaluation process, the Board considers that all Directors continue to be effective, committed to their
roles and have sufficient time available to perform their duties. In accordance with the Company’s Articles of
Association one third of Directors are to retire by rotation excluding those appointed during the year and those re-
elected at the Group’s AGM in 2021 as set out in the Notice of AGM.
Directors’ Conflicts of Interest
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those
of the Company. Where the Board believes that a significant conflict exists, the Director concerned is either not
present or does not take part in discussions and voting at the meeting whilst the item is considered.
Directors have a statutory duty to avoid situations in which they have, or may have, interests that conflict with those
of the Company, unless that conflict is first authorised by the Directors. This includes potential conflicts that may
arise when a Director takes up a position with another Company. The Company’s Articles of Association allow the
Board to authorise such potential conflicts, and there is in place a procedure to deal with any actual or potential
conflict of interest. The Board deals with each appointment on its individual merit and takes into consideration all
the circumstances.
All other appointments have been authorised by the Board and have been included in the conflicts register.
51
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Independent professional advice and access to Company information
Each Director has the right of access to all relevant Group information and to the Group’s management and, subject
to prior consultation with the Chairman, may seek independent professional advice at the Group's expense. A copy
of any advice received by the Director is to be made available to all other members of the Board.
7. Evaluating board performance
Board Evaluation and Effectiveness
The Board and its committees were formed upon listing in May 2015 and are reviewed from time to time. A Board
Effectiveness Review was carried out at the beginning of 2021 with the results being analysed by the Nomination
Committee and presented to the Board. A small number of proposed recommendations were made and were being
kept under review by the Board.
8. Ethical values & behaviours
The Company operates a corporate culture that is based on ethical values and behaviours. The Executive Directors
(comprising Andrew Walwyn and Frank Waters) communicate regularly with staff through meetings and messages
to ensure best-in-class ethical standards and to provide clear guidance on how the members of staff are expected
to behave towards their colleagues, suppliers, customers, shareholders and on their wider responsibilities to the
communities within which they operate.
9. Maintaining governance structures and processes
The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting the agenda for Board
meetings. Once strategic objectives have been agreed by the Board, it is the Chief Executive Officer’s responsibility
to ensure they are delivered upon. The day-to-day operations of the Group are managed by the Chief Executive
Officer and the Chief Financial Officer.
The division of responsibilities between the Chairman, Chief Executive Officer and Non-Executive Directors is set
out in writing in their contracts and agreed by the Board. The roles of the Chairman and the Chief Executive Officer
are separate with a distinct division of responsibilities. The partnership between Michael Tobin OBE and Andrew
Walwyn is based on mutual trust and facilitated by regular dialogue between the two. The separation of authority
enhances independent oversight of the executive management by the Board and helps to ensure that no one
individual on the Board has unfettered authority.
For the roles and responsibilities of the Board please see section 6 on page 49.
52
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
10. Communicating with shareholders and other relevant stakeholders
Shareholder engagement
Responsibility for shareholder relations rests with Andrew Walwyn, the Group's Chief Executive Officer. He ensures
that there is effective communication with shareholders and is responsible for ensuring that the Board understands
the views of shareholders. Andrew is supported by the Group's corporate brokers with whom he is in regular
dialogue. As a part of a comprehensive investor relations programme, formal meetings with investors are scheduled
to discuss the Group’s interim and final results. In the intervening periods, the Group continues its dialogue with the
investor community by meeting key investor representatives and holding investor roadshows as appropriate.
Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will be held on 19 May 2022, and such notice of the AGM will be
circulated to shareholders shortly. All shareholders have the opportunity to attend and vote, in person or by proxy,
at the AGM. The notice of the AGM can be found on our website and in a notice, which is being mailed out at the
same time as this Report. The Notice of AGM sets out the business of the meeting and an explanatory note on all
proposed resolutions. Separate resolutions are proposed in respect of each substantive issue. The AGM is the
Company’s principal forum for communication with private shareholders.
Risk management and internal controls
The Audit and Risk Committee report explains the process carried out for the assessment of the effectiveness of
the Group’s risk management and internal control systems on page 55.
Independent auditor and audit information
Each person who is a Director at the date of approval of this report confirms that, so far as the Director is aware,
there is no relevant audit information of which the Group’s auditor is unaware and each Director has taken all the
steps that he or she ought to have taken as a Director to make himself or herself aware of any relevant audit
information and to establish that the Group’s auditor is aware of that information. This confirmation is given and
should be interpreted in accordance with the provisions of the Companies Act 2006.
Haysmacintyre LLP have expressed their willingness to continue as the Group’s auditor. As outlined in the Audit
and Risk Committee report on page 59, resolutions proposing their reappointment and to authorise the Audit and
Risk Committee to determine their remuneration will be proposed at the next AGM.
On behalf of the Board
Ben Harber
Company Secretary
21 March 2022
53
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Nomination Committee Report
The role of the Nomination Committee is documented in its terms of reference which were reviewed and adopted
by the Board of Directors in May 2016. The Nomination Committee is chaired by Michael Tobin OBE, and its other
member is Andrew Walwyn.
Role and responsibilities
The Committee assists the Board in discharging its responsibilities relating to the composition and make-up of the
Board and any committees of the Board. It is also responsible for periodically reviewing the Board’s structure and
identifying potential candidates to be appointed as Directors or Committee members as the need may arise. The
Committee is responsible for evaluating the balance of skills, knowledge and experience as well as the size,
structure and composition of the Board and committees of the Board, retirements and appointments of additional
and replacement Directors and Committee members and makes appropriate recommendations to the Board on
such matters, having regard to the Company’s aim to be an equal opportunity employer, addressing its corporate
social responsibility by promoting equality and diversity in its workforce. A copy of the Committee terms of reference
is available on the Company’s website.
Meetings during the year
A meeting of the Nomination Committee was held on 23rd September 2021.
Process for Board appointments
When the Company decides to appoint a Non-Executive Director:
• The Committee Chairman, or search consultants where engaged, will typically submit a short-list of
candidates to members of the Committee and the Chief Executive Officer for them to review and enable
them to suggest other candidates unless the Committee has been made aware of the availability of very
suitable candidates.
• The Committee Chairman, one other Committee member and the Chief Executive Officer will then meet
short-listed candidates selected by the Committee. In addition, potential candidates will be given the
opportunity to meet with Executive Directors as appropriate. If the Chairman wishes to proceed with the
selection process, the candidate will then be invited to meet all members of the Committee.
• After meeting the candidate, the Committee will decide whether to recommend the candidate to the Board
for appointment.
• Where an exceptional candidate is identified the process may be shortened by Committee decision.
When the Company decides to appoint an Executive Director:
• The Committee Chairman and the Chief Executive Officer or, where engaged, search consultants, will
submit a short-list of one or more candidates to the Committee following meetings with Executive
management.
• Some or all of the Committee members will then meet the candidates selected for interview.
• The Committee’s assessments will be reviewed with the Chairman of the Board and the Chief Executive
Officer, following which a candidate may be recommended to the Board for appointment.
Michael Tobin OBE
Nomination Committee Chairman
21 March 2022
54
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Audit and Risk Committee Report
The role of the Audit and Risk Committee is documented in its terms of reference which were reviewed and adopted
by the Board in May 2016 and updated in December 2020 and the remit was extended to cover risk reviews as well
and renamed the Audit and Risk Committee. The annual report on the role and activities of the Audit and Risk
Committee are as follows:
Membership of the Committee
The Committee meetings were chaired by Philip Moses with Michael Tobin OBE and Paul Howard being the other
members of the Committee. All members and the Chair are Independent Non-Executive Directors. All of the
members of the Committee have extensive experience of the technology industry as well as financial procedures
and controls. During the year ended 30 November 2021, the Committee met twice. The table on page 48
summarises the attendance of members at committee meetings:
Only members of the Committee have the right to attend meetings, though the Committee may invite others to
attend if it is considered appropriate or necessary. The external auditors are invited to attend meetings of the
Committee on a regular basis as is the Chief Financial Officer where appropriate. The Chief Executive Officer and
members of the finance function may also be invited to Audit and Risk Committee meetings at the discretion of the
Committee. The Committee plans to meet at least twice during the year.
Roles and activities
The purpose of the Committee is to assist the Board in the effective discharge of its responsibilities for financial
reporting, corporate control and risk management. The Committee is responsible for monitoring the integrity of the
Group’s financial statements, including its annual and half-yearly reports, interim management statements,
preliminary result announcements and any other formal announcements relating to its financial performance prior
to release. The Committee oversees the relationship between the Group and its external auditors and makes
recommendations to the Board on their appointment. In addition, the Committee monitors and reviews the external
auditor’s independence and objectivity and the effectiveness of the audit process, taking into account relevant legal,
professional and regulatory requirements.
The terms of reference of the Committee also includes the following responsibilities:
•
•
•
•
•
•
to increase shareholder confidence and to ensure the credibility and objectivity of published financial
information
to assist the Board in meeting its financial reporting responsibilities
to assist the Board in ensuring the effectiveness of the Group's accounting and financial controls
to strengthen the independent position of the Group's external auditors by providing channels of
communication between them and the Directors
to review the performance of the Group's external auditing functions
to review and challenge significant accounting and treasury policies, the clarity and completeness of
disclosures in financial reports and significant estimates and judgements
to review the findings of the audit with the external auditors
•
• where requested by the Board, to review the content of the annual report and accounts and advise the
Board on whether, taken as a whole, it is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and performance, business model and strategy;
to monitor and keep under review the adequacy and effectiveness of the Group’s financial controls and risk
management systems, including a review of the Group’s risk management framework; and monitoring and
reviewing the appropriateness of timing of creation of a Group internal audit function together with an annual
internal audit plan; and
•
55
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Roles and activities (continued)
•
to review the Group’s policies and procedures for preventing and detecting fraud, its systems and controls
for preventing bribery, its Code of Conduct and its policies for ensuring that the Group complies with relevant
regulatory and legal requirements. The full terms of reference of the Committee can be found on the Group’s
website.
Significant issues
The issues considered by the Committee that are deemed to be significant to the Group are set out below.
Revenue
recognition
Goodwill and
intangibles
carrying value
The Group principally generates revenue from sales of airtime, data, hardware and installation
in connection with supplying Broadband services and network recharges. There is a risk
therefore that revenue is inappropriately recognised if revenue is incorrectly apportioned to a
product or service.
A detailed revenue recognition policy is in place, and follows IFRS 15, and includes processes
and procedures for recognition dependent upon the individual nature of the goods or services
sold. The Group’s external auditors as part of the annual statutory audit have reviewed the
revenue recognition policy and performed testing of revenue recognition and found revenue
to be appropriately accounted for in accordance with IFRS15.
At 30 November 2021, the Group had on its balance sheet goodwill of £5.5m (2020: £11.9m)
and other intangibles of £0.1m (2020: £0.1m) that has primarily arisen as a consequence of
acquisitions. Management performs impairment reviews annually, or more frequently if there
is an indication of impairment, based on the Group’s hubs. The cash flow forecasts used for
each hub are based on the latest Board approved budgets.
Management prepares an accounting paper for review by the Committee that details the
methodology applied, key assumptions used and the impact of sensitivity analysis. This
includes a discounted cashflow, taking into consideration the Group debt value, equity value,
the cost of debt and cost of equity, and a growth rate of 2% pa.
Having considered the impairment reviews performed, the Committee is satisfied that the
carrying value of goodwill and intangibles at 30 November 2021 is appropriate, therefore no
impairment required
Disposal of UK
Fixed Wireless
Operations
Return of value
to
shareholders
The accounting and disclosure for the transaction and the ongoing continuing businesses
were reviewed and agreed with the Auditors including splitting disclosure for Continuing and
Discontinued Operations.
An exercise was conducted by PWC to establish the distributable reserves for return of capital
to our shareholders. It was identified that the Merger Relief did not apply to the portion of
shares allotted 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, and a
reclassification of reserves as at 1 October 2019 has been made accordingly.
56
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Internal controls and risk environment
Whilst the Board is ultimately responsible for the establishment, monitoring and review of effectiveness of control
systems throughout the Group, each of the individual Company leaders drive the process through which risks and
uncertainties are identified. The Board recognises that rigorous internal control systems are critical to managing the
risks in achieving its strategic objectives. The Board further acknowledges that these systems are designed to
manage rather than eliminate risk in the Group.
The normal process for identifying, evaluating and managing significant risks faced by the Group would be overseen
by a Risk and Compliance Committee, in association with work performed by an internal audit function. Currently,
the Group operations team including finance personnel have taken a lead role in looking at controls in the various
jurisdictions this is supplemented with External Advisors from time to time. Where the Board defines an identified
risk as significant, procedures exist to ensure that necessary action is taken to rectify or mitigate as appropriate.
The aforementioned functions provide additional assurance to an established Audit and Risk Committee who have
ultimate responsibility for the oversight and review of the adequacy and effectiveness of the Group’s systems of
internal controls. In addition, the Committee in the absence of a dedicated internal audit function will from time to
time engage with External consultants to review aspects of the business as appropriate. Such findings will be
discussed at the Audit and Risk Committee.
The external auditors provide a supplementary, independent, and autonomous perspective on those areas of the
internal control system which they assess in the course of their work. Their findings are regularly reported to the
Audit and Risk Committee and the Board.
Key elements of the control environment are:
• annual budgets and strategic plans prepared for all business units
• monitoring of performance against budget and forecast with reporting to the Board on a regular basis
• monthly review of detailed key performance indicators formally at Board level as well as at an Operational
Level within the Continuing businesses.
• all contracts are reviewed at a level of detail appropriate to the size and complexity of the contract
•
•
• an operations team reviews key business processes, controls and their effectiveness, as well as identifying,
timely reconciliations are performed for all significant balance sheet accounts
clearly defined organisational structure and authorisation lines including Cash Control
•
assessing and managing significant control issues; and
the Audit and Risk Committee, which assesses the overall appropriateness of the Group’s internal control
environment.
The preparation and issue of financial reports is managed by the Group Finance Team, as delegated by the Board.
The Group’s financial reporting process is controlled using the Group accounting policies and reporting systems.
The Group Finance Team supports all reporting entities with guidance on the preparation of financial information.
