l
i
B
g
b
u
B
r
o
a
d
b
a
n
d
p
c
l
|
A
n
n
u
a
l
R
e
p
o
r
t
i
&
F
n
a
n
c
a
i
l
S
t
a
t
e
m
e
n
t
s
2
0
2
2
Bigblu Broadband plc
Bigblu Broadband plc
Annual Report & Financial Statements for the year ended 30 November 2022
A Company Registered in England & Wales No. 09223439
265204 Bigblu_Cover with Spine.indd 2-3
265204 Bigblu_Cover with Spine.indd 2-3
25/04/2023 10:53
25/04/2023 10:53
Company Information
SOLICITORS
Burness Paull LLP
50 Lothian Road
Festival Square
Edinburgh, EH3 9WJ
REGISTRARS
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
AUDITORS
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
DIRECTORS
M Tobin OBE
A Walwyn
F Waters
P Howard
C Mills
P Moses
COMPANY REGISTRATION NUMBER
09223439
COMPANY SECRETARY
B Harber
REGISTERED OFFICE
6th Floor
60 Gracechurch Street
London
EC3V 0HR
BROKER & NOMINATED ADVISER
finnCap Ltd
60 New Broad St
London
EC2M 1JJ
2022 CONTINUING BUSINESS
HIGHLIGHTS
TOTAL REVENUE
£31.2m – up 15.1%
2022
2021
£31.2m
£27.1m
Adjusted EBITDA
£5.1m – up 11.4%
2022
2021
£5.1m
£4.6m
Net Cash
£4.2m
2022
2021
EPS
£4.2m
£5.2m
Loss 5.0p
Loss 5.0p
Profit 46.9p
Basic
2022
2021
Adjusted
2022
4.4p
2021
4.3p
Contents
OVERVIEW
1........Company Overview
2........Company Snapshot
STRATEGIC REPORT
4........Chairman’s Statement
6........Chief Executive Report
11......Financial Review
22......Principal Risks and Uncertainties
25......Section 172 (1) Statement
GOVERNANCE
26......Directors’ Report
31......Board of Directors
34......Statement of Directors’ Responsibilities
35......Corporate Governance Statement
48......Annual Statement of the Remuneration Committee Chairman
FINANCIAL STATEMENTS
54......Independent Auditor’s Report
59...... Consolidated Statement of Comprehensive Income
60......Consolidated Statement of Financial Position
61......Company Statement of Financial Position
62......Consolidated Statement of Cash Flows
63......Company Statement of Cash Flows
64......Consolidated Statement of Changes in Equity
65......Company Statement of Changes in Equity
66......Notes to the Financial Statements
IBC.....Company Information
265204 Bigblu_Cover with Spine.indd 5-6
265204 Bigblu_Cover with Spine.indd 5-6
25/04/2023 10:53
25/04/2023 10:53
Company Overview
Technology that opens
doors to the world
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 typically 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 FWA delivering between 30
Mbps and 500Mbps for consumers, and up to 1 Gbps
for businesses. BBB provides customers with 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.
* Superfast is defined as broadband speeds in excess of 30Mbps
** Ultrafast is defined as broadband speeds in excess of 100Mbps
Bigblu Broadband plc / Annual Report and Accounts 2022
1
265204 Bigblu_pp001-pp024.indd 1
265204 Bigblu_pp001-pp024.indd 1
25/04/2023 10:55
25/04/2023 10:55
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Company Snapshot
OVERVIEW
The Group utilises a number of Key Performance Indicators (‘KPIs’) to
measure performance against our strategy. A description of these KPIs
and performance against them for continuing operations is set out below:
CUSTOMER NUMBERS
CUSTOMER NUMBERS
CUSTOMER NUMBERS
CUSTOMER NUMBERS
CUSTOMER NUMBERS
AUSTRALASIA
13%
13%
13%
13%
87%
87%
87%
87%
REVENUE
REVENUE
REVENUE
REVENUE
REVENUE
2%
2%
2%
2%
13%
13%
13%
13%
85%
85%
85%
85%
ADJUSTED EBITDA
ADJUSTED EBITDA
ADJUSTED EBITDA
ADJUSTED EBITDA
ADJUSTED EBITDA
(15%)
(15%)
(15%)
(15%)
19%
19%
19%
19%
96%
96%
96%
96%
Australasia
Australasia
Australasia
PLC
Australasia
PLC
PLC
PLC
Nordics
Nordics
Nordics
Nordics
CUSTOMER NUMBERS
(‘000)
REVENUE
(£m)
51.5
£26.5m
ADJUSTED EBITDA
(£m)
£5.0m
includes
Customer numbers closed up
3.5% on the prior year (FY21:
49.7k), which
the
customers acquired from Clear
(2.2k). Net growth of 1.8k over
the course of the year inclusive
of 2.2k customers acquired with
the Uniti acquisition
Revenues increased to £26.5m
(PY: £21.8m), up 21.6% (LFL
excluding the Clear acquisition is
14.2%) on prior year. The increase
in revenue of 31% was a result
of the continued organic growth
in customer numbers and an
improved APRU
improved by
EBITDA
25%
following the acquisition, adding
£0.3m, and continued cost
efficiencies across the company
Nordics
CUSTOMER NUMBERS
(‘000)
REVENUE
(£m)
7.9
£4.0m
ADJUSTED EBITDA
(£m)
£1.0m
Revenue in the year reduced by
£0.6m (13%) due to the loss of
customers
through exceptional
churn
reduced by
Adjusted EBITDA
£0.9m (47%) in the year due to
the impact of the cyber-attack and
lower customers
the decrease
in
Reflecting
customer numbers associated
with the impact of the satellite
cyber-attack on
the satellite
provider
to our Norwegian
business and the demounting of
non-profitable sites
PLC
REVENUE
(£m)
£0.7m
Revenue in line with prior year
ADJUSTED EBITDA
(£m)
(£0.9m)
Reduced by 31% in the year as we
managed to control costs along
with revenue remaining consistent
2
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 2
265204 Bigblu_pp001-pp024.indd 2
25/04/2023 10:55
25/04/2023 10:55
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Australasia
Nordics
United
Kingdom
KEY
Operational Locations
265204 Bigblu_pp001-pp024.indd 3
265204 Bigblu_pp001-pp024.indd 3
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
3
Chairman’s Statement
2022 was a year of continued progress
for the Group and we look forward to
2023 as we seek to create further value
for our Shareholders
MICHAEL TOBIN OBE
Chairman
We started the year with the acquisition of customers and
certain assets from Clear Networks in Australia and in
December 2022 we announced the conditional purchase of
the satellite operations of Harbour ISP PTY LTD, a subsidiary
of Uniti Group LTD in Australia. In both instances these
acquisitions were accretive in nature and helped cement
our fully owned subsidiary SkyMesh’s leading position in the
marketplace. Working closely with Kacific, our New Zealand
network partner we are seeing traction in this marketplace
following the relaxing of COVID travel restrictions. In the
Nordics we have continued to right size the business,
demounting unprofitable sites as well as launching new
products to ensure that we offer our customers a wide range
of wire free products that best suit their needs.