This is especially important for new acquisitions. In the current year, this process was supported by the group
operations team. Each legal entity has a Finance Director allocated who has responsibility and accountability for
providing information which is in accordance with agreed policies and procedures. The financial information for each
entity is subject to a review at reporting entity and Group level by the Group Finance Director and also the Chief
Financial Officer. The Annual Report is reviewed by the Audit and Risk Committee in advance of presentation to
the Board for approval.
The Directors, by using appropriate procedures, systems and the employment of competent personnel, have
ensured that measures are in place to secure compliance with the Group’s obligation to keep adequate accounting
records. The accounting records are kept at the registered office of the Group or relevant statutory entity office.
57
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
How we manage risk
To enhance effective governance and risk management oversight in the future, it is intended that the Group will, as
appropriate, extend the internal audit program as approved by the Audit and Risk Committee with the deployment
of central resources into the Continuing Operations to review processes and controls. This programme will be
authorised by the Board to provide an additional level of assurance to the Audit and Risk Committee in overseeing
risk management and internal control activities.
It will also provide the business with a framework for risk management, upward reporting of significant risks and
policies and procedures.
On a half yearly basis, the Audit and Risk Committee will review the status on risk exposures and risk management
throughout the business within a pre-agreed risk management framework. The risk management framework will be
designed to identify, evaluate, analyse and mitigate or manage risks appropriate to the achievement of the business
strategy.
The Group will adopt a two-pronged approach to identifying risks:
1) a bottom-up approach at the business function level; where risks are managed at the operational level with an
appropriately defined escalation process in place for those risks rated as high; and
2) a top-down approach at the Executive level, where the principal risks and uncertainties are identified and
managed.
A series of risk identification approaches will be used including adding risk discussions into team meetings.
All identified risks will be assessed against a pre-defined scoring matrix and prioritised accordingly. Any risks
identified in the bottom-up approach deemed to be rated as higher risk are escalated in line with pre-defined
escalation procedures for further evaluation. The Group's risk appetite is considered by the Board and evaluated to
ensure appropriateness of risk management and mitigation.
Whistle-blowing and anti-bribery
Whistleblowing and Anti Bribery policies are in place in the Group enabling employees to confidentially report
matters of concern directly to Non-Executive Directors, and that all Executives are reminded of their responsibility
in relation to Anti Bribery Legislation. This is also a regular topic on the Board Meeting agendas.
58
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
External Auditor
The Audit and Risk Committee reviews and makes recommendations with regard to the appointment and
reappointment of the external auditors. In making these recommendations, consideration is given to auditor
effectiveness and independence, partner rotation and any other factors that may impact the reappointment of the
external auditors. There are no contractual restrictions on the choice of external auditors.
The Audit and Risk Committee is confident that the effectiveness and independence of the external auditors is not
impaired in any way. The Committee will continue to assess the effectiveness and independence of the external
auditors.
The external auditors may perform certain limited non-audit services for the Group. Providing such services are
permissible in line with the requirements of the FRC’s 2019 Ethical Standard. Any such non-audit services require
pre-approval by the Audit and Risk Committee and are only permitted to the extent allowed by relevant laws and
regulations.
The non-audit services, including tax compliance activities and internal audit are provided by an independent
accounting firm. Haysmacintyre LLP continue to review the half year reporting. Full details of auditor's remuneration
are shown in note 4 to the Financial Statements.
Review of effectiveness of External Auditors
An important role of the Committee is to assess the effectiveness of the external audit process. In performing this
assessment, the Committee:
•
reviewed the annual audit plan and considered the auditors performance against that plan along with any
variations to it
• met with the audit engagement partner to review the audit findings and responses received to questions
raised by the Committee
• held regular meetings with the audit engagement partner, including with the absence of executive
management
considered their length of tenure
reviewed the nature and magnitude of non-audit services provided; and
reviewed the external Auditors own independence confirmation presented to the Committee.
•
•
•
Based on the assessment performed, the Committee has recommended to the Board that a resolution to
reappoint Haysmacintyre LLP be proposed at the next Annual General Meeting.
Philip Moses
Chairman of the Audit and Risk Committee
21 March 2022
59
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman
As Chairman of Bigblu Broadband Remuneration Committee, I am pleased to present the Board of Directors’
Remuneration Report for the year ended 30 November 2021, which has been prepared by the Committee and
approved by the Board. In line with the UK reporting regulations, this report is divided into three sections:
• The Annual Statement by the Remuneration Committee Chairman;
• The Directors’ Remuneration Policy, which details the Group’s remuneration policies and their link to Group
strategy, as well as projected pay outcomes under various performance scenarios; and
• The Annual Report on Remuneration, which focuses on our remuneration arrangements and incentive
outcomes for the year under review and how the Committee intends to implement the Remuneration
Policy in FY22 and beyond.
The role of the Remuneration Committee is documented in its Terms of Reference which were reviewed and
adopted by the Board of Directors in May 2016 which are also reviewed from time to time to ensure up to date. The
objectives of the Remuneration Committee are to ensure that the Group's Directors and senior executives are fairly
rewarded for their individual contributions to the Group's overall performance by determining their pay and other
remuneration and to demonstrate to all shareholders that the general policy relating to, and actual remuneration of
individual senior executives of the Group, is set by a committee of the Board members who have no personal
interest in the outcome of the decisions and who will give due regard to the interests of the shareholders and to the
financial and commercial health of the Group.
The Remuneration Committee intends that its policy and practice should align with and support the implementation
of the Group’s strategy and effective risk management for the long term. The policy is intended to motivate the right
behaviours and to ensure that any risk created by the remuneration structure is acceptable to the Committee and
within the risk appetite of the Board and its strategy.
The remuneration package for executive Directors comprises a combination of annual salary, performance bonuses
and share options / Long Term Incentive Plans / Management Incentive Plans with set performance criteria.
Remuneration for non-executive Directors consists of an annual fee with options granted in certain circumstances.
There were additional fees awarded for serving on Board committees and non-executive Directors are not entitled
to annual bonuses.
The members of the Remuneration Committee are Michael Tobin OBE and Paul Howard. The Chief Executive
Officer, the Chief Financial Officer or other Non-Executive Director, may be invited to Remuneration Committee
meetings at the discretion of the Committee. The Committee plans to meet at least twice during the year.
The agenda for Remuneration Committee meetings is prepared in conjunction with the Chairman of the Committee.
Submissions are circulated in advance and may include remuneration benchmark surveys and best practice
guidelines together with papers relating to specific agenda items.
Remuneration policy for FY21 and future years
Bigblu Broadband plc was listed on the Alternative Investments Market (AIM) in May 2015. During the period the
Remuneration Committee reviewed the Group’s remuneration structure to ensure it aligned with the forward-looking
strategy of the Group, is able to motivate and retain the executive team over the next key phase in the Group’s
development post the two successful disposals, and to ensure it takes into account market and best practice for a
listed Group. The remuneration structure for Executive Directors applied throughout the financial year and is carried
forward as appropriate into the new financial year commencing 1 December 2021, is set out in the Remuneration
Policy below. Following the disposal during the year the Committee have undertaken to review the Long-Term
Incentive Plan and Management Incentive Plans for senior executives to ensure their interests are aligned with that
of the shareholders both in the short and medium term.
60
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman (continued)
Remuneration policy for FY21 and future years (continued)
Our remuneration arrangements reflect that we compete for talent in a competitive market against other
telecommunications companies. The Committee has also carefully considered the expectations of our shareholders
in formulating our policy and has included claw back provisions in our incentive schemes for Directors and Board
Members, to align with developing best practice. The overarching principles of our Remuneration Policy are to
provide a competitive package of fixed and variable pay that will enable the Group to ensure it can attract and retain
executives with the right skills and experience to drive the long-term success of the Group.
The Committee believes that our remuneration arrangements can achieve these goals through the application of
stretching performance targets and strong shareholder alignment through our equity incentives.
Remuneration decisions in FY21
The activities of the Committee and key decisions in FY21 are set out below and take into consideration the Disposal
completion in June 2021:
• Executive salaries were reviewed. There was no increase during the year and reduced by 10% in FY22
• The basis and awards under the bonus schemes were updated and linked intrinsically to delivering
Revenue, Adjusted EBITDA and Cash targets.
• Non-Executive Director salaries were reduced by 20% with effect from December 2021.
• A new Management Incentive Plan was implemented to maximise shareholder value post the disposal of
the UK fixed wireless operation, in July 2021.
The Group delivered strong results for the Continuing Operations with revenue at £27.1m (FY20: £23.4m) and
adjusted EBITDA at £4.6m (FY20: £4.1m). Additional uplift bonuses can be earned when performance materially
exceeds targets however none were awarded during the period. Awards were made to various staff including the
CEO and CFO as a result of the disposal of the UK business in June 2021 in recognition of the extensive additional
work performed out with core responsibilities, and the delivery of Shareholder returns in October 2021.
Long-Term Incentive Plan
Following consultation with External Advisors, the Company’s Nominated Advisor and a Panel of Shareholders in
2018 an LTIP was put in place to further ensure Executives are fully aligned with Shareholder Returns and to
remove the subjectivity surrounding Option awards. The basis of the award is in line with best practice and is
calculated by reference to two metrics, actual BBB share price performance and relative performance versus a
basket of similar companies in the following weightings:
• 50% on how the actual BBB share price performs and
• 50% compared to how BBB performs against a basket of similar Companies
61
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman (continued)
No award was made in the current year to Senior Executives instead the Committee, as outlined last year revisited
all incentive plans post last year’s disposal to ensure Senior Executives short, medium and long term Management
Incentive Plans are intrinsically linked to growing shareholder value.
During the course of the year there were no awards under the current LTIP to the Executive Directors (FY20: no
awards).
Directors’ remuneration policy
This section describes the Group’s proposed remuneration structure for Directors which, if approved, will apply for
up to three years from the date of the Annual General Meeting.
The overarching principles of our remuneration policy are to provide a competitive package of fixed and variable
pay that will enable the Group to ensure it has executives with the right skills and experience to drive the success
of the Group, and that their remuneration is linked to shareholder interests and the Group’s long-term success. Our
remuneration philosophy is:
•
•
•
to promote the long-term success of the Group, with stretching performance targets which are rigorously
and consistently applied
to provide appropriate alignment between the Group’s strategic goals, shareholder returns and executive
reward
to have a competitive mix of base salary and short and long-term incentives, with an appropriate proportion
of the package determined by stretching targets linked to the Group’s performance
Executive Directors’ fixed and variable remuneration arrangements have been determined taking into account:
•
•
•
•
the role, experience in the role, and performance of the Executive Director
the location in which the Executive Director is working
remuneration arrangements at UK listed companies of a similar size and complexity
remuneration arrangements at UK telecommunications companies of a similar size and complexity,
including companies with which the Group competes for talent
• best practice guidelines for UK listed companies set by institutional investor bodies
62
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman (continued)
Future policy table
The key components of Executive Directors’ remuneration are as follows:
Fixed Pay
Type
Base
salary
Purpose and link
to
strategy
To attract and retain
talent of
right
calibre and with the
ability to contribute to
strategy, by ensuring
are
salaries
base
competitive
the
in
relevant talent market.
the
Pension
post-
Provide
retirement benefits for
participants in a cost-
efficient and equitable
manner.
Benefits
To provide competitive
benefits for each role.
Operation
Maximum
opportunity
Performance
metrics
performance
Group
market
against
is
expectations
considered
when
determining appropriate
salary levels.
None
None
Executive Director salary
decreases / increases will
normally be in line with those
the wider executive
for
population.
employee
However,
salary
decreases / increases may
be made where there is a
or
change
responsibilities.
higher
role
in
to
The CEO and CFO receive a
matching contribution of *4.5
percent of salary under the
opt-in
the Group
Workplace Pension Scheme.
Subject
the applicable
to
maximum contribution.
The Committee does not
anticipate pension benefits
as being at a cost to the
Group that would exceed 10
percent of base salary,
future
notwithstanding
changes
pension
to
legislation.
and
There is no overall maximum
value set out for benefits.
They are set at a level that is
comparable
to market
practice and appropriate for
individual
Group
circumstances.
The Committee retains the
discretion to amend benefits
in exceptional circumstances
or in circumstances where
the
outside
factors
have
Group’s
(e.g.
materially
increases
insurance
premiums).
control
changed
in
of
reference
Base salaries are usually reviewed
annually, with
to
individual performance, Group
performance,
market
competitiveness, salary decreases
/ increases across the Group and
the position holder’s experience,
competence and criticality to the
business.
Any decreases / increases are
generally
1
effective
December.
from
Pension contributions are provided
by
the Group as part of a
legislatively compliant Workplace
Pension Scheme that requires an
overall contribution of 9% of gross
base salary to be made by Year 3
the scheme. This overall
of
percentage contribution will be
made up from a combination of
contributions from the Executive
Directors and the Group, with a
choice of funding vehicles through
the Group Plan or by
either
contributions being made
to a
personal SIPP chosen and set up
by the Executive Director.
the
Benefits currently
provision of private medical, life
insurance, permanent health and
disability
car
insurance
allowance.
Reasonable
relocation package
including annual family visitation
allowance, legal fees allowance
and health insurance.
Travel and subsistence allowances
in line with the Group Expenses
Policy and other benefits may be
provided based on
individual
circumstances.
include
and
63
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman (continued)
Variable Pay
Type
Bonus
arrangements
and
Purpose
link to
strategy
focus
Aims
to
on
executives
financial
achieving
targets relevant to the
business priorities for
financial period
the
where
and
to
appropriate
outperform
Non-Executive Directors Fees
Operation
Maximum
opportunity
Performance
metrics
targets
The annual bonus will be
based on achievement of
(e.g.,
financial
revenue growth, EBITDA
improvements and cash
metrics.
The Committee
has
discretion to adjust the
formulaic bonus outcome
the
downwards within
limits of
to
ensure alignment of pay
underlying
with
the
performance
business.
the plan,
the
of
vest
The base bonus opportunity
for Executive Directors will
be up to 75 percent of base
salary.
Up to 75 percent of maximum
will
target
performance. Performance
above base performance can
result in additional bonuses
being paid linked to improved
performance - i.e. paying for
themselves.
for
the start of
Typically, performance measures
and targets are set prior to or
the
shortly after
relevant financial period.