Last year we announced the disposal of our majority interest
in Quickline to funds managed by Northleaf Capital Partners
(“the Disposal”) and this was completed in June 2021. The
conditions attached to achieving the deferred consideration
were not met during the period. As previously disclosed,
Quickline faced challenges in securing 5G equipment
reflecting the global supply issues affecting microchips and
associated delays in the commercial launch of stand-alone
5G services which has impacted the timing of 5G being
approved by the DCMS as a gigabit capable service. This
resulted in zero deferred consideration being receivable.
More positively, both 5G and FTTP build programmes are
now accelerating, supported by a headcount of c200 and
Quickline is still targeting to pass 500,000 premises as per
the original business plan. Northleaf continues to be a great
partner, having provided significant additional capital to
support the business. The Company retains a 4.0% stake
in this rapidly growing and well-financed alternative network
operator.
4
Bigblu Broadband plc / Annual Report and Accounts 2022
In December the company announced the conditional
purchase by its fully owned Australian business, SkyMesh
PTY LTD of the satellite operations of Harbour ISP PTY LTD,
a subsidiary of Uniti Group LTD in Australia (the “Acquisition”),
for a total consideration of up to AUD$4.72m (c.£2.7m), to be
satisfied from existing cash resources including our revolving
credit facilities with Santander.
The satellite operations being acquired currently consist
of c.6k customers. Post completion following the relevant
approvals having been obtained, the customer base will be
transferred to SkyMesh who will provide full ongoing support
services from its Australian Customer Engagement Centre.
Pursuant to the terms of the acquisition agreement, Uniti
will continue to provide services for up to three months post
completion to ensure a smooth transition of the customer
base. The transfer of the customer base is expected to be
immediately earnings enhancing. Following completion,
the Directors anticipate that the acquired operations are
expected to generate annualised revenues of c.£2.5m and
EBITDA of c.£0.7m with positive cash generation, enabling
the Group to continue to reinvest and grow the business in
the Australian market. Pro forma previous 12 months revenue
and underlying adjusted EBITDA for the operations being
acquired were £2.4m and £0.6m respectively.
The Directors believe that the profitability of operations
being acquired should improve under Bigblu Broadband’s
ownership due to the Group’s better operational gearing
and economies of scale and SkyMesh’s dedicated focus on
customers in this sector. The Board will continue to focus
on creating significant shareholder value through the rapid
scaling of its Australasian Operations. In addition, the Board
also continues to explore all options to realise value for BBB
shareholders from SkyMesh, which could include a potential
ASX listing of SkyMesh.
265204 Bigblu_pp001-pp024.indd 4
265204 Bigblu_pp001-pp024.indd 4
25/04/2023 10:55
25/04/2023 10:55
Customer net
growth up 1.0%
0.6k
Average Revenue
Per Unit
(FY21: £39.30)
£43.03
Recurring revenue
(FY21: 93%)
Net cash
(FY20: £5.2m)
93%
£4.2m
Adjusted operating
cash flow to EBITDA
conversion (FY21: 114%)
113%
In addition, we continued to have excellent support from
our main banking partner Santander and agreed to an
extension of the existing Revolving Credit Facilities in
November 2022 from £5m to £10m.
The Board will continue to focus on enhancing shareholder
value from the Continuing Group, which has significant
opportunities for continued growth and value realisation.
As it did with the Harbour acquisition, it will consider further
strategic M&A opportunities that are accretive in nature.
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 59.4k after growth of
0.6k customers after exceptional churn relating to the
Cyber-attack (1.6k, 1.8k including demounting) in the
Nordics with one of our key network partners. We have
continued to invest in our back-end systems, to ensure
we are well placed going into 2023 to capitalise on
opportunities in our target markets.
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 2022, and we will continue to interact
with shareholders in a regular and proactive manner. This
year the AGM will be held on 23 May 2023 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 2022.
Everyone played their part in a demanding yet successful year
in the Group’s life. I, and the rest of the Board, fully 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 2023 with
confidence.
•
During the year, we generated revenue of £31.2m in our
business, a 12.3% increase in like-for-like revenues as
well as improved profitability, and a higher adjusted free
cash flow generation.
Michael Tobin OBE
Chairman
20 March 2023
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 2023 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, at the same
time ensuring a strong focus on realising shareholder value.
265204 Bigblu_pp001-pp024.indd 5
265204 Bigblu_pp001-pp024.indd 5
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
5
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Chief Executive Report
The Group has continued its objectives of widening
the product offerings in each territory with our network
partners while still benefiting from the strong visibility
afforded by the high percentage of recurring revenues.
ANDREW WALWYN
CEO
SkyMesh has continued to be the market
leader in the satellite broadband market
with a total market share post the recent
Uniti transaction of c.40% (FY21: c.36%).
is consolidating
SkyMesh
its purchase
of Clear Networks and expanded into NZ
during the year and the recently announced
acquisition of the satellite customers of
Uniti further strengthens our position in the
market
During the Period the Group invested in
refining and enhancing the Company’s
service proposition in the Nordic market
to support the next generation ultrafast
broadband via wireless 5G FWA
6
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 6
265204 Bigblu_pp001-pp024.indd 6
25/04/2023 10:56
25/04/2023 10:56
OVERVIEW
We started the year with a couple of initial setbacks, including
a cyber-attack to one of our satellite providers affecting c.3k
customers in Norway, as well as a delayed 5G launch in the
region due to chip shortages. Despite this we are satisfied with the
continued progress shown by the Group in the Period.
Extensive effort has been made across the business units to
switch customers into more attractive packages at the expense
of net adds, with c.9k migrations in the period and net adds of
0.6k, of which c.2.2k were associated with the Clear acquisition
in Australia. We ended the period with 59.4k customers. The
recently completed Uniti transaction has increased our total
customer base to c.66k and we remain focused on our strategy
in Australia of organic growth combined with targeting suitable
bolt-on acquisition opportunities. In addition, we remain focused
on creating and realising shareholder value for BBB Shareholders
and in this regards we are exploring all options for the Australasian
business including a potential ASX listing.
The necessary investment made to improve our offerings in
Norway, resulted in c.1k new FWA 5G customers at the period end.
Work is still required to improve the performance of the Norwegian
business including product offerings, costs and systems. We also
remain focused on ensuring our operations are run as efficiently
as possible and post period end regrettably we have had to make
some headcount reductions in our Norwegian business.
Despite the global economic environment, the Group continues to
demonstrate strong year-on-year revenue growth underpinned with
a high percentage of recurring revenue. We remain confident in our
ability to deliver further attractive returns for shareholders from our
operations in Australasia and to realise a return from the Norwegian
business together with the 4.0% equity stake in Quickline. As
we enter the new financial year, there are opportunities for each
business unit to deliver further shareholder value as we continue to
support customers unserved and underserved in the digital divide,
whilst at the same time improving our product range. Operationally
we will remain focused, in conjunction with our network partners,
on increasing gross adds and reducing churn as well as ensuring
our customers are on the most suitable packages and receive the
best customer support. Alongside this, we will continue to seek to
deliver against our strategic objective of maximising and realising
shareholder value.
OPERATIONAL REVIEW
The Group has two distinct businesses, in Australasia and the
Nordics, with a total of c66k customers post the Uniti acquisition
and given their respective strengths, each of the business units
has potential opportunities to enhance further shareholder value.
AUSTRALASIA
Our Australian business SkyMesh, is the leading Australian
satellite broadband service provider having been named Best
Satellite NBN Provider for the fourth year in succession (2019-
2022). SkyMesh has continued to be the market leader in the
satellite broadband market with a total market share post the
recent Uniti transaction of c.40% (FY21: c.36%).
SkyMesh is consolidating its purchase of Clear Networks and
expanded into NZ during the year and the recently announced
acquisition of the satellite customers of Uniti further strengthens
our position in the market.
Our Australasian business performed well during the year. As a
result of a growth in customers together with ARPU improvements,
SkyMesh revenues increased to £26.5m (PY: £21.8m), up 21.6%
(LFL excluding the Clear acquisition is 14.2%) on prior year, with
adjusted EBITDA of £5.0m, up 25.1% on prior year (FY21: £4.0m).
The Clear acquisition contributed EBITDA of £0.3m. This trading
performance supported both a positive adjusted operating cash
inflow of £5.6m and a positive adjusted underlying free cash flow,
before group transfers of £4.4m. Customer numbers closed at
51.5k at year end, an increase of 3.5% on the prior year (FY21:
49.7k), which includes the customers acquired from Clear (2.2k).
Post period end, we completed the acquisition of the Uniti satellite
operations with c.6k customers which are now in the process of
being transferred to SkyMesh by the Company’s half year.
The emergence of 5G and LEO satellite technologies is expected
to lead to accelerated uptake of non-fibre broadband internet
services in Australasia. Starlink has launched in the region with
strong initial promotional offers. This is impacting current churn
rates and we are monitoring such marketing activity. We believe we
can counter such threats to the business by expanding the product
offerings as well as addressable markets. Further acquisitions and
new product opportunities are emerging as SkyMesh heads into
2023 with its product offering likely to offer faster speeds / capacity,
leading to continued increases in customer numbers.
The Board’s focus will be on organic growth with our network
partners together with suitable accretive bolt on acquisitions
that could accelerate the Company’s presence into the wider
Australasia region and importantly accelerate the scaling of the
Australasian business. In addition, the Board continues to explore
all options to realise value for BBB shareholders from SkyMesh,
which could include an ASX listing of SkyMesh.
Bigblu Broadband plc / Annual Report and Accounts 2022
7
265204 Bigblu_pp001-pp024.indd 7
265204 Bigblu_pp001-pp024.indd 7
25/04/2023 10:56
25/04/2023 10:56
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CHIEF EXECUTIVE REPORT
(CONTINUED)
NORDICS
Reflecting the decrease in customer numbers associated with
the impact of the satellite cyber-attack on the satellite provider
to our Norwegian business and the demounting of non-profitable
sites, BB Norge (rebranded Brdy AS.no), ended FY22 with
customer numbers at 7.9k, down on the previous year (FY21:
9.1k). Consequently, revenues for BB Norge were £4.0m, down
13.0% on the prior year (FY21: £4.6m). After some initial delays,
the 4G/5G FWA revenue stream has grown in FY22 and is now
contributing to early growth in new customers and revenue.
Adjusted EBITDA for the region was £1.0m, down 47.3% on prior
year (FY21: £1.9m). Adjusted operating cash was an outflow of
£0.1m and adjusted underlying free cash flow was an outflow of
£1.0m following capital expenditure of £0.7m and set up costs
associated with the 5G FWA of £0.2m. As noted above, post
period end further cost saving initiatives were implemented in the
region and regrettably we have had to make some headcount
reductions in this business.