At the end of the financial period,
the Remuneration Committee will
determine the extent to which the
targets have been achieved.
Awards are typically delivered in
cash; however, the Committee
has discretion to defer awards in
cash or in shares.
The Committee has discretion
and the contractual legal vehicle,
to reduce or recoup the bonus in
the event of serious
financial
misstatement or misconduct. In
extreme cases of misconduct, the
Committee may claw back annual
bonus
previously
made.
Additional bonuses can be earned
the
at
the sole discretion of
Remuneration Committee
if
exceptional circumstances arise.
payments
Type
Non-
Executive
Directors’
Fees
the
Purpose and link
to
strategy
To
reflect
time
commitment
in
and
preparing
attending meetings,
the
and
duties
responsibilities of the
role
the
and
contribution expected
from
Non-
the
Executive Directors.
for
Operation
Maximum
opportunity
Performance
metrics
None
Any decreases / increases to
Non-Executive Director fees
will be considered as a result
of the outcome of a review
process and
into
taking
account
wider market
factors, e.g. inflation. There
is no prescribed individual
maximum fee.
Further details are set out
below.
in
Monthly fees for Non-Executive
Directors are paid via Payroll and
were reduced by 20% from the
start of December 2021.
Additional fees paid to the
Chairmen of Board Committees
may be paid if there is a material
time commitment
increase
required.
Non-Executive Directors do not
participate in any annual bonus
incentive schemes, nor do they
receive any pension or benefits
travel
than nominal
(other
expenses).
Non-Executive
Directors will participate in the
Company’s
option
schemes.
share
64
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman (continued)
Notes to the policy table
• Revenue growth, adjusted EBITDA and free cash flow metrics are considered to be the best measures
of the Group’s annual performance given our current size and stage of growth and will continue to
determine at least 75% of the achievement criteria for annual bonus awards. The Committee will keep
this under review and may select alternative measures as the Group evolves and strategic priorities
change post the disposal where great attention is paid to the creation of shareholder value.
• Annual bonus targets will be selected prior to, or shortly after, the start of the financial period. Financial
targets will be calibrated with reference to the Group’s budget for the upcoming financial period and the
Group’s performance over the prior financial period.
• Differences in remuneration policy operated for other employees.
• Other senior and key-role employee remuneration has some of the same components as set out in the
policy, being base salary, annual bonus, long-term incentive participation, and pension provision.
However, there is no provision for Medical insurance, Permanent Health Insurance, Life assurance or
Car Allowance for non-Executive employees. Annual bonus and long-term incentive arrangements
share a similar structure and pay-out arrangement, although the mix between performance-based and
time-based awards, and the maximum award, varies by seniority and role.
In recruiting a new Non-Executive Director, the Committee will use the policy as set out in the table below.
Non-Executive Directors
The appointments of each of the Chairman and the Non-Executive Directors are for a fixed term of 3 years, and
subject to one third retirement by rotation and re-election at the AGM. Their letters of appointment set out the
terms of their appointment and are available for inspection upon request. They are not eligible to participate in
the Executive annual bonus scheme, nor do they receive any additional pension or expenses (other than nominal
travel expenses) on top of the fees disclosed below. They do however have eligibility to participate in the
Company’s Share Schemes and Management Incentive Plans. Non-Executive Directors appointment may be
terminated at any time upon written notice or in accordance with the articles and receive no compensation on
termination.
Non-Executive
Director
Role
Appointment date
Re-appointment
date
Term of
appointment
Michael Tobin
Chairman
September 2015
May 2019
Paul Howard
Non-Executive Director
September 2015
May 2019
Christopher Mills Non-Executive Director
May 2019
Philip Moses
Non-Executive Director
May 2020
May 2019
May 2021
3 years
3 years
3 years
3 years
Executive Directors
Each of the Executive Directors entered into a service agreement with the Company as follows.
Executive
Director
Role
Contract date
Re-appointment
Notice period
date
May 2018
May 2021
12 months
12 months
Andrew Walwyn
Chief Executive Officer
May 2015
Frank Waters
Chief Financial Officer
May 2015
65
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2021
Annual statement of the remuneration committee chairman (continued)
Executive Directors (continued)
The Employer is entitled to terminate an Executive Director’s employment by payment of a cash sum in lieu of
notice, equal to (i) the basic salary and bonuses that would have been payable, (ii) the cost that would have
been incurred in providing the Executive Director with medical insurance benefits for any unexpired portion of
the notice period and (iii) the cost that would have been incurred in providing the Executive Director LTIP/ MIP
payments (the ‘‘Payment in Lieu’’) The Company can alternatively choose to continue providing the medical
insurance benefits under item (ii) instead of paying a cash sum representing their cost. The Payment in Lieu can
be paid typically in one lump sum or alternatively monthly instalments over the notice period. The Company’s
policy on termination payments is to consider the circumstances on a case-by-case basis, taking into account
the executive’s contractual terms, the circumstances of termination and any duty to mitigate.
The Committee will continue to monitor market trends and developments over the next year in order to assess
ongoing relevance for the Company’s remuneration practices. The Committee welcomes feedback from our
shareholders as we remain committed to an open and transparent dialogue and hope to receive your support at
the forthcoming AGM. On behalf of the Remuneration Committee.
Michael Tobin
Chairman of the Remuneration Committee
21 March 2022
66
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc
For the year ended 30 November 2020
Opinion
We have audited the financial statements of Bigblu Broadband Plc (the ‘parent company’) and its subsidiaries
(together, the ‘group’) for the year ended 30 November 2021 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated
and Parent Company Statements of Cash Flows, the Consolidated and Parent Company Statements of Changes
in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 November 2021
and of the group’s profit for the year then ended;
• have been properly prepared in accordance with UK adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
An overview of the scope of our audit
Our audit scope included all components. Our audit work therefore covered 100% of group revenue, group profit
and total group assets and liabilities. It was performed to the materiality levels set out below for the Group and
Parent Company, with component materiality adopted for audits of non-UK subsidiaries conducted by component
auditors. The audits of Bigblu Norge AS and SkyMesh Pty Ltd (and its directly held subsidiaries) were performed
by component auditors in accordance with our group audit instructions. BBB Ausco Limited and BBB Norco Limited
are dormant entities and were audited in accordance with group materiality as set out below.
We communicated with both the directors and the Audit Committee our planned audit work via our audit planning
report and relevant discussion.
We communicated audit progress with the audit committee through interim audit progress meetings. We have
communicated any issues to the audit committee and the directors in our final audit findings report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified. These matters included those which had the greatest effect on the overall
audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
67
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2021
Audit risk
How we responded to the risk
Impairment of goodwill
The group recognised goodwill of £5,523,000 as at
30 November 2021 (2020: £11,837,000).
Our audit work included, but was not restricted to, the following:
There is a risk that goodwill is impaired and therefore
materially overstated.
• We assessed management’s impairment review process
and performed analysis which formed the basis of our
challenge of management’s assumptions.
For
the year ended 30 November 2021,
management performed an impairment review for
each of the cash-generating units (CGUs) to which
goodwill relates.
The assessment was based on the future cash flows
of each CGU using either a discounted cash flow
models or fair value assessments.
Significant management judgement and estimation
uncertainty is involved in this area, where the
primary inputs are:
• Estimating future cash flows;
• Selecting an appropriate discount rate and
• We verified the arithmetical accuracy of the impairment
model.
• We reviewed management’s forecasted cash flows that fed
into discounted cash
flow models and challenged
assumptions around these with reference to historic results,
market trends and future expectations.
• We assessed the appropriateness of the growth and
discount rates used by management and challenged
Management on those that fell outside of our expectations.
• We considered the basis from which fair values were
derived and considered whether they were reasonable.
variables with the cash flow model; and
• Selecting appropriate valuation methodologies
and relevant market-based valuation multiples.
• We reviewed the carrying value of goodwill to consider
whether amounts relating to subsidiaries disposed of during
the year had been appropriately derecognised.
Disposal of subsidiary entities
The Group underwent a significant restructure during
the year having disposed of material subsidiary
entities.
Our audit work included, but was not restricted to, the following:
• We reviewed calculations for the gain on disposal and
ensured that this was in line with the relevant sale and
purchase agreement.
The Group has presented the results of these
subsidiaries within discontinued operations, also
recognising a gain on their disposal of £25.9m.
• We performed substantive and analytical procedures on the
individual balance sheets of the companies disposed of at
the time of disposal.
There is a risk of an inaccurate allocation of results
between continuing and discontinued operations.
There is also a risk of misstatement of the gain on
disposal either through inaccurate calculation of
consideration receivable, or misallocation of income
and expenditure (arising from either continuing or
discontinued operations) to the disposal gain
• We considered the allocation of costs to discontinued
operations and the appropriateness of the presentation of
these transactions.
• We reviewed amounts recognised in relation to the
consideration receivable position and the appropriateness
of its recognition as at 30 November 2021.
• We also reviewed consideration adjustments and costs
associated with disposals of subsidiaries made during the
year ended 30 November 2020 to ensure that have been
appropriately presented within gains on disposal of
discontinued operations.
68
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2021
Audit risk
How we responded to the risk
Impairment of parent company
valuation
investment
The parent company holds investments in two wholly
owned
trading subsidiaries, SkyMesh Pty Ltd
(“SkyMesh”) and Bigblu Norge as (“BBN”).
Our audit work included, but was not restricted to, the following:
• We assessed management’s impairment review process
to challenge management’s
and performed analysis
assumptions.
There is a risk that these investments are impaired
and therefore materially overstated.
• We verified the arithmetical accuracy of the impairment
models.
For the year ended 30 November 2021, management
considered whether indicators of impairment existed
for each cash-generating unit (CGU).
• We reviewed management’s discounted cash flow valuation
model and challenged assumptions around these with
reference to historic results, market trends and future
expectations.
Where
relevant, valuation assessments were
performed in relation by management to determine the
recoverable value of each CGU.
Significant management judgement and estimation
uncertainty is involved in this area, where the primary
inputs are:
• Estimating future cash flows;
• Comparable market-based valuation metrics;
• Selecting an appropriate discount rate and
variables within discounted cash flow models; and
• Selectin of appropriate valuation methodologies.
• We assessed the appropriateness of the growth and
discount rates used by management and challenged
management on those that fell outside of our expectations.
• We
reviewed management’s
methodologies and assessed and challenged
appropriateness of the assumptions used within them.
fair value assessment
the
Revenue recognition
Our audit work included, but was not restricted to, the following:
The Group generates revenue from the sale of airtime,
data, hardware and installation in connection with the
supply of broadband services.
• We issued group audit instructions, which identified revenue
as a significant risk area, to component auditors and
reviewed their relevant reporting to us.
There is a risk therefore that revenue is inappropriately
recognised or is incorrectly apportioned to a product
or service.
• We reviewed the working papers relevant to the Group’s
revenue recognition prepared by component auditors to
ensure sufficient audit evidence had been obtained at
component level.
• We considered the nature of Group revenue and whether it
had been recognised appropriately in line with the discharge
of service obligations as set out by IFRS 15: Revenue from
Contracts with Customers.
• We reviewed disclosures relating to revenue recognition
within the notes to the financial statements to ensure they
are comprehensive and accurate.
69
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2021
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, in evaluating the effect of
misstatements and in forming an opinion. For the purpose of determining whether the financial statements are free
from material misstatement, we define materiality as the magnitude of a misstatement or an omission from the
financial statements, or related disclosures, that would make it probable that the judgement of a reasonable person,
relying on the information would have been changed or influenced by the misstatement or omission. We also
determine a level of performance materiality, which we used to determine the extent of testing need, to reduce to
an appropriately low level the risk that the aggregate of uncorrected and undetected misstatement exceeds
materiality for the financial statements as a whole.
The materiality for the Group financial statements as a whole was set at £300,000 (30 November 2020: £300,000).
This was determined with reference to 1.1% of continuing group revenue.
On the basis of our risk assessment and review of the Group’s control environment, performance materiality was
set at 75% of materiality, being £225,000 (30 November 2020 – 75% of materiality being £225,000).
The reporting threshold to the Audit and Risk Committee was set as 5% of materiality, being £15,000 (30 November
2020 – £15,000). If in our opinion differences below this level warranted reporting on qualitative grounds, these
would also be reported.
The materiality for the Parent Company financial statements was set at £300,000 (30 November 2020: £300,000).
Our materiality was set at £300,000 so as to ensure component materiality did not exceed group materiality.
On the basis of our risk assessment and review of the Parent Company’s control environment, performance
materiality was set at 75% of materiality, being £225,000 (30 December 2020 – 75% of materiality being £225,000).
The reporting threshold to the Audit and Risk Committee was set as 5% of materiality, being £15,000 (30 November
2020 – £15,000). If in our opinion differences below this level warranted reporting on qualitative grounds, these
would also be reported.
Other information
The directors are responsible for the other information. The other information comprises the information included in
the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
70
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2021
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report or the directors’
report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns;
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
71
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2021
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with
laws and regulations and we considered the extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations that have a direct impact on the preparation
of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls) and determined that the principal risks were related to posting
inappropriate journal entries and management bias in accounting estimates, including the presentation of revenue
and expenditure. Audit procedures performed by the engagement team included:
•
•
•
•
•
Inspecting correspondence with tax authorities;
Discussions with management including consideration of known or suspected instances of non-compliance
with laws and regulation and fraud;
Evaluating management’s controls designed to prevent and detect irregularities;
Identifying and testing journals, in particular journal entries posted with unusual account combinations,
postings by unusual users or with unusual descriptions; and
Challenging assumptions and judgements made by management in their critical accounting estimates,
particularly relating to impairment of intangible assets, investment valuation and presentation of revenue
and expenditure.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those
matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we have formed.