During the Period the Group invested in refining and enhancing
the Company’s service proposition in the Nordic market to
support the next generation ultrafast broadband via wireless
5G FWA, delivering speeds up to 500 Mbps with unlimited data
packages. As reported previously this is beginning to show early
momentum with growing traction in the market (c.1k customers)
and great customer satisfaction being reported.
The Board continues to evaluate the opportunity to refine and
enhance the Group’s service proposition in the Nordic market.
Initiatives include the launch of new satellite offerings across the
region offering speeds of 50Mbps and unlimited capacity. The
Directors consider that the Group’s ability to offer a combination
of services including our own Fixed Wireless network, 5G FWA
via Telenor and satellite solutions in the Nordics provides the
Group with potential scope to expand its presence and reach in
this region and create shareholder value. At the same time the
Board are examining all opportunities to realise shareholder value
including full or partial disposal, partnership, or a merger.
OPERATIONAL PERFORMANCE
Net customer growth in 2022, was approximately 0.6k (post the
1.8k loss of customers in the Nordics following the cyber-attack
event and demounting, and the 2.2k net adds from the Clear
acquisition), resulting in a closing continuing customer base of
59.4k (FY21: 58.8k).
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 £31.2m (FY21: £27.1m) with revenue growth of 15.1%.
Revenue in satellite was £24.7m, up on prior year by 14% (FY21:
£21.7m) due in the main to customer growth, plan switching in
Australasia, and the satellite base acquired from Clear. Revenue
in fixed wireless was £4.9m, up on prior year by 7% (FY21:
£4.6m) Revenue in 5G was £0.9m in the year (FY21: £nil) due
to growth in Norway. PLC added £0.7m (FY21: £0.7m) from
services related revenue.
Recurring revenue, defined as revenue generated from the
Group’s broadband airtime, which is typically linked to contracts
at £28.9m represented 93% of total revenue (FY21 £25.6m
represented 94% of total revenue).
Average Revenue Per User (“ARPU”) increased 9.5% year on year
to £43.03 (FY21: £39.30) due in the main to a higher percentage
mix of larger packages across the Australian region. Average
underlying customer churn increased to 28.4% (FY21: 21.3%) as
a result of the removal of COVID Support tariffs in Australia and
the continued fibre encroachment in Norway.
Adjusted EBITDA for the period was £5.1m, showing a solid
underlying performance, and representing an adjusted EBITDA
margin of 16.3% compared to £4.6m in FY21 on a like for like
basis and an adjusted EBITDA margin of 16.9%. This continues
to demonstrate the progress made in driving the quality of the
consumer offering, the margin review work being undertaken and
improving cost efficiencies.
8
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 8
265204 Bigblu_pp001-pp024.indd 8
25/04/2023 10:56
25/04/2023 10:56
ACCELERATING TECHNOLOGY
EVOLUTION
PRODUCTS
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, at
c 1k customers at the period end it 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 coming 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 new product offerings from NBN Co will
allow 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
Whilst we use a digital-first strategy to both acquire and retain
new and existing customers we also promote our Refer-a-
friend programmes in country. 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 by proactively migrating them to more
appropriate tariffs in our Australasian business.
CONTINUED GOVERNMENT SUPPORT
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 full fibre broadband to the
premises is unlikely to become a reality for many customers.
In Australia, SkyMesh commanded a 55% market share of net
new adds under the Government funded NBNCo scheme during
the last financial year. This performance has continued into Q1
FY23.
POST BALANCE SHEET EVENTS
We highlight the following post balance sheet events:
SKYMESH, AUSTRALIA
The Company announced that its fully owned Australian business,
SkyMesh PTY LTD had completed the acquisition of the satellite
operations of Harbour ISP PTY LTD, a subsidiary of Uniti Group
LTD in Australia (the “Acquisition”). The total cash consideration
paid on completion was AUD$4.72m (£2.7m) with a retention of
AUD$0.2m (£0.1m), to be paid in March 2023 post reconciliation
of customer numbers. The cash consideration paid on completion
was satisfied from existing cash resources including our revolving
credit facilities with Santander. The satellite operations acquired
consisted of c.6k customers. The customer base is being transferred
to SkyMesh who will provide full ongoing support services from its
Australian Customer Engagement Centre. Pursuant to the terms
of the acquisition agreement, Uniti will continue to provide services
for up to three months post completion to ensure a smooth
transition of the customer base. As previously announced, the
Directors anticipate that the acquired operations are expected to
generate annualised revenues of c.£2.5m and EBITDA of c.£0.7m
with positive cash generation, enabling the Group to continue
to reinvest and grow the business in the Australian market. The
Directors believe that the profitability of operations acquired should
improve under Bigblu Broadband’s ownership due to the Group’s
better operational gearing, economies of scale and SkyMesh’s
dedicated focus on customers in this sector.
265204 Bigblu_pp001-pp024.indd 9
265204 Bigblu_pp001-pp024.indd 9
25/04/2023 10:56
25/04/2023 10:56
Bigblu Broadband plc / Annual Report and Accounts 2022
9
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CHIEF EXECUTIVE REPORT
(CONTINUED)
POST PERIOD REDUNDANCIES /
REORGANISATIONS
Since the year end the Group has gone through a reorganisation
of our Norwegian business and also reflected on our reduced UK
scale. This has resulted in redundancies in our Norway business
and our UK head office.
In Norway we are examining splitting the business into two legal
entities, recognising the different attributes of each being our
satellite and 5G technology business, typically lower CAPEX,
and our infrastructure business, typically higher CAPEX. This has
resulted in making approximately 30% of the workforce in our
Nordic business redundant in the first quarter of 2023, with an
annualised cost saving of c.£0.4m.
Due to the size of the Group, after the recent disposals in FY20
and FY21, the Group has sought to reduce head office costs
to a level sustainable for the current continuing operations. This
will result in approximately 75% of the central team being made
redundant, with annualised savings in the region of £0.5m. The
internal process has commenced with all planned redundancies
expected to be complete by May 2023.