Christopher Cork
(Senior Statutory Auditor)
For and on behalf of Haysmacintyre LLP
Statutory Auditors
21 March 2022
10 Queen Street Place
London
EC4R 1AG
72
Bigblu Broadband plc
Consolidated Statement of Comprehensive Income
For the year ended 30 November 2021
Registered Number 09223439
Continuing Operations
Revenue from contracts with customers
Cost of sales
Gross profit
Distribution expenses
Administrative expenses
Operating profit
Finance costs
(Loss) before tax
Taxation credit / (charge) on operations
Notes
2
2021
£’000
27,067
(14,899)
2020
£’000
23,428
(12,594)
12,168
10,834
(8,734)
(4,332)
(898)
(798)
(1,696)
76
3
7
8
(6,494)
(2,057)
2,283
(6,834)
(4,551)
(262)
(Loss) from continuing operations
(1,620)
(4,813)
Profit from discontinued operations
13
28,373
14,244
Profit for the year
26,753
9,431
Other comprehensive expense
Foreign currency translation difference
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Owners of Bigblu Broadband Plc
Non-controlling interests
Earnings per share from profit attributable to the ordinary equity
holders of the company
(355)
26,398
26,682
(284)
(202)
9,229
9,456
(227)
Total - Basic EPS
Total - Diluted EPS
Continuing operations – Basic EPS
Continuing operations – Diluted EPS
Discontinued operations – Basic EPS
Discontinued operations – Diluted EPS
9
9
46.9p
45.6p
(2.8p)
(2.7p)
49.7p
48.3p
16.8p
16.6p
(8.3p)
(8.3p)
25.1p
24.9p
Adjusted earnings per share
attributable to the ordinary equity holders of the company
from continuing operations
Continuing operations - Adjusted Basic EPS
Continuing operations - Adjusted Diluted EPS
9
9
4.3p
4.2p
1.9p
1.9p
The notes on pages 80 to 113 form an integral part of these financial statements.
73
Bigblu Broadband plc
Consolidated Statement of Financial Position
For the year ended 30 November 2021
Registered Number 09223439
Notes
2021
£’000
Restated 2020
£’000
Restated 2019
£’000
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Deferred tax asset
Total non-current assets
Current assets
Cash and cash equivalents
Inventory
Trade and other receivables
Total current assets
Total assets
Current liabilities
Trade and other payables
Provisions for liabilities and charges
Total current liabilities
Non-current liabilities
Other payables
Loans
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Share option reserve
Capital redemption reserve
Other equity reserve
Foreign exchange translation reserve
Reverse acquisition reserve
Listing cost reserve
Merger relief reserve
Retained losses
10
11
12
19
14
15
16
17
17
18
18
19
20
20
21
21
21
21
21
21
21
Capital and reserves attributable to owners of Bigblu
Broadband Plc
Non-controlling interests
Total equity
Approved by the Board on 21 March 2022 and signed on its behalf by:
4,090
5,576
5,672
709
16,047
5,201
699
4,917
10,817
26,864
(9,420)
(685)
(10,105)
(835)
-
(13)
(848)
(10,953)
15,911
8,749
8,589
-
26,120
-
(2,430)
(3,317)
(219)
-
(21,581)
15,911
-
15,911
10,876
11,968
-
501
23,345
15,306
896
3,798
20,000
43,345
(12,507)
(1,468)
(13,975)
(2,628)
(7,877)
(104)
(10,609)
(24,584)
18,761
8,638
34,180
2,614
-
1,294
(2,569)
(3,317)
(219)
5,972
(32,403)
14,190
4,571
18,761
15,865
29,362
52
643
45,922
5,989
3,911
8,325
18,225
64,147
(32,461)
(328)
(32,789)
(4,409)
(20,187)
(234)
(24,830)
(57,619)
6,528
8,636
34,161
2,282
-
271
(2,225)
(3,317)
(219)
5,972
(42,412)
3,149
3,379
6,528
Andrew Walwyn
Chief Executive Officer The notes on pages 80 to 113 form an integral part of these financial statements.
74
Bigblu Broadband plc
Company Statement of Financial Position
For the year ended 30 November 2021 Registered Number 09223439
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Liabilities
Current liabilities
Trade and other payables
Provisions for liabilities and charges
Total current liabilities
Non-current liabilities
Non-current loans
Net assets
2021
£’000
Restated
2020
£’000
Restated
2019
£’000
Notes
10
11
12
14
16
17
17
18
4
53
44,201
44,258
1,550
3,924
5,474
-
-
52,393
52,393
10,700
1,247
11,947
-
-
18,018
18,018
-
24,466
24,466
(3,127)
(685)
(3,812)
(2,371)
(1,468)
(3,839)
(3,556)
(328)
(3,884)
-
(7,877)
(19,978)
45,920
52,624
18,622
Equity
Share capital
Share premium
Share option reserve
Capital redemption reserve
Other equity reserve
Listing cost reserve
Merger relief reserve
20
20
21
21
21
21
21
8,749
8,589
-
26,120
-
(219)
-
2,681
8,638
34,180
2,614
-
1,294
(219)
5,972
145
8,636
34,161
2,282
-
271
(219)
5,972
(32,481)
Retained profit / (loss)
Total equity
45,920
52,624
18,622
In accordance with section 408 of the Companies Act 2006 the parent company has not presented its own Income
Statement, which resulted in a profit after tax of £18.8m (2020: profit £32.6m).
Approved by the Board on 21 March 2022 and signed on its behalf by:
Andrew Walwyn
Chief Executive Officer
The notes on pages 80 to 113 form an integral part of these financial statements.
75
Bigblu Broadband plc
Consolidated Statement of Cash Flows
For the year ended 30 November 2021
Loss after tax from Continuing operations
Profit after tax from Discontinued operations
Profit for the year including discontinued operations
Adjustments for:
Interest charge
Gain on disposal of subsidiaries
Goodwill impairment
Amortisation of intangible assets
Release of grant creditors
Depreciation of property, plant and equipment - owned assets
Depreciation of property, plant and equipment - ROU assets
Tax (credit) / charge
Share based payments
Foreign exchange variance and other non-cash items
Decrease in inventories
(Increase) / Decrease in trade and other receivables
Increase / (Decrease) in trade and other payables
Gain on disposals of fixed assets
Cash (used in) / generated from operations
Interest paid
Tax paid
Net cash outflow from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of intangibles
Cash transferred out of group in disposed of subsidiaries
Proceeds from sale of property, plant and equipment
Proceeds from sale of subsidiary
Net cash generated from investing activities
Financing activities
Proceeds from issue of ordinary share capital
Return of capital to shareholders
Proceeds from bank revolving credit facility
Loans (paid)
Investment by non-controlling interest
Principal elements of lease payments
Net cash outflow generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
7
13
11
11
2
10
10
8
24
10
11
13
2021
£’000
(1,620)
28,373
26,753
852
(28,942)
-
21
(285)
1,834
836
(76)
163
(332)
39
(2,418)
829
(8)
(734)
(411)
(495)
2020
£’000
(4,813)
14,244
9,431
7,108
(18,928)
213
1,626
(772)
3,897
1,680
316
332
(1,110)
1,113
4,527
(6,764)
(167)
2,502
(8,171)
(1)
(1,640)
(5,670)
(6,009)
(53)
(2,533)
92
31,094
(8,679)
(907)
(1,035)
45
37,222
22,591
26,646
435
(26,120)
2,000
(8,400)
2,000
(971)
(31,056)
(10,105)
15,306
5,201
21
-
29,400
(41,353)
1,972
(1,699)
(11,659)
9,317
5,989
15,306
Note that the presentation of the cashflow takes into consideration the combined Continuing and Discontinued
movements in cash. See also the reconciliation of the movement in net debt on page 19 of the Strategic Report. The
notes on pages 80 to 113 form an integral part of these financial statements.
76
Bigblu Broadband plc
Company Statement of Cash Flows
For the year ended 30 November 2021
Profit for the year
Adjustments for:
Interest charge
Gain on disposal of investments
Impairment charges
Depreciation
Share based payments
(Increase) in trade and other receivables
Decrease in trade and other payables
Cash (outflow)/inflow from operating activities
Investing activities
Proceeds from sale of subsidiary
Purchase of property, plant and equipment
Purchase of intangibles
Net cash generated in investing activities
Financing activities
Proceeds from issue of ordinary share capital
Return of capital to shareholders
Proceeds from bank revolving credit facility
Repayment of bank revolving credit facility
Repayment of loans
Repayment of BGF redemption premium
Interest paid
BGF penalty interest
Net cash outflow from financing activities
2021
£’000
Restated
2020
£’000
18,818
32,626
710
(24,301)
1,471
1
163
(2,749)
(27)
(5,914)
31,094
(5)
(53)
31,036
435
(26,120)
-
-
(8,400)
-
(187)
-
(34,272)
6,680
-
-
-
332
(9,323)
(45)
30,270
-
-
-
-
21
-
29,400
(29,250)
(12,000)
(5,511)
(1,030)
(1,200)
(19,570)
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(9,150)
10,700
10,700
-
1,550
10,700
The notes on pages 80 to 113 form an integral part of these financial statements.
77
Bigblu Broadband plc
Consolidated Statement of Changes in Equity
For the year ended 30 November 2021
Note
Share
capital
£’000
Share
premium
£’000
8,636
23,900
1
-
10,261
8,636
34,161
18
12
23
18
12
23
13
-
2
-
-
-
-
19
-
-
-
8,638
34,180
-
111
-
324
-
-
-
-
-
-
-
-
At 1 December 2019 as
previously stated
Prior year reclassification
Restated balance at
start of financial year
Profit / (Loss) for the year
Issue of shares
Acquisition of shares in
subsidiary by non-
controlling interest
Equity settled share-
based payments
Other comprehensive
expense
Restated at 30
November 2020
Profit / (Loss) for the year
Issue of shares
Acquisition of shares in
subsidiary by non-
controlling interest
Equity settled share-
based payments
Disposal of subsidiary
Other comprehensive
expense
Return of capital
At 30 November 2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Capital
redemption
reserve
£’000
Share
option
reserve
£’000
Retained
losses
£’000
Other
equity
reserve
£000
Foreign
exchange
reserve
£’000
Reverse
acquisition
reserve
£’000
Listing
cost
reserve
£’000
Merger
relief
reserve
£’000
Non-
controllin
g Interest
£’000
Total
£’000
Total
equity
£’000
2,282
(42,412)
271
(2,225)
(3,317)
(219)
16,233
3,149
3,379
6,528
-
-
-
-
-
-
(10,261)
-
-
-
2,282
(42,412)
271
(2,225)
(3,317)
(219)
5,972
-
-
-
9,660
-
553
-
-
-
332
-
1,023
-
-
-
-
-
(204)
-
(344)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,614
(32,403)
1,294
(2,569)
(3,317)
(219)
5,972
-
-
-
163
-
-
27,037
-
422
-
-
(355)
(16,282)
(21,581)
-
-
-
-
-
139
-
(2,430)
-
-
-
-
-
-
(1,294)
-
78
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,317)
-
(219)
(5,972)
-
3,149
9,660
21
3,379
6,528
(227)
9,433
-
21
553
1,419
1,972
1,355
(548)
14,190
27,037
435
-
-
1,355
(548)
4,571
18,761
(284)
26,753
-
435
422
1,578
2,000
163
-
-
163
(5,865)
(5,865)
(216)
(26,120)
15,911
-
-
-
(216)
(26,120)
15,911
The notes on pages 80 to 113 form an integral part of these financial statements.
-
8,749
(25,915)
8,589
26,120
26,120
(2,777)
-
Bigblu Broadband plc
Company Statement of Changes in Equity
For the year ended 30 November 2021
Share
capital
£’000
Share
premium
£’000
Note
Capital
redemption
reserve
£’000
Share
option
reserve
£’000
Listing
cost
reserve
£’000
Other
equity
reserve
£’000
Merger
relief
reserve
£’000
Retained
profits/
(losses)
£’000
Total
equity
£’000
8,636
23,900
1
-
10,261
8,636
34,161
-
2
-
-
19
-
8,638
34,180
-
-
111
324
At 1 December
2019 as previously
stated
Prior year
reclassification
Restated balance
at start of financial
year
Profit for the year
Issue of shares
Equity-settled share
- based payments
Restated at 30
November 2020
Profit for the year
Issue of shares
Equity-settled share
- based payments
Return of capital
At 30 November
2021
24
20
24
-
-
-
-
-
-
-
-
-
-
2,282
(219)
271
16,233
(32,481)
18,622
-
-
-
(10,261)
-
-
2,282
(219)
271
5,972
(32,481)
18,622
-
-
332
-
-
-
-
-
1,023
-
-
-
32,626
32,626
-
-
21
1,355
2,614
(219)
1,294
5,972
145
52,624
-
-
-
-
-
-
-
-
-
-
-
-
18,818
18,818
-
-
435
163
(1,294)
(5,972)
(16,282)
(26,120)
-
-
-
163
(25,915)
26,120
(2,777)
8,749
8,589
26,120
-
(219)
-
-
2,681
45,920
The notes on pages 80 to 113 form an integral part of these financial statements.
79
Bigblu Broadband plc
Notes to the Financial Statements
For the year ended 30 November 2021
1.
Accounting Policies
General information and basis of preparation
Bigblu Broadband plc is a public limited company, incorporated and domiciled in England and Wales under
the Companies Act 2006. The address of its registered office is 6th Floor, 60 Gracechurch Street, London,
EC3V 0HR. The Company’s ordinary shares are traded on the AIM Market operated by the London Stock
Exchange. The financial statements of Bigblu Broadband plc for the year ended 30 November 2021 were
authorised for issue by the Board on 21 March 2022 and the balance sheets signed on the Board’s behalf
by Andrew Walwyn.
The nature of the Group’s operations and its principal activities is the provision of satellite and wireless
broadband telecommunications and associated / related services and products.
The Group prepares its consolidated financial statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the EU. The financial statements have been prepared on the
historical cost basis.
The consolidated financial statements are for the 12 months to 30 November 2021. This review covers the
consolidated results of Bigblu Broadband plc and its subsidiary undertakings from the date of acquisition.
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 years presented in these financial
statements, except as stated below.
Standards issued and applied for the first time in 2021
The following new and revised Standards and Interpretations have been adopted in the current year.
- Definition of Material (Amendments to IAS 1 and IAS 8)
The adoption of this standard has not had a material impact on the financial statements.
Standards issued and not yet effective
The following new and revised Standards and Interpretations are issued. The Group intends to adopt these
standards in 2022 and are not currently effective:
- Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
- Covid-19-Related Rent Concessions (Amendment to IFRS 16)
Of the standards and interpretations in issue but not yet effective, none is expected to have a material
impact on the results and financial position of the Group.
80
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
Prior year reclassification
The prior year reclassification 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 portion of shares allotted 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, and a restatement of reserves as at 1 October 2019 has been made
accordingly. Net assets and results for both periods presented in these financial statements are not
impacted by this adjustment
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance
and position are set out in the Strategic Report on pages 3 to 33. The financial position of the Group, its
cash flows and liquidity position are described in the Finance Review on pages 10 to 22. In addition note
25 to the financial statement includes the Group’s objectives, policies and processes for managing its
capital, its financial risk management objectives, details of its financial instruments and its exposures to
credit risk and liquidity risk.
As at 30 November 2021 the Group generated an adjusted EBITDA from continuing operations before a
number of non-cash and start-up costs expenses as shown on page 16, of £4.6m (2020: £4.1m), and with
cash inflow from operations before interest, tax and capital expenditure, of £5.2m (2020: outflow of £0.4m)
and a net reduction in cash and cash equivalents of £10.1m in the year (2020: increase £9.3m). The Group
balance sheet showed net cash and cash equivalents at 30 November 2021 of £5.2m (2020: £15.3m).
Having reviewed the Group’s budgets, projections, and funding requirements, and taking account of
reasonable possible changes in trading performance over the next twelve months, the Directors believe
they have reasonable grounds for stating that the Group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis
in preparing the Annual Report and Accounts.
The Board has concluded that no matters have come to its attention which suggest that the Group 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, ARPU and Churn are in fact showing a positive
position compared to prior year and budget as a result of each government’s response to COVID-19
resulting in the remote working position of individuals across our key territories. The forecasts for the
combined Group projections, taking account of reasonably possible changes in trading performance,
indicate that the Group 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.
As a consequence, the Board believes that the Group is well placed to manage its business risks, and
longer-term strategic objectives, successfully.
Revenue
Revenue is recognised at an amount that reflects the consideration to which the entity expects to be entitled
in exchange for transferring goods or services to a customer net of sales taxes and discounts. The Group
principally obtains revenue from providing the following telecommunications services: airtime
81
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (Continued)
usage, rental of equipment and other service charges, connection fees and equipment sales. Customers
can acquire either single or multiple products and services, with the principal service being the provision of
airtime. Airtime usage represents the monthly or other periodic subscription charge for use of the Satellite
or Fixed Wireless broadband solution that we provide. These are incremental amounts selected by the
customer independent of their decision whether to purchase or rent equipment. The performance obligation
is discharged by ensuring that the service contracted for is available throughout the invoiced period and
revenue is recognised on an even basis over the period during which the airtime is provided. We describe
this as recurring revenue, by which we mean that it is contracted for a period of time and can be renewed.
Service charges include rental of equipment where the customer has not purchased it outright. The
performance obligation is fulfilled by ongoing availability of the equipment in a working condition and is
accounted for over the contracted period during which the customer has the right of use. Usually, rental
charges are made monthly in advance. Where the period charged for includes a number of days after the
end of the accounting period, we treat the revenue for those days as being deferred, calculated on a
prorated daily basis. Other service charges also include sundry fees, such as charges for non-return of
rental equipment, all of which are accounted for at a point in time when the relevant performance obligation
is satisfied by an identified action (see below in this section for further detail).
Connection fees refer to the installation of Satellite or Fixed Wireless receiving equipment charged to our
customer, plus revenue received from our third-party satellite providers in the form of an activation rebate
for every new connection. Distinct performance obligations apply to each of these charges and we account
for the revenue at a point in time when the relevant action to satisfy these obligations is performed. The
primary driver of this revenue is the activation of the services on our suppliers’ networks.
Equipment sales primarily refer to the purchase of all hardware purchased by the customer and typically
includes such items as satellite dishes, modems, transmit and receive integrated assemblies (“TRIA’s”),
poles and routers or other similar equipment. The performance obligation is to deliver the product or
products to the customer as distinct from activating a customer to the broadband service. Such products
are typically despatched same day or within 24 hours and so we account for these despatches as revenue
at the point in time when delivery to the customer is performed and the performance obligation is complete.
However, note that in the majority of the group’s contracts equipment is supplied to customers in exchange
for a periodic rental, which is subject to a different performance obligation as described above.
Foreign currency
For the purpose of the consolidated financial statements, the results and financial position of each Group
company are expressed in Pounds Sterling, which is the functional currency of the Group, and the
presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the
dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange
differences arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in profit and loss for the year.
82
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and
expense items are translated at the average monthly rate of exchange ruling at the date of the transaction,
unless exchange rates fluctuate significantly during that month, in which case the exchange rates at the
date of transactions are used.
Property, plant and equipment
Property, plant, and equipment are stated at cost less accumulated depreciation and impairment losses, if
any.
Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets
over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or
is retired from active use unless the asset is fully depreciated.
Land
Building improvements
Fixtures, fittings & infrastructure 10% - 25% on cost
IT hardware and software
Motor vehicles
Rental Stock
25% on cost
25% on cost
25% on cost
0% on cost
20% on cost
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the
end of each reporting year to ensure that the amounts, method and years of depreciation are consistent
with previous estimates and the expected pattern of consumption of the future economic benefits embodied
in the items of the property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred, and it is probable that the future economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount
of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred. Gains or losses on disposal are included in Statement
of Comprehensive Income.
Goodwill
Goodwill on acquisitions comprises the excess of the aggregate of the fair value of the consideration
transferred, the fair value of any previously held interests, and the recognised value of the non-controlling
interest in the acquiree, over the net of the acquisition date amounts of the identifiable assets acquired and
liabilities assumed.
Goodwill is carried at cost less accumulated impairment losses. Goodwill is tested for impairment annually
or more frequently if events or changes in circumstances indicate a potential impairment and using discount
cashflow valuations based on future operating profits. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.
83
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
Intangible Assets and Amortisation
Goodwill and Intellectual Property are reviewed annually for impairment and the carrying value is reduced
accordingly. Other intangible assets are amortised from the date they are available for use over their
estimated useful lives as per below and this is charged to profit or loss on a straight-line basis:
• Customer Contracts – 2 years
• Software – 3 years
Intangible assets recognised in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date.
Amortisation is charged to profit or loss on a straight-line basis (Within administration expenses) over the
estimated useful lives of the intangible asset unless such lives are indefinite. These charges are included
in other expenses in profit or loss. Intangible assets with an indefinite useful life are tested for impairment
annually. Other intangible assets are amortised from the date they are available for use. The useful lives
are as follows:
• Customer Contracts – 2 years
Intellectual Property – 3 years
•
Investments
Investments are recorded at cost. Investments are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be fully recoverable. Investments in subsidiaries
are stated at cost and reviewed for impairment on an annual basis.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on
a first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all
estimated costs of completion and costs to make the sale.
Trade and Other Receivables
Trade and other receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Trade and other receivables are measured at amortised cost less
impairment losses.
The collectability of debt is assessed on a monthly basis such that individual and collective impairment
provisions are made as and when required.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits and other short-term, highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk
of changes in value.
84
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
Trade and Other Payables
Trade and other payables are obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. Accounts payables are classified as current liabilities if payment
is due within one year. If not, they are presented as non-current liabilities. Trade payables are recognised
initially at fair value and subsequently measured at amortised cost using the effective interest method.
Impairment of Non-Financial Assets
The Group assesses annually whether there is any indication that any of its assets have been impaired. If
such indication exists, the asset’s recoverable amount is estimated and compared to its carrying value.
Where it is impossible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the smallest cash-generating unit to which the asset is allocated. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount an impairment
loss is recognised immediately in profit or loss, unless the asset is carried at a revalued amount, in which
case the impairment loss is recognised as revaluation decrease. For goodwill, intangible assets that have an
indefinite life, and intangible assets not yet available for use, the recoverable amount is estimated annually
and at the end of each reporting year if there is an indication of impairment.
Share based payments
The Group operates share option schemes in which certain employees of the Group can be awarded share
options in return for services provided to Group. The fair value of the employee services received in exchange
for the grant of share options is recognised as an expense over the vesting period.
Where share options and warrants are issued to providers of other services or financing, the fair value
ascribed to such services or financing is attributed to the options and recognised over the provision of the
relevant obligation.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can
be made of the amount of the obligation.
Where it is considered possible, rather than probable, that the Group will be required to settle an obligation
arising from a past event, or the amount required to make settlement cannot be reliably estimated, a
contingent liability is disclosed but no associated amount is recognised in the Balance sheet.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the Balance Sheet date, taking into account the risks and uncertainties surrounding the
obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of
money is material).
85
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1. Accounting Policies (continued)
Financial Instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset,
a financial liability, or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are recognised when the Group becomes a party to the contractual provisions of the
instrument. Financial instruments are recognised initially at fair value plus transactions costs that are directly
attributable to the acquisition or issue of the financial instrument, except for financial assets at fair value
through profit or loss, which are initially measured at fair value, excluding transaction costs (which is
recognised in profit or loss). Financial assets are de-recognised when the rights to receive cash flows from
the investments have expired or have been transferred and the Group has transferred substantially all risk
and rewards of ownership.
Equity Instruments
Equity instruments issued by the Group are recorded at the value of proceeds received, net of costs directly
attributable to the issue of the instruments.
Leases
As a lessee
The Group leases various offices, warehouses, items of equipment and vehicles. Bigblu Norge also lease
space for locating equipment for their fixed wireless network infrastructures and fibre comprising part of
their backbone networks.
As indicated above the Group has adopted IFRS 16 Leases from 1 December 2018 resulting in a change
of accounting policy. Until 30 November 2018 leases of property, plant and equipment where the Group,
as lessee, had substantially all the risks and rewards of ownership, were classified as finance leases.
Leases in which a significant portion of the risks and rewards of ownership were not transferred to the
Group as lessee were classified as operating leases (note 21). Payments made under operating leases
(net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over
the period of the lease.
Under the current policy the Group assesses whether a contract contains a lease, at the date of its inception.
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets. For these leases, the Group recognises the lease
payments as an operating expense on a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased
asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the
commencement date, discounted by using the rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is
used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain
an asset of similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
86
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
Leases (continued)
Lease payments included in the measurement of the lease liability comprise:
•
•
Fixed lease payments (including in-substance fixed payments), less any lease incentives.
variable lease payment that are based on an index or a rate, initially measured using the index or rate
as at the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that
option.
•
•
•
The lease liability is included in payables in the Statement of Financial Position under either Current or Non-
Current Liabilities according to when the future lease payments fall due.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and by reducing the carrying amount to reflect the
payments made.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term
on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset’s useful life.
The right-of-use assets are included in Property, plant and equipment in the Statement of Financial Position.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets
are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a
lease term of 12 months or less. Low-value assets comprise rental of small amounts of space for locating
network infrastructure equipment and small items of office equipment. During 2021 the amount accounted
for as low value assets was £57k (2020: £65k) primarily as a result of excluding leases for space to locate
repeater equipment owned by Bigblu Norge with an individual annual cost of less than £500.
As a lessor
Lease income from operating leases where the Group is a lessor is recognised in income on a straight line
basis over the lease term (note 22) Initial direct costs incurred in obtaining an operating lease are added to
the carrying amount of the underlying asset and recognised as expense over the lease term on the same
basis as lease income. The respective leased assets are included in the balance sheet based on their
nature.
87
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of
Comprehensive Income, except that a charge attributable to an item of income and expense recognised as
other comprehensive income or to an item recognised directly in equity is also recognised in other
comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or
substantively enacted by the reporting date in the countries where the Group operates and generates
income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not
reversed by the Statement of Financial Position date, except that:
• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered
against the reversal of deferred tax liabilities or other future taxable profits; and
• Any deferred tax balances are reversed if and when all conditions for retaining associated tax
allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business
combinations, when deferred tax is recognised on the differences between the fair values of assets acquired
and the future tax deductions available for them and the differences between the fair values of liabilities
acquired and the amount that will be assessed for tax. Deferred tax is determined using rates and laws
that have been enacted or substantively enacted by the reporting date.
Employee Entitlements
Liabilities for wages and salaries, including non-monetary benefits for annual leave, which is expected to
be settled within 12 months of the reporting date are recognised in other payables in respect of employee’s
services up to the reporting date and are measured at the amounts expected to be paid when the liabilities
are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable. The liabilities for employee entitlements are carried at the present
value of the estimated future cash flows.
Pensions
The Group operates a defined contribution scheme, the pension cost charge represents the contributions
payable.
Research & Development
Expenditure incurred at the research stage is written off to the income statement as an expense when
incurred. An intangible asset arising from development is capitalised when the Company demonstrates
technical feasibility of completing the intangible asset, intention to complete and use or sell the asset, ability
to use or sell the asset, existence of a market or, if to be used internally, the usefulness of the asset,
availability of adequate technical, financial, and other resources to complete the asset and the cost of the
asset can be measured reliably.
88
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
1.
Accounting Policies (continued)
Government Grants
Grants are received as a subsidy towards both assets and expenditure. Grants in relation to assets are
initially recognised as deferred income and released to the Statement of Comprehensive Income over the
useful life of the asset. Grants in relation to expenditure are initially recognised as deferred income and
released to the Statement of Comprehensive Income to match the related costs.
Discontinued Operations
Discontinued operations are a component of the Group that has been disposed of and that represents a
separate major line of business or geographical area of operations. The gain on disposal reported in the
current financial year takes into consideration the proceeds less the carrying value of the net assets position
at the date of disposal for discontinued operations, and all associated costs considered incremental and
directly attributable to the disposal transaction. The results of discontinued operations are presented
separately in the Consolidated Statement of Comprehensive Income. Cash flows associated with
discontinued operations are presented within the Consolidated Statement of Cash flows, with analysis of
the elements related to discontinued operations presented separately in note 13.
Critical accounting judgements and key areas of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectation of future events that are believed to be reasonable under the circumstances
(a) Property, plant and equipment
Depreciation is derived using estimates of its expected useful life and residual value, which are
reviewed annually. Management determines useful lives and residual values based on experience
with similar assets.