STRATEGY
Within the business units, we have worked continuously with
our network partners in the regions to offer our customers a
selection of products that best suits their needs. We continue
to see the demand for our products increasing with an element
of home working in the Nordics and Australasia now being the
norm, and the consequential need for faster broadband solutions
to the home. Whilst recognising the pressure on individuals and
companies’ disposable income and profits, we firmly believe that
the updated solution set that the Group offers to its customers
is becoming more important and a very necessary utility cost.
The opportunity in the super-fast broadband market remains
exciting across the businesses as it is changing significantly and
accelerating at pace. Where in the past a service of 30Mbps was
seen as an appropriate solution to a typical customer, nowadays
this is upward of 50Mbps and our satellite, fixed wireless and
FWA 5G solutions will ensure that all unserved and underserved
customers can receive an appropriate solution. We are pleased
that our network partners are continuously developing products
to meet customer needs.
Specifically, following the recent acquisitions for the SkyMesh
business in Australia, the Board believes that its strategy of organic
growth complemented by further bolt-on acquisitions should
accelerate the Company’s presence into the wider Australasia
region as it considers all options to realise value for shareholders,
including a potential spin out ASX listing, as previously announced.
The Board continues to believe the business has the potential to
achieve 100,000 customers in the region over the next three years
through organic and acquisitive growth.
10
Bigblu Broadband plc / Annual Report and Accounts 2022
In Norway, following the launch of new FWA 5G products and the
new satellite offerings, we are showing early signs of stabilising,
although the business remains cash consumptive.
The Board will continue to look at all opportunities to maximise
shareholder value from its operations in Australasia, Norway and
its retained 4.0% stake in Quickline.
OUTLOOK
The Group has positioned itself at the forefront of the alternative
super-fast and ultrafast broadband industry in its chosen markets.
Similar to many businesses, there are current headwinds which
require addressing and consideration in how we operate and
deliver services, including existing and new customers’ disposable
incomes, inflationary pressures together with competition from
other providers such as Starlink. We continue taking the actions
necessary in carefully extending our product offerings, upgrading
our systems and reducing our cost base to address such
challenges head on. Since the period end, the Group is growing
customers, revenues and profitability, supported by the Harbour
acquisition. The Group has continued its objectives of widening
the product offerings in each territory with our network partners
while still benefiting from the strong visibility afforded by the high
percentage of recurring revenues. Across our operations, work
continues to improve the performance by upgrading the systems
and reducing the cost base.
We continue to 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 valuable assets that
have established important strategic positions in 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
20 March 2023
265204 Bigblu_pp001-pp024.indd 10
265204 Bigblu_pp001-pp024.indd 10
25/04/2023 10:56
25/04/2023 10:56
Financial Review
important year
2022 was another
for the Group having
demonstrated strong progress against its internal and market
expectations for Revenue, EBITDA and cash targets as well as
identify and complete accretive acquisitions of Clear and Harbour
in Australia
FRANK WATERS
CFO
12.3%
Like for like revenue growth
on a constant Currency basis
£5.1m
Adjusted EBITDA up 11%
for the continuing Business (FY21: £4.6m)
£5.8m
Adjusted operating cashflow inflow
(FY21: Inflow £5.2m)
£3.7m
Adjusted free cash flow inflow
(FY21: Inflow £2.1m)
265204 Bigblu_pp001-pp024.indd 11
265204 Bigblu_pp001-pp024.indd 11
25/04/2023 10:56
25/04/2023 10:56
Bigblu Broadband plc / Annual Report and Accounts 2022
11
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW FINANCIAL REVIEW
(CONTINUED)
2022 was another important year for the Group having demonstrated
strong progress against its internal and market expectations for
Revenue, EBITDA and cash targets as well as identify and complete
important acquisitions in Australia in the period and just after. We
reviewed and increased our Revolving Credit Facilities (“RCF”)
with continued support from Santander and the Group generated
adjusted operating cash in excess of 100% of EBITDA.
FINANCIAL REVIEW
Total revenue including recurring airtime and other income
(equipment sales and installation sales) in the period was £31.2m
(FY21: £27.1m).
Adjusted EBITDA was £5.1m (FY21: £4.6m), representing an
adjusted EBITDA margin of 16.3% (FY21: 16.9%).
The focus of the Board now turns to creating additional
shareholder value from the remaining business units being our
Australasian operations (SkyMesh Australia, Brdy New Zealand)
and, our Nordics business (Brdy). In addition, the Company also
continues to hold a valuable minority interest in Quickline.
The Board remains focused on delivering further increases in
shareholder value from its remaining business units through
organic growth whilst considering selective accretive acquisitions
in the territories we operate in.
Depreciation, including ‘right of use assets’, increased to £3.0m
in FY21 from £1.4m in FY21, an increase of £1.6m analysed as
follows; depreciation associated with the tower upgrade program
investment in Norway in FY21 (£0.5m), an impairment write down
of old assets in the Norwegian region (£1.0m), and the assets
acquired through the Clear acquisition (£0.1m)
Amortisation increased to £0.7m in FY22 from £21k in FY21 due
to the amortisation on the customer base acquired from Clear
Networks in the year (£1.4m), which will be written off over a
2-year period from acquisition.
Finance costs were £0.1m in FY22 relating to the undrawn RCF
facility in the period compared with £0.8m in FY21 where there
were drawn RCF facilities.
FINANCIAL REVIEW – CONTINUING OPERATIONS
KEY PERFORMANCE INDICATORS FOR CONTINUING OPERATIONS
The Group utilises several Key Performance Indicators (‘KPI’s’) to measure performance against our strategy. A description of these
KPI’s and performance against them is set out below.
KPI
2022
2021
Description
2022 performance
Customer Base
59,385
58,832
2,336
6,024
Underlying
Customer
Net Organic
Connections
Gross Underlying
Churn
28.4%
21.3%
gross
organic
Represents
total
connections plus acquisitions,
less
disposals, less lost customers (churn) and
base management, including demounting
Represents gross connections in the
period less lost customers (churn) in
the period. Includes M&A and excludes
exceptional churn.
Gross underlying churn defined as the
number of subscribers who discontinue
their service as a percentage of the
average total number of subscribers
within
excludes
exceptional churn in association with the
demounting program in Norway
the period
and
1% increase despite cyber-attack and
delayed 4G / 5G launch
Net connections split c.1.8k Australia
and c.0.5k Norway. The focus during
the period was on switchers with c 9k
during the period. Switchers arise where
we proactively migrate a customer to a
more appropriate tariff during the period.
Underlying churn rate of 30.3% (FY21:
28.6%) in Australia following removal
of COVID support and 22.4% (FY21:
15.2%) in Norway. (35.1% (FY21: 39%)
in Norway Including demounting churn)
ARPU
£43.03
£39.30
Calculated by dividing total revenues from
all sources by the average customer base
Higher by 9.5% due in the main to
improved product mix.
12
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 12
265204 Bigblu_pp001-pp024.indd 12
25/04/2023 10:56
25/04/2023 10:56
KPI
2022
2021
Description
2022 performance
Revenue
£31.2m
£27.1m
Adjusted
EBITDA
£5.1m
£4.6m
£5.8m
£5.2m
£3.7m
£2.1m
Adjusted
Operating
Cash Flow –
Continuing
Operations
Adjusted Free
Cash Flow –
Continuing
Operations
Basic EPS
(5.0p)
46.9p
Adjusted EPS
4.4p
4.3p
from
sales
includes
Revenue
all
operations. Like for like (LFL) revenue
treats acquired businesses as if they were
owned for the same period across both
the current and prior year and adjusts for
constant currency, omitting any distinct
differences
the numbers.
Business disposed of in the period are
excluded from the calculation.
that skew
Earnings before share based payments,
depreciation,
intangible amortisation,
impairment costs, acquisition costs,
one-off employee related costs, deal
related costs and start-up costs
is
the measure of the Group’s operating
performance. It evaluates performance
without factoring in financing decisions,
accounting decisions or tax environments
or provisions for 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.
Adjusted Free cash flow being cash (used)/
generated by the Group after investment
in capital expenditure, servicing of debt
and payment of taxes and excludes items
identified as exceptional in nature.
Basic Earnings per share (EPS) is the
portion of the Continued and discontinued
business’s loss of £2.9m (FY21: Profit
£27.0m) divided by the weighted average
number of shares.
Adjusted Earnings per share (EPS) is the
Continued business’s profit/(loss) after tax
before exceptional costs, share based
payments, impairment of Fixed Assets
and deferred tax adjustments, divided by
the weighted average number of shares.
Total Revenue increased by 15.1%.
Adjusted EBITDA increase of 11.4%
(£0.5m) driven by revenue growth and
the acquisition of customers from Clear
Networks, which contributed £0.2m of
EBITDA in FY22.
EBITDA Margin of 16.3% (FY21: 16.9%)
following increased marketing spend of
£0.2m and £0.2m increased Australian
Headcount costs.
Adjusted operating cash inflow was
£5.8m (FY21: £5.2m), an improvement
of £0.6m YOY, due to increased EBITDA
forex and non-cash
(£0.5m),
charge
lower working
capital improvement year on year £0.9m.
(£0.9m), and
lower
in
inflow
inflow
free cash
improved £0.6m,
Adjusted
the
year was £3.7m (FY21: £2.1m), an
improvement of £1.6m YOY. Operating
cash
lower
capital expenditure of £0.8m at £1.4m
(FY21: £2.2m) and lower interest by
£0.3m at £0.1m (FY21: £0.4m), offset by
increased tax charge of £0.1m at £0.6m
(FY21: £0.5m)
Represents increased loss in the year.
Prior year reflected the gain on disposal
of majority
to
Northleaf
in Quickline
interest
Increased marginally post
EBITDA
improved
265204 Bigblu_pp001-pp024.indd 13
265204 Bigblu_pp001-pp024.indd 13
25/04/2023 10:56
25/04/2023 10:56
Bigblu Broadband plc / Annual Report and Accounts 2022
13
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW FINANCIAL REVIEW
(CONTINUED)
Total customers at the period end including in-flight customers for continuing operations were 59.4k (FY21: 58.8k). During the year we
delivered underlying 2.4k net adds (FY21: 6k). This is summarised as follows:
Opening base
Switched out customers
Switched in customers
Gross Adds
Acquisition
Churn
Underlying Net Growth
Exceptional churn
Closing Base
FY22
000
58.8
(9.0)
9.0
16.7
2.2
(16.5)
2.4
(1.8)
59.4
FY21
000
57.2
(3.0)
3.0
20.4
-
(14.4)
6.0
(4.4)
58.8
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) increased to an
average annualised churn rate of 28.4% in FY22 (FY21: 21.3%),
before exceptional churn of 1.8k, relating to the cyber-attack
in Norway during the year (1.6k) and the final elements of the
demounting project commenced in FY21 (0.2k).
Revenue in satellite was £24.7m, up on prior year by 14% (FY21:
£21.7m) due in the main to customer growth, plan switching in
Australasia, and the satellite base acquired from Clear. Revenue
in fixed wireless was £4.9m, up on prior year by 7% (FY21:
£4.6m) Revenue in 5G was £0.9m in the year (FY21: £nil) due
to growth in Norway. PLC added £0.7m (FY21: £0.7m) from
services related revenue.
In our Nordics business underlying churn was 22.4% (35.1%
including exceptional demounted customers). (FY21: 15.2%).
In our Australian business underlying churn was 30.3% (FY21:
28.6%) due to the removal of COVID Support packages and
continued technical challenges on the Skymuster plus product,
which will be updated in FY23 to an improved product which
would be more attractive in terms of speed and data packages,
which should reduce churn. Competitors, such as Starlink, have
also contributed to the churn with aggressive marketing, and we
continue to work with NBNCo to counter this.
In the first three months of FY23, underlying churn has slightly
reduced, and importantly we are starting to roll out next
generation products in Australia, New Zealand and Norway.