(b) Share based compensation
The Group issues equity settled share based payments to certain Directors and employees, which
have included grants of shares and options in the current year. Equity settled share based payments
are measured at fair value at the date of grant, with the charge being recognised within the statement
of comprehensive income over the year of service to which the grant relates.
The fair value is measured using a Black-Scholes framework. The Directors have used judgement in
the calculation of the fair values of the share based compensation which has been granted during
the year, and different assumptions in the model would change the financial result of the business.
(c) Forecasting
The Group prepares medium-term forecasts based on Board approved budgets and 3-year financial
models. These are used to support judgements in the preparation of the Group’s financial statements
including the decision on whether to recognise deferred tax assets and for the Group’s going concern
assessment.
89
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
Accounting Policies (continued)
Critical accounting judgements and key areas of estimation uncertainty (continued)
(d) Goodwill and other intangible assets
Judgement is required in the annual impairment test of goodwill to ascertain if there are any signs of
impairment. This test covers the future EBITDA performance against the carrying value of the
Goodwill. The Group values other intangibles based on the following:
• Customer contracts have been valued by taking an average length of contract multiplied by an
average margin per month. A discount rate has been applied to the calculated value to reflect
customer churn and doubtful debts. The margin and applied discount will vary dependant on the
customer base which factors in location, economy and history of the previous business.The contract
value will be reviewed annually for impairment.
•
Intellectual property based on estimated fair value
• Capitalisation of internal staff for development of systems and major projects is calculated on a
time basis and charged to intangible assets and amortisaed over the agreed policy in place for such
assets.
(e) Trade and other receivables
Judgement is required in ascertaining the collectability of debt and impairment provisions are made
accordingly. Impairment is determined on the age of the debt and suitable provisions are then provided
where appropriate.
(f) Contingent Liabilities/Provisions
Judgement is required in ascertaining the carrying value of any provisions or contingent liabilities
where there is support is available, but uncertainty as to the amount that will ultimately be settled. Any
provisions are estimated based on facts relevant at the reporting date and reported in the relevant
sections of the notes to the accounts. Such estimates are considered inherently uncertain and
outcomes may ultimately differ materially from the provision made. Where no provision has been made
but an outflow of economic benefit remains possible, a contingent liability is disclosed. The distinction
between probable and possible is a matter of the Directors’ judgement.
(g) Recoverable value of investments in subsidiaries
Judgement is required in assessing whether there are any indicators that the carrying amounts of
investments may not be recoverable. When value in use calculations are undertaken, management
must estimate the expected future cash flows from the asset or cash-generating unit and choose a
suitable discount rate and long-term growth rate in order to calculate the present value of those cash
flows.
(h) Recoverable value of deferred tax assets
Judgement is required to assess how probable it is that taxable profits will be available against which
historic tax losses can be utilised.
90
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
_____________________________________________________________________________________________
2. Continuing Operations Revenue
Recurring revenue - airtime
Recurring revenue - other
Government grant income
Other non recurring revenue
2021
£’000
24,972
624
-
1,471
2020
£’000
20,490
527
36
2,375
27,067
23,428
Segmental split of Continuing Operations Revenue:
The Group’s operations are located in Australia, Norway and the UK with the head office located in the
United Kingdom. The assets of the Group, cash and cash equivalents, are split across each of the regions,
with the non-current assets shown below.
The Group currently has one reportable segment – provision of broadband services – and categorises all
revenue from operations to the segment. The chief operating decision maker is the Chief Financial Officer.
The Group’s revenue from external customers, and the non-current assets by geographical location is
detailed below:
United Kingdom
Europe
Rest of World
External revenue by
location of customer
Non-current assets by
location of assets
2021
£’000
747
4,544
21,776
2020
£’000
577
6,260
16,591
2020
2021
£’000 £’000
4,907
1,838
3,662
9,342
2,975
3,441
27,067
23,428
15,758
10,407
In order to present relevant information, non-current assets by location have been re-presented for the
purposes of this note only, so as to compare the continuing revenue as analysed by region. The investment
of £5.6m in the ongoing Quickline business is included in United Kingdom in 2021.
3.
Profit from Group Operations
The profit (2020 – loss) has been arrived at
after charging/(crediting) the following:
Depreciation of property plant & equipment -
owned assets (Note 10)
Depreciation of property plant & equipment -
ROU assets (Note 10)
Amortisation of intangible assets (Note 11)
Goodwill Impairment charges (Note 11)
Gain on sale of discontinued operation (note
13)
Operating lease income (Note 22)
Share based payments (Note 24)
Wages & salaries and social security costs
(Note 5)
Pension costs (Note 5)
Losses from translation of foreign currency
Profit on disposal of Fixed Assets
91
Continuing operations Discontinued operations
2021
£’000
2020
£’000
2021
£’000
2020
£’000
804
586
-
-
-
-
163
6,515
236
355
-
524
768
18
-
-
-
1,355
4,839
211
204
-
1,027
3,373
253
912
21
-
(25,925)
-
-
2,649
20
-
(8)
1,608
213
(18,928)
304
-
7,285
107
-
(45)
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
4. Auditor’s Remuneration
Audit services
Fees payable to the Group’s auditor for the audit of the Group’s
annual accounts
Fees payable to the Group’s auditor for other services:
Audit of the accounts of subsidiaries
Other services
2021
£’000
2020
£’000
74
-
7
81
79
35
8
134
5. Staff Costs
The aggregate remuneration of all employees (including directors),
for both the continuing and discontinued operations comprised:
Wages and salaries
Social security costs
Pension costs
Continuing operations
Discontinued operations
2021
£’000
2020
£’000
2021
2020
£’000 £’000
5,930
585
236
6,751
4,460
379
211
5,050
2,371
278
20
2,669
6,488
797
107
7,392
The average monthly number of people (Including the Executive Directors) employed during the year by
category of employment were as follows, including the staff employed by the discontinued operations:
Continuing
operations
Discontinued
operations
Operating staff
Sales Staff
Management and administrative staff
2021
56
14
26
96
2020
58
14
27
99
2021
37
2
8
47
2020
115
18
50
183
92
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
6.
Directors’ Remuneration
Salaries
Fees
Benefits
Pension costs
2021
£’000
1,840
136
5
20
2020
£’000
1,133
106
31
19
2,001
1,289
The highest paid director’s aggregate remuneration was £853k (2020: £537k) including pension
contributions of £11k (2020: £9k). Details of directors’ remuneration, including pension contributions, are
set out in the Directors’ Report on page 36. The salaries include bonuses of £175k (FY20: £438k) charged
to discontinued operations.
7. Finance Costs
BGF unsecured loan interest payable
Bank loan interest payable
Revolving Credit Facility interest payable
Lease interest expense
Total interest payable
BGF Penalty Interest
BGF redemption premium and finance charges
Total finance costs
Finance costs include the following amounts charged to the discontinued
operations:
Bank loan interest payable
Lease interest expense
Total interest payable
Split as follows:
Continuing operations
Discontinued operations
Total finance costs
2021
£’000
-
-
747
105
852
-
-
852
38
16
54
798
54
852
2020
£’000
55
87
1,117
262
1,521
1,408
4,179
7,108
170
104
274
6,834
274
7,108
Interest payable on the Revolving Credit Facility is 2.95% + LIBOR. Interest paid in the year amounts to
£0.7m (FY20: £1.3m)
93
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
8. Taxation
a) Tax (credit) / charge for the year
UK Corporation tax
Overseas corporation tax
Deferred tax credit
Current tax (credit) / charge
b) Tax reconciliation
2021
£’000
2020
£’000
-
123
(199)
(76)
(26)
305
(17)
262
The taxation credit on the loss for the year differs from the amount computed by applying the corporation
tax rate to the loss before tax for the following reasons:
Loss on ordinary activities before tax
Tax at UK corporation tax rate of 19% (2020: 19%)
Tax effect of expenses that are not deductible in determining taxable profit
Adjustment for prior periods
Deferred tax not recognised *
Foreign tax rate differences
Changes in deferred tax rate
2021
£’000
2020
£’000
(1,696)
(3,951)
(322)
60
(70)
1,170
15
(929)
(751)
856
(72)
478
89
(161)
Tax (credit) / charge at effective tax rate for the year
(76)
262
c) Deferred Tax
The deferred tax included in the balance sheet as per note 19, is as follows:
Deferred tax asset
Deferred tax liability
2021
£’000
709
(13)
696
2020
£’000
501
(104)
397
* Note that deferred tax assets on losses have only been recognised to the extent they are considered
recoverable in the foreseeable future.
94
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
9.
Profit / (Loss) Per Share
Basic earnings per share is calculated by dividing the profit / (loss) attributable to shareholders by the
weighted average number of ordinary shares in issue during the year.
30 November 2021
Weighted
Average
Number of
Shares
Profit/(Loss)
£’000
Per Share
Amount
Pence
Basic and diluted EPS
Profit for the financial year
Add: adjustment for non-controlling interest share
of losses
Basic EPS - Profit attributable to shareholders
Adjusted EPS - Profit attributable to shareholders
from continuing operations
Basic Diluted EPS – Profit attributable
shareholders
Adjusted Diluted EPS – Profit attributable to
shareholders from continuing operations
to
26,753
(284)
27,037
57,697,017
46.9
2,465*
57,697,017
27,037
59,251,343
2,465*
59,251,343
4.3
45.6
4.2
Basic and diluted EPS
Profit for the financial year
Add: adjustment for non-controlling interest share of
losses
Basic EPS - Loss attributable to shareholders
Adjusted EPS - Profit attributable to shareholders
from continuing operations
Basic Diluted EPS – Profit attributable
shareholders
Adjusted Diluted EPS – Profit attributable to
shareholders from continuing operations
to
30 November 2020
Weighted
Average
Number of
Shares
Per Share
Amount
Pence
Loss
£’000
9,431
(227)
9,658
57,589,857
16.8
1,114*
57,589,857
9,658
58,027,855
1,114*
58,027,855
1.9
16.6
1.9
The profit attributable to shareholders of £27.0m (2020: £9.7m profit) is the profit for the financial year of
£26.8m (2020: £9.4m profit) after adjusting for the add back of the loss attributable to non-controlling
interests of £0.3m (2020: £0.2m loss).
* Non-GAAP measure, the profit attributable to shareholders from continuing operations is £2.5m (2020:
£1.1m profit) after adjusting for the gain from the sale of the discontinued operations and adding back
exceptional costs. See table on page 13 of the Strategic Report for further analysis of adjusted EBITDA.
95
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
10.
Property, Plant & Equipment - Group
Land
&
Buildings
£’000
Fixtures,
Fittings &
IT
Hardware
Motor
Infrastructure & Software Vehicles
£’000
£’000
£’000
Rental
Stock
£’000
Total
£’000
Cost
At 1 December 2019
Exchange Differences
Additions
Disposals
3,016
21,557
1,210
323
10,669
36,775
65
314
(1,669)
105
6,040
(2,215)
39
1,149
(1,391)
4
249
(212)
189
3,114
(13,789)
402
10,866
(19,276)
At 30 November 2020
1,726
25,487
1,007
364
183
28,767
Exchange Differences
Additions
Disposals
(38)
17
(566)
(600)
5,403
(17,040)
(34)
582
(474)
-
24
(376)
(6)
40
-
(678)
6,066
(18,456)
At 30 November 2021
1,139
13,250
1,081
12
217
15,699
Accumulated Depreciation
At 1 December 2019
1,123
15,059
903
146
3,679
20,910
Exchange Differences
Depreciation charge
Disposals
28
374
(707)
104
2,397
(1,229)
At 30 November 2020
818
16,331
Exchange Differences
Depreciation charge
Disposals
(22)
201
(252)
(526)
2,211
(7,610)
At 30 November 2021
745
10,406
Net book value
At 30 November 2021
394
2,844
At 30 November 2020
908
9,156
27
382
(663)
649
(14)
205
(387)
453
628
358
3
97
(153)
93
-
53
(141)
5
7
51
2,327
(6,057)
-
-
-
-
-
213
5,577
(8,809)
17,891
(562)
2,670
(8,390)
11,609
217
4,090
271
183
10,876
96
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
10. Property, Plant & Equipment – Group (continued)
Right of Use assets
Group Property, Plant & Equipment includes the following values for Right of Use assets
Land
&
Fixtures,
Fittings &
IT Hardware
Motor
Buildings
Infrastructure & Software Vehicles
£’000
£’000
£’000
Total
£’000
Cost
At 1 December 2019
Exchange Differences
Additions
Disposals
£’000
2,575
61
277
(1,530)
8,111
17
962
(2,018)
At 30 November 2020
1,383
7,072
Exchange Differences
Additions
Disposals
(23)
6
(283)
(103)
28
(3,083)
At 30 November 2021
1,083
3,914
Accumulated Depreciation
At 1 December 2019
Exchange Differences
Depreciation charge
Disposals
At 30 November 2020
Exchange Differences
Depreciation charge
Disposals
At 30 November 2021
Net book value
At 30 November 2021
At 30 November 2020
956
25
341
(689)
633
(21)
195
(93)
714
369
750
4,748
15
1,049
(998)
4,814
(81)
582
(2,270)
3,045
869
2,258
97
-
274
10,960
1
865
(821)
45
(1)
23
(10)
57
2
83
(140)
81
2,187
(4,509)
219
8,719
-
-
(219)
(127)
57
(3,595)
-
5,054
-
146
5,850
2
215
(191)
26
(1)
34
(17)
42
15
19
1
75
(88)
43
1,680
(1,966)
134
5,607
-
25
(159)
-
-
(103)
836
(2,539)
3,801
1,253
85
3,112
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
11.