REVENUE
Total revenue including recurring airtime and other income
(equipment sales and installation sales) for the period increased by
£4.1m (15.1%) to £31.2m (FY21: £27.1m). Total revenue on a like-
for-like and constant currency basis increased in the year by 12.3%,
(FY21: increase 15.3%) as the Group continued to add customers
during the year but importantly improved ARPU by 9.5%.
ARPU, calculated by dividing total revenues from all sources
by the average customer base, in 2022 was £43.03 per month
(FY21: £39.30) due to higher revenues, specific to the Skymuster
Plus products in Australia as well as switching customers to more
appropriate packages.
14
Bigblu Broadband plc / Annual Report and Accounts 2022
revenue, defined as
Recurring
from
the Group’s broadband airtime, which is typically linked to
contracts and monthly subscriptions, was £28.9m in the period,
representing 93% of total continuing revenue (FY21: 94%).
revenue generated
MARGINS AND PROFITABILITY
Gross profit margin was c.43%. (FY21: c.45%) due in the main
to the planned product mix changes. In Norway increased
5G revenue at lower margins resulted in a 10.6% decrease in
margins from 79.7% to 71.2%. In Australia gross profit improved
2.5% from 35.8% to 36.7% due to product mix.
Distribution and Administrative Expenses, pre-exceptional costs,
increased to £11.7m (FY21: £9.0m) due to increased headcount
costs, marketing costs, depreciation and amortisation on
the customer acquisition from Clear. Post items identified as
exceptional in nature, these expenses increased to £14.8m
(FY21: £13.1m) representing 47.3% of revenue (FY21: 48.2%)
due to specific deal related and operational exceptional costs.
Adjusted EBITDA increased 11.4% for the period at £5.1m
representing an adjusted EBITDA margin of 16.3% compared to
£4.6m in FY21 and an adjusted EBITDA margin of 16.9%.
265204 Bigblu_pp001-pp024.indd 14
265204 Bigblu_pp001-pp024.indd 14
25/04/2023 10:56
25/04/2023 10:56
CONTINUING OPERATIONS ANALYSIS
A reconciliation of the adjusted EBITDA to adjusted PAT of £2.6m (FY21: £2.5m profit) is shown below:
Adjusted EBITDA
Depreciation
Impairment of Fixed Assets
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 –
post exceptional items
Adjusted EBIT
Interest charge
Tax (charge) / credit
Impairment of Fixed Assets
Amortisation
Deferred taxation adjustment in Norway
Adjusted PAT
1
2
2
3
4
5
6
7
7
7
2022
£000
5,101
(2,076)
(966)
(702)
1,357
(309)
1,048
(2,707)
(1,659)
1,357
(124)
(1,031)
966
702
714
2,584
2021
£000
4,577
(1,390)
-
-
3,187
(163)
3,024
(3,922)
(898)
3,187
(798)
76
-
-
-
2,465
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 11.4% to
£5.1m (FY21: £4.6m).
2 Total depreciation increased to £3.0m in FY22 from £1.4m in
FY21 due to the capitalisation of costs associated with the
upgrading project in Norway last financial year now being
depreciated (£0.5m), an impairment depreciation charge of
£1.0m due to historic infrastructure assets written down in
Norway following the demounting exercise, and depreciation
of assets acquired with Clear (£0.1m).
3 Amortisation increased to £0.7m from Nil in FY21 as a result
of the acquisition of the Clear customer base. During the year
we undertook a full review of the 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. £1.3m (FY21: £2.0m) 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.
c. £0.5m (FY20: £0.6m) associated with the cost of the
demounting program in Norway.
d. £0.1m (FY20: £nil) associated with the new RCF facility
with Santander.
e. £0.3m (FY20: £nil) development costs for the new
Pathfinder system in Australia.
f. £0.1m setup costs for the New Zealand operations.
5 The interest charge in the year related to the RCF facility with
Santander of £0.1m (FY21: £0.7m).
6 The tax charge of £1.0m (FY20: £0.2m) relates to our Australia
business on taxable profits (£0.3m) and a deferred tax asset
adjustment relating to our Norway business (£0.7m). Prior
year also included a deferred tax credit adjustment in our
Norwegian business of £0.3m.
7 Adjustments
a. Impairment depreciation charge of £1.0m due to historic
infrastructure assets written down in Norway following the
demounting exercise.
b. Amortisation of £0.7m following the acquisition of the
Clear customer base.
c. Deferred tax adjustment of £0.7m relating to our Norway
b. £0.4m (FY21: £0.4m) employee restructuring costs
business.
primarily in the Nordics.
Bigblu Broadband plc / Annual Report and Accounts 2022
15
265204 Bigblu_pp001-pp024.indd 15
265204 Bigblu_pp001-pp024.indd 15
25/04/2023 10:56
25/04/2023 10:56
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW
FINANCIAL REVIEW
(CONTINUED)
Customer Base, Revenue, Adjusted EBITDA in FY22 and the comparative period for Continuing Group is segmented by the following
categories as follows:
Customer Base
Revenue
Adjusted EBITDA
Australia
Norway
Pre-Central
Central Revenue
and Costs1
2022
Number
000’s
51.5
7.9
59.4
-
%
87%
13%
100%
2021
Number
000’s
49.7
9.1
58.8
-
%
84%
16%
100%
Total
59.4
100%
58.8
100%
2022
£m
26.5
4.0
30.5
0.7
31.2
2021
£m
21.8
4.6
26.4
0.7
27.1
%
22%
(13%)
15%
0%
15%
2022
£m
5.0
1.0
6.0
(0.9)
5.1
2021
£m
4.0
1.9
5.9
(1.3)
4.6
1 Central revenue includes recharges for services and central costs include finance, IT, HR and plc costs.
Customer Connections by Technology
2022
Fixed
Wireless/5G
000’s
7.5
5.0
12.5
Satellite
000’s
44.0
2.9
46.9
Total
000’s
51.5
7.9
59.4
%
87%
13%
100%
2021
Fixed
Wireless/5G
000’s
7.3
7.5
14.8
Satellite
000’s
42.4
1.6
44.0
Total
000’s
49.7
9.1
58.8
Australia
Norway
Total
%
25%
(47%)
2%
31%
11%
%
84%
16%
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. There was customer net growth of 1.8k over the course of
the year, including the c2.2k from the Clear acquisition.
b. During the year there were a number of customers
switching contracts (c.9k).
c. The increase in revenue of £4.7m was a result of the
continued growth in customer numbers, the acquisition
of customers from Clear, and an improved ARPU from
£37.83 to £43.65.