Intangible Assets -
Group
Cost
At 1 December 2019
Additions
Disposals of assets of
discontinued operations
Other disposals
Exchange Difference
At 30 November 2020
Additions
Disposals of assets of
discontinued operations
Exchange Difference
Customer
Goodwill Contracts
£’000
£’000
Software
£’000
Intellectual
Property
£’000
Total
£’000
29,180
-
20,845
217
(17,541)
-
410
(17,203)
(81)
402
12,049
-
4,180
-
(6,414)
(112)
(96)
(149)
2,617
690
(3,180)
-
-
127
53
(127)
-
2,480
-
(2,465)
-
-
15
-
(15)
-
55,122
907
(40,389)
(81)
812
16,371
53
(6,652)
(261)
At 30 November 2021
5,523
3,935
53
-
9,511
Accumulated Amortisation
At 1 December 2019
Impairment charge
Amortisation
Accumulated amortisation of
assets of discontinued
operations
Other disposals
Exchange Differences
At 30 November 2020
Amortisation
Accumulated amortisation of
assets of discontinued
operations
Exchange Differences
At 30 November 2021
Net book value
At 30 November 2021
At 30 November 2020
3,391
213
-
18,647
-
972
1,626
-
654
2,096
-
-
25,760
213
1,626
(3,400)
(15,734)
(2,280)
(2,081)
(23,495)
-
8
212
-
(81)
372
4,176
4
-
-
-
17
-
-
15
-
(212)
(96)
(17)
(15)
-
-
(149)
3,935
5,523
11,837
-
4
-
-
53
127
-
-
-
-
(81)
380
4,403
21
(340)
(149)
3,935
5,576
11,968
Annual test for impairment
Under IAS 36, Goodwill is tested annually for impairment, irrespective of there being any impairment indicators.
For the purpose of impairment testing, goodwill and other intangibles are allocated to business units which
represent the lowest level at which that those assets are monitored for internal management purposes. The
recoverable amount of each cash-generating unit (‘GCU’) is determined from value-in-use calculations. The
calculations use pre-tax cash flow projections based on financial budgets and forecasts approved by the Directors
98
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
indicated that no impairment was required to the continuing operations. The year-end model utilises forecasts
based upon the Group’s budget, Strategy Plans and cashflows for FY22 and FY23. Over the 2-year forecast, the
Group has applied compound average growth rates, pre IFRS16, for EBITDA of 2%. In accordance with IAS 36,
the growth rates for beyond the initially forecast years do not exceed the long-term average growth rate for the
industry. The forecasts have been discounted at a pre-tax rate of 6.7% (FY20: 8.1%). This discount rate was
calculated using a pre-tax rate based on the weighted average cost of capital for the Group.
As at 30 November the carrying amount of goodwill is its recoverable amount, being £2.2m (FY20: £2.2m) in
respect of Bigblu Norge and £3.3m (FY20: £3.3m) in respect of SkyMesh. Recognition of impairment losses was
£nil (FY20: £0.2m). Impairment charges are included in Administrative Expenses in the Statement of
comprehensive income. The carrying amount of goodwill was reduced by £6.2m and the carrying value of software
by £0.1m as a result of the disposal of the controlling interest in QCL Holdings Ltd detailed in note 13.
Based on the results of the impairment review, the Directors have not identified any reasonably possible changes
that would result in an impairment.
12. Investments
Subsidiaries
Other equity investments
Loan notes
Opening balance
Movements during the year:
Acquisition of subsidiaries from
group undertaking
Unlisted shares acquired as
consideration for sale of subsidiary
Loan notes acquired as consideration
Loan note interest
Disposal of subsidiary
Impairment charge
Group
2021
£’000
-
2,240
3,432
5,672
-
-
2,240
3,360
72
-
-
5,672
Group
2020
£’000
Company
2021
£’000
Company
2020
£’000
-
-
-
-
38,529
2,240
3,432
52,393
-
-
44,201
52,393
52
52,393
18,018
-
-
-
-
(52)
-
-
40,000
2,240
3,360
72
(12,393)
(1,471)
-
-
-
(5,625)
-
44,201
52,393
The cost of investments held by the Company at 30 November 2021 was reduced by £12.39m as a result
of the disposal of QCL Holdings Limited and its subsidiary to funds managed by Northleaf Capital Partners.
Subsidiary Undertakings
Subsidiary undertakings are listed overleaf:
Non-controlling Interest in QCHL Holdings Ltd
Following the disposal of QCHL Holdings Ltd in June 2021 to Northleaf as detailed in note 13 below there are no
non-controlling interests in any of the Company’s subsidiaries. Prior to the disposal the final £2m tranche of equity
committed by the original non-controlling investors was received in December 2020 reducing BBB’s majority
shareholding in QCHL Holdings to 56.93% from 62.69% at 30 November 2020.
99
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
______________________________________________________________________________________
12. Investments (continued)
Subsidiary Undertakings
Address & Country of
Incorporation
Class of
Share
Parent Company
No of Shares % held
Bigblu Norge as
Høgdaveien 1, 1540 Vestby
Norway
Ordinary Bigblu Broadband
plc
SkyMesh Pty Ltd
51 Alfred Street, Fortitude Valley
QLD 4006, Australia
Ordinary Bigblu Broadband
plc
BorderNET
Internet Pty Ltd
51 Alfred Street, Fortitude Valley
QLD 4006, Australia
Ordinary SkyMesh Pty Ltd
1,700,412 of
1.40Nok each
20,898,680 of
£0.196 each
2,863,105 of
£0.09 each
Ordinary SkyMesh Pty Ltd
100
by
parent
100%
100%
100%
100%
Ordinary Bigblu Broadband
1 of £0.01
100%
plc
Ordinary Bigblu Broadband
1 of £0.01
100%
plc
Bigblu Broadband
Limited
BBB Ausco
Limited**
BBB Norco
Limited**
Tompkins Wake, Level 11, 41
Shortland Street, Auckland,
1140, New Zealand
6th Floor
60 Gracechurch Street
London
EC3V OHR
6th Floor
60 Gracechurch Street
London
EC3V OHR
*This company is exempt from annual audit.
** Dormant companies
13. Discontinued operations
Description
On 10 June 2021 QCL Holdings Ltd together with its subsidiary was sold to funds managed by
Northleaf Capital Partners and is reported in the current year as a discontinued operation. Financial
information relating to the discontinued operation for the period to the date of disposal is set out below.
The consideration due to the Company following the Disposal was total cash consideration of up to
£41.2m of which £31.1m was paid on completion, with a further £10.1m as deferred contingent
consideration that remains subject to certain performance conditions being met by 31 March 2022, or
in certain circumstances, 31 May 2022; and £5.6m being satisfied in shares (£2.2m) and Loan Notes
(£3.4m at an interest rate of 4.5% pa) that were issued to the Company on completion and an
additional award of Loan Notes (with an option to convert partially into equity) of up to £1.8m subject
to the conditions of the deferred contingent consideration also being met. None of the potentially
receivable deferred contingent consideration of up to £11.8m has been recognised in 2021.
On 30 September 2020 Bigblu Operations Ltd together with all its subsidiaries was sold to Eutelsat
SA and was reported in the prior year as a discontinued operation. On 19 January 2022 additional
consideration of £2.8m cash was received as part of the final settlement with Eutelsat which had not
been recognised in 2020. Accordingly, an adjustment to the value of deferred consideration is
recognised in 2021 being a gain of £3.3m after expenses and release of provisions as set out below.
This represents a revision of an estimate so no adjustment to comparative financial information has
been made.
100
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
____________________________________________________________________________________
__________
13. Discontinued operations (continued)
Description (continued)
Group financial information for 2020 set out below is thus a combination of these two discontinued
operations. 2020 comparative information throughout the Financial Statements has been adjusted to
reflect the revised split of activities between continuing and discontinued operations.
Financial performance and cash flow information
Revenue
Expenses
Loss before tax
Taxation on operations
Loss after tax of discontinued operations
Gain on sale of the subsidiary after tax (see below)
Adjustment to fair value of deferred consideration (see below)
Profit from discontinued operations
Exchange differences on translation of discontinued operations
Other comprehensive income from discontinued operations
Net cash (outflow) / inflow from operating activities
Net cash inflow from investing activities
Net cash inflow from financing activities
Net increase in cash generated by the subsidiaries
Details of sale of subsidiary
Consideration received or receivable:
Cash
Investments (note 12)
Fair value of contingent consideration
Total disposal consideration
Carrying amount of net assets sold
Elimination of non-controlling interest
Expenses of sale
Other Provisions (Note 17)
Gain on sale before tax
Corporation tax expense on gain
Gain on sale after tax
Group
2021
£’000
3,091
(3,896)
2020
£’000
28,908
(33,983)
(805)
(53)
(858)
25,925
3,306
28,373
-
-
(3,133)
25,531
1,666
24,064
31,094
5,600
-
36,694
(13,660)
5,865
(2,974)
-
25,925
-
25,925
(5,075)
391
(4,684)
18,928
-
14,244
(294)
(294)
6,635
27,555
996
35,186
37,222
-
449
37,671
(16,058)
-
(1,217)
(1,468)
18,928
-
18,928
The investments forming part of the consideration comprise loan notes of which 40% were convertible
into shares in the business of QCL. The option to convert was exercised resulting in the Company
owning unlisted shares valued at £2.2m and loan notes valued at £3.4m at November 2021.
101
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
___________________________________________________________________________________________
13. Discontinued operations (continued)
The carrying amount of assets and liabilities as at the date of sale (10 June 2021) were:
10 June 2021
£’000
9,597
6,312
2,533
236
1,292
19,970
4,310
2,000
6,310
13,660
2021
£’000
2,843
1,206
(743)
3,306
Property, plant and equipment
Intangible assets
Cash and cash equivalents
Inventory
Trade and other receivables
Total assets
Trade and other payables
Loans
Total liabilities
Net assets
The adjustment to deferred consideration for the disposal in 2020 to Eutelsat comprises:
Additional cash consideration receivable
Release of provision and accrued income
Expenses of sale
14. Cash and cash equivalents
Cash and bank accounts
15.
Inventory
Finished goods
2021
£’000
5,201
Group
2020
£’000
15,306
Company
2021
£’000
1,550
2020
£’000
10,700
5,201
15,306
1,550
10,700
Group
2021
£’000
2020
£’000
699
896
There is no material difference between the amounts stated above and replacement cost.
Write down of inventories to net realisable value amounted to £25k (2020: £151k) all related to continuing
operations. No costs were recognised as an expense during the year.
102
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
______________________________________________________________________________________________
16.
Trade and other receivables
Group
Trade receivables
Other receivables
Deferred consideration
Prepayments and accrued
income
Amounts due from group
undertakings
2021
£’000
802
318
2,843
954
-
2020
£’000
708
1,486
449
1,155
-
Company
2021
£’000
2020
£’000
146
34
2,843
59
842
40
187
449
19
552
4,917
3,798
3,924 1,247
Movement in provision for impairment of receivables
Individually impaired
As at 1 December 2020
Charged / (Credited) to Income statement
Provision transferred on sale of subsidiaries
Utilised
As at 30 November 2021
2021
£’000
188
88
(13)
(235)
28
2020
£’000
1,796
(217)
(1,358)
(33)
188
The average credit days taken on sales of goods and services is 7 days (2020: 7 days). No interest is charged
on receivables. Trade receivables are provided for based on estimated irrecoverable amounts from the sale
of goods and services, determined by reference to past default experience and likelihood of recovery as
assessed by the directors.
Included in the Group’s trade receivable balance are debtors with a carrying amount of £330k (2020: £159k)
which are past due at the reporting date. The directors consider that the carrying amount of trade receivables
approximates to their fair value.
Accounts receivable ageing:
Current
30-60 days
60-90 days
90-120 days
As at 30 November 2021
2021
£’000
2020
£’000
475
67
21
239
802
549
41
22
96
708
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk characteristics and the days past due. The expected loss
rates are based on the payment profiles of sales over a period of 12 months before 30 November 2021 or 1
December 2021 respectively and the corresponding historical credit losses experienced within this period.
The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables.
103
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
_____________________________________________________________________________________________
17. Trade and other payables
Current
Trade payables
Other taxes and social security
Other payables
Accruals and deferred income
Lease liabilities
Provisions for liabilities and
charges
Group
2021
£’000
Group
2020
£’000
Company
2021
£’000
Company
2020
£’000
4,496
966
82
3,253
623
685
5,893
1,198
536
3,915
965
1,468
10,105
13,975
642
528
48
2,662
-
-
3,880
701
577
229
864
-
1,468
3,839
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The
average creditors days taken for trade purchases is 81 days (2020: 73 days). The Group has financial risk
management policies in place to ensure that all payables are paid within the credit time frame. The directors
consider that the carrying amount of trade and other payables approximates to their fair value.
The Group recognises provisions in the relevant year’s balance sheet based on estimates relating to certain
outcomes, including restructuring costs, and costs associated with the M&A activities as presented in note
13. As in 2020, the provisions as at 30 November 2021 are expected to be utilised within the next 12 months
following the end of the financial year, to cover any such costs.
Further disclosure relating to provisions has not been presented, as permitted by IAS 37:92, due to the
Directors’ assessment of the sensitivity of on-going commercial matters which would be prejudicial to the
Group.
The breakdown of the provisions carrying value is as follows:
Other provisions (Note 13)
Total provisions
Movements in the provision during the year were as follows:
Carrying amount at start of year
Utilised during the year
Charged to discontinued operations
Total provisions
Group
and Company
2021
£’000
685
685
Group
and Company
2020
£’000
1,468
1,468
Group
and Company
2021
£’000
1,468
(1,468)
783
685
Group
and Company
2020
£’000
328
(328)
1,468
1,468
104
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
18. Non-current liabilities
Revolving credit facility
Total loans
Lease liabilities
Total
Group
2021
£’000
-
-
835
835
Group
2020
£’000
7,877
7,877
2,628
10,505
Company
2021
£’000
Company
2020
£’000
-
7,877
-
7,877
-
-
-
7,877
The unsecured Revolving Credit Facility (RCF) obtained in December 2019 was repayable by December
2024, and attracted interest at a variable rate of 2.95% + LIBOR. It was repaid during the year and a reduced
new £5m RCF was set up which was fully undrawn at the year end . Leases attract interest at a rate of
between 3.25% and 6%. The revolving credit facility is subject to a fixed charge over the company’s assets,
as registered at Companies House.
Maturity of lease liabilities
Due 1 – 2 years
Due 2 – 5 years
Total
Maturity of loans
Due 1 – 2 years
Due 2 – 5 years
Due over 5 years
Total
Group
2021
£’000
393
442
Group
2020
£’000
994
1,634
835
2,628
Group
2021
£’000
-
-
-
Group
2020
£’000
-
7,877
-
Company
2021
£’000
-
-
-
Company
2020
£’000
-
7,877
-
-
7,877
-
7,877
105
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
_____________________________________________________________________________________________
19.
Deferred Taxation
At 1 December
Movement in relation to discontinued operations
Transfer to Statement of Comprehensive Income
At 30 November
Deferred tax is provided as follows:
Accelerated capital allowances
Tax losses
Geographical split of deferred tax asset/(liability):
United Kingdom
Europe
Rest of the World
2021
£’000
2020
£’000
(397)
(92)
(207)
(696)
408
288
696
-
709
(13)
696
(409)
(228)
240
(397)
530
(133)
397
(100)
501
(4)
397
20.
Share Capital
At 30 November 2020
Shares issued in the year
Shares issued at 15p each
Reclassification of merger relief reserve
Redemption of B shares bonus issue
No. of
Shares
No.
57,589,857
736,263
-
-
Share
Capital
£
8,638,476
110,442
-
-
Share
Premium
£
23,918,802
325,021
10,260,730
(25,915,436)
At 30 November 2021
58,326,120
8,748,918
8,589,117
All shares issued during the year were as a result of share option exercises generating a total value of
£435k
All issued share capital is fully paid up. All ordinary shares have a par value of £0.15.
106
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
_________________________________________________________________________________________________
21. Other Capital Reserves – Group
Listing cost reserve
The listing cost reserve arose from expenses incurred on AIM listing.
Foreign exchange translation reserve
The foreign exchange translation reserve is used to record exchange difference arising from the translation
of the final statements of foreign operations.
Share option reserve
The share option reserve is used for the issue of share options during the year and charges relating to
previously issued options.
Merger relief reserve
The merger relief reserve relates to share premium attributable to shares issued in relation to the acquisition
of Bigblu Operations Limited in May 2015. Costs of £Nil (2020: £Nil) were offset against the merger relief
reserve during 2021.
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.
Other Equity Reserve
Other Equity relates to the equity element of the financing arrangements entered into with BGF, including
the equity elements of compound financials instruments.
Share Premium
Share premium represents the excess consideration over nominal value net of issue costs and amounts to
£8.6m (2020: £34.1m). Costs of £0.3m (2020: £Nil) were offset against the share premium account during
2021 in relation to the return of capital and the transfer of c£26m to the capital redemption reserve.
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.
107
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
22. Lease Arrangements
The Group as Lessee
The statement of profit or loss shows the following amounts relating to leases:
Depreciation of ROU assets
Land & buildings
Fixtures, fittings & infrastructure
IT hardware and software
Motor vehicles
Interest expense (included in finance cost)
Expense relating to leases of low-value assets
(included in administrative expenses)
Continuing operations
Discontinued operations
2021
£’000
2020
£’000
2021
£’000
2020
£’000
167
384
34
-
585
90
57
162
565
26
15
768
160
65
28
198
-
25
251
16
-
179
484
189
60
912
102
-
The total cash outflow for leases was £1,137k (2020: £1,926k).
The Group as lessor
Minimum lease receipts under operating leases
recognised as income in the year
-
-
-
304
Continuing operations
Discontinued operations
2021
£’000
2020
£’000
2021
£’000
2020
£’000
At the balance sheet date, the Group had outstanding commitments for future
minimum lease receipts under non- cancellable operating leases, which fall due
as follows:
Within one year
Within 2 – 5 years
2021
£’000
2020
£’000
-
-
-
-
-
-
The Company had no leases other than those accounted under IFRS16.
23. Related Party Transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated
on consolidation and are not disclosed in this note.
Remuneration of key management personnel
The remuneration of the directors, and the key management personnel of the Group, is set out below in
aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
Short-term employment benefits
Pension costs
Share based payments
108
2021
£’000
1,981
20
337
2,338
2020
£’000
1,361
19
332
1,712
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
____________________________________________________________________________________________
24. Share-Based Payments
Employee Share Options
The Group has in place share option schemes for employees of the Group. Options are exercisable at
the price agreed at the time of the issue of the share option. The performance conditions vary between
employees. If the options remain unexercised after a period of 5 years from date of grant (10 years for
Executives) the options expire. Options are forfeited if the employee leaves the Group before the options
vest unless agreed by the Board. Details of the share options outstanding during the year are as follows:
2021
2020
Number of
Share
Options
Weighted
Average
Exercise
price
4,187,226
(736,263)
(1,883,304)
1,567,659
43.68p
59.14p
20.49p
24.06p
Number of
Share
Options
5,246,254
(18,978)
(1,040,050)
4,187,226
Weighted
Average
Exercise
price
57.60p
29.64p
106.42p
43.68p
Outstanding at beginning of year
Exercised during the year
Cancelled during the year
Outstanding at end of year
Exercisable at end of year
578,742
65.18p
1,299,551
100.98p
The options outstanding at 30 November 2021 had a weighted average exercise price of 24.06p (2020:
43.68p), and a weighted average remaining contractual life of 4 years (2020: 4 years).
No new options were granted during the year (2020: Nil).
Long Term Incentive Plan
During 2018 an executive long-term incentive plan (LTIP) was put in place following consultation with a
number of shareholders with performance criteria based on 2 key metrics: 50% based on how the BBB
share price performs and 50% based on how BBB performs against a basket of similar companies. It was
agreed that awards would be considered annually by the Remuneration committee and post the disposal
all such schemes including Management Incentive Plans would be reviewed for appropriateness.
Awards are granted annually as part of a formal, annual, grant policy:
• within six weeks following the announcement of results; or
• when exceptional circumstances exist (e.g. the normal grant is delayed for some reason or an out of
policy award needs to be granted).
The maximum term of options granted under the LTIP is 10 years from grant date. Expiry dates range from
May 2022 to August 2029. At 30 November 2021 there were a total of 1,264,054 options outstanding, with
an exercise price of 15p, of which 275,137 have vested. Options are settled by issue of equity in exchange
for cash
Detailed Plan Rules
The Plan was issued for the first time in 2018 and the remuneration committee of the Board of the Company
shall have the right to decide, in its sole discretion, whether or not further awards will be granted in the
future and to which employees those awards will be granted. The rules were clear that grants were at the
discretion of the Board including TSR (Total Shareholder Return) considerations that needed to be taken
into account before further awards could be made.
Expected volatility was determined by assessing the movements of the share price since the
readmission to AIM in May 2015.
109
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
____________________________________________________________________________________________
24. Share-Based Payments (continued)
Other Employee Options
The maximum term of options granted under other schemes is 10 years from date of grant. This term
applies to all of the 303,605 options vested as at 30 November 2021 with anticipated lapse dates ranging
between March 2026 and March 2027. Options are settled by issue of equity in return for cash.
The Group recognised total expenses of £163k (2020: £332k), related to equity-settled share-based
payment transactions as follows:
Share option charge (all related to LTIP)
Adjustment for cancellation of options before vesting
Total share option expense
2021
£’000
337
(174)
163
2020
£’000
332
-
332
Non-Employee Options
In addition to the above in 2020 there was also a share option charge relating to the BGF options at the
time of refinancing (£1,023k). This was classified as a finance cost with the corresponding entry in the other
equity reserve in the Consolidated Statement of Financial Position.
As at 30 November 2021, BGF own c.4.5m shares in BBB, as well as options c.4.9m shares at an exercise
price of 68.5p, expiring in May 2024. In addition, during the year ended 30 November 2020, BBB granted
BGF an additional 1.8m options at an exercise price of 90p expiring May 2024.
25.
Financial Risk Management
Background
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those risks
and the methods used to measure them. Further quantitative information in respect of these risks is
presented throughout the financial statements. The “financial instruments” which are affected by these risks
comprise borrowings, cash and liquid resources used to provide finance for the Group’s operations,
together with various items such as trade debtors and trade creditors that arise directly from its operations,
inter-company payables and receivables, and any derivatives transactions (such as interest rate swaps and
forward foreign currency contracts) used to manage the risks from interest rate and currency rate volatility.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and
policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing
and operating processes that ensure the effective implementation of the objectives and policies to the
Group’s finance function. The Board receives monthly reports through which it reviews the effectiveness of
the processes put in place and the appropriateness of the objectives and policies it sets. The overall
objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting
the Group’s competitiveness and flexibility. Further details regarding these policies are set out below:
110
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
25.
Financial Risk Management (continued)
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to meet their financial
obligations as they arise while maximising the return to stakeholders. The capital structure of the Group
consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained earnings as disclosed in Notes 20 to 21.
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables and
investments. The Group’s exposure to credit risk is primarily attributable to its trade receivables. Credit risk
is managed locally by the management of each business unit. Prior to accepting new customers, credit
checks are obtained from reputable external sources. The amounts presented in the balance sheet are net
of allowance for doubtful receivables (see note 15 for more details). An allowance for impairment is made
where there is an identified loss event which, based on previous experience, is evidence of a reduction on
the recoverability of the cash flows. The credit risk on liquid funds and derivative financial instruments is
limited because the counterparties are banks with low credit risk assigned by international credit-rating
agencies. The Group has no significant concentration of credit risk, with exposure spread over a large
number of counterparties and customers. The Group has no significant concentration of credit risk, other
than with its own subsidiaries, the performances of which are closely monitored. The Directors confirm that
the carrying amounts of monies owed by its subsidiaries approximate to their fair value.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its
financial obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash
to allow it to meet its liabilities when they become due. To achieve this aim, the cash position is continuously
monitored to ensure that cash balances (or agreed facilities) meet expected requirements for a period of at
least 90 days. The Board monitors annual cash budgets and updated forecasts against actual cash position
on a monthly basis. At the balance sheet date, these projections indicated that the Group expected to have
sufficient liquid resources to meet its obligations under all reasonably expected circumstances. The maturity
of financial liabilities is detailed in Note 17.
Market risk
Market risk arises from the Group’s use of interest bearing and foreign currency financial instruments. It is
the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
interest rates (interest rate risk) or foreign exchange rates (currency risk).
Interest rate risk
The Group finances its operations through a mixture of retained profits, equity capital and bank facilities,
including hire purchase and lease finance. The Group borrows in the desired currency at floating or fixed
rates of interest and may then use interest rate swaps to secure the desired interest profile and manage
exposure to interest rate fluctuations.
Borrowings contractual maturities and effective interest rate analysis
In respect of interest bearing financial liabilities, the table in note 17 indicates the undiscounted amounts
due for the remaining contractual maturity (including interest payments based on the outstanding liability at
the year end) and their effective interest rates. The ageing of these amounts is based on the earliest dates
on which the Group can be required to pay. The HSBC Facility is reported quarterly to the bank in the form
111
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
25.
Financial Risk Management (continued)
of convenant compliance reporting, which monitors actuals performance by a number of specific monetary
measurements.
Non-interest bearing liabilities
Details of trade and other payables falling due within one year are set out in Note 16.
Currency risk
The main currency exposure of the Group arises from the ownership of its subsidiaries in Europe and
Australia. It is the Board’s policy not to hedge against movements in the Sterling/Australian Dollar,
Sterling/Norwegian Kroner and Sterling/Euro exchange rate.
Other currency exposure derives from trading operations where goods and services are exported or raw
materials and capital equipment are imported. These exposures may be managed by forward currency
contracts, particularly when the amounts or periods to maturities are significant and at times when
currencies are particularly volatile.
Trading
It is, and has been throughout the period under review, the Group’s policy that no trading in financial
instruments shall be undertaken.
26. Financial instruments
The Group has the following financial instruments:
Financial assets
Cash & cash equivalents
Trade receivables
Amounts owed by group undertakings
Other receivables
Group
2021
£’000
5,201
802
-
318
Group
2020
£’000
15,306
708
-
1,486
Company Company
2020
£’000
2021
£’000
1,550
146
3,171
34
10,700
40
552
187
Total
6,321
17,500
4,901
11,479
Financial liabilities
Trade payables
Other creditors
Lease liabilities
Total
4,496
82
1,458
5,893
536
3,593
6,036
10,022
642
48
-
690
701
229
-
930
The carrying value of financial instruments is a reasonable approximation of fair value due to the short-
term maturities of these instruments.
112
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2021
27. Contract balances
The consolidated statement of financial position includes the following amounts relating to contracts with
customers
Accrued income – included in Prepayments and accrued income
Total contract assets
Deferred income – included in Accruals and deferred income
Total contract liabilities
2021
£’000
-
-
(838)
(838)
2020
£’000
-
-
(887)
(887)
Revenue recognised during 2021 that was included in the contract liability balance at the beginning of the
year amounted to £0.89m (2020: £1.66m). There was no revenue recognised in the year from performance
obligations satisfied in previous periods. The satisfaction of the group’s performance obligations typically
occurs before invoicing and payment for activation fees and other charges for services that are satisfied at a
point in time, giving rise to accrued income. For airtime charges, which are satisfied over a period of time,
payment will typically occur during the period being invoiced, which is usually done at the start of a calendar
month or a quarter, giving rise to deferred income.
Significant movements arose due to the disposal of Quickline. Contract liabilities disposed of amounted to
£0.10m deferred income as at the date of sale.
Balances of contract assets and liabilities related to the continuing operations in 2021 were £nil accrued
income and £0.84m deferred income respectively.
28. Post Balance Sheet Events
SkyMesh, Australia
As announced in February 2021, SkyMesh signed an agreement with Kacific to provide services into New
Zealand and has signed its first customers in December 2021.
The Company completed the acquisition of customers and certain business assets from Clear Networks
(Pty) Ltd ("Clear") in January 2022. Clear is an Australian ISP based in Melbourne offering a suite of NBNCo
broadband products, as well as a private fixed wireless network serving primarily the greater Melbourne
area. This acquisition has helped the company strengthen its presence in this area as SkyMesh looks to
grow its presence across Australia. Clear has 2.2k customers (3k connections) which were acquire for an
initial purchase price of AUS$2.4m (£1.3m) with a further maximum earn out potential of up to AUS$0.5m
(£0.3m). The earn out based on the total contract value of the sales pipeline delivered in the 12 months
post completion.
Further disclosure of business combination accounting for the purposes of IFRS 3 has not been presented
as the acquisition accounting analysis of the transaction has not yet been completed.
113