2 Norway
a. Net underlying customers growth was 0.6k before
exceptional churn of 1.8k relating to customers associated
with the demounting (0.2k) and the cyber-attack (1.6k).
b. Revenue in the year reduced £0.6m due to the loss of
these customers, although ARPU increased from £35.81
to £39.32 due to price increases in the year.
c. Adjusted EBITDA reduced by £0.9m, to £1.0m during
the year, reflecting the lower revenue and fixed costs
associated with operating leases.
3 PLC
a. Revenue was in line with prior year at £0.7m relating to
d. Importantly, EBITDA improved by 25% following continued
invoiced support services to a third party.
cost efficiencies across the company.
b. With lower costs this resulted in EBITDA losses improving
by 31% at £0.9m.
16
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 16
265204 Bigblu_pp001-pp024.indd 16
25/04/2023 10:56
25/04/2023 10:56
CASHFLOW PERFORMANCE
Adjusted Free Cash Flow in the year, before exceptional and
M&A activities undertaken by the Group, was an inflow of £3.7m
(FY21: inflow £2.1m). This reflects the improved operating cashflow
of £0.6m, lower capital expenditure of £0.8m at £1.4m (FY21:
£2.2m) and lower interest by £0.3m, at £0.1m (FY21: £0.4m), offset
by increased tax charge of £0.1m at £0.6m (FY21: £0.5m).
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
Underlying movement of working capital
Forex and other non-cash items
Adjusted operating cash inflow before interest, tax Capex and exceptional
items
Tax and interest paid
Purchase of Assets
Adjusted free cash inflow before exceptional and M&A items.
Exceptional items relating to refinancing, fundraising, M&A, integration and the
establishment of network partnerships.
Free cash inflow/(outflow) after exceptional items
Investing activities
Movement in cash from Discontinued operations
Movement in working capital from discontinued operations
Financing activities
Decrease in cash balances
Note
1
2
3
4
5
6
7
8
9
10
2022
£000
5,101
777
(113)
5,765
(663)
(1,432)
3,670
(2,707)
963
(1,154)
(120)
-
(695)
(1,006)
2021
£000
4,577
1,742
(1,085)
5,234
(906)
(2,208)
2,120
(3,922)
(1,802)
31,041
(2,209)
(2,339)
(34,796)
(10,105)
1 Underlying movement in working capital was an inflow
of £0.8m (FY21: inflow £1.7m). This reflects the inflow of
receipts from accrued income (£2.8m), lower receipts in
Trade Debtors (£0.2m), the outflow of investment in 5G
stock (£0.4m) and increased Creditors payments (£1.4m).
5 Purchases of assets in FY22 were £1.4m (FY21: £2.2m). These
purchases included the fixed wireless investment in Norway of
£0.7m, installations and IT costs of £0.3m and other £0.4m.
6 Exceptional items relating to M&A, finance raising and
restructuring costs of £2.7m.
2 Forex and non-cash represent an improvement on FY21 of
a lower outflow in the year £0.1m (FY21: outflow £1.1m).
This reflects the currency revaluation of key balance sheet
accounts using the closing rate as at 30 November of a
charge £0.2m (FY21: £0.9m) and non-cash movements
relating in a credit of £0.1m (FY21: Charge £0.2m).
3 This resulted in an adjusted operating cash flow before Interest,
Tax, Capital expenditure and Exceptional items of £5.8m inflow
(FY21: £5.2m inflow), and an adjusted operating cash flow to
EBITDA conversion of 113% (FY21: positive 114%).
4 Tax and interest paid was £0.7m (FY21: £0.9m) on a like-for-like
basis. This covers interest on the RCF facility and leases (£0.1m)
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 £0.4m.
7 In FY22
investing activities
include the acquisition of
customers and assets of Clear Networks (£1.2m). In FY21
sales proceeds from the disposal of subsidiaries were £31.1m
cash (excluding consideration satisfied by equity investments)
less the purchase of intangibles (£0.1m).
8 Relates to costs associated with the discontinued operations
(£2.2m in FY21 retained by the entities disposed of in the year).
9 Represents the movement in the Group’s working capital due
to the deconsolidation of the disposed businesses in FY21.
10 The outflow in the year of £0.7m relates to lease principal
payments. 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 £34.8m.
Bigblu Broadband plc / Annual Report and Accounts 2022
17
265204 Bigblu_pp001-pp024.indd 17
265204 Bigblu_pp001-pp024.indd 17
25/04/2023 10:56
25/04/2023 10:56
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW FINANCIAL REVIEW
(CONTINUED)
NET CASH RECONCILIATION
Opening Net Cash
Loss after tax from Continuing operations
Interest charge
Depreciation
Impairment of Fixed Assets
Amortisation
Tax charge / (credit)
Share Based payments
Exceptional costs
Adjusted EBITDA
Forex movement and other non-cash
Movement in Working Capital
Cash inflow from Continuing operations
Interest paid
Tax paid
Underlying inflow from Continuing operations
Purchase of Assets
Adjusted free cash inflow before exceptional and M&A items
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 of cash from Discontinued operations
Movement in Net Cash
Decrease in Debt
Closing Net Cash
2022
£000
5,201
(2,814)
124
2,076
966
702
1,031
309
2,707
5,101
(118)
782
5,765
(124)
(539)
5,102
(1,432)
3,670
(2,707)
963
(1,154)
-
(695)
(886)
(120)
(1,006)
-
4,195
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
(2,208)
2,120
(3,922)
(1,802)
31,041
(2,339)
(34,796)
(7,896)
(2,209)
(10,105)
7,887
5,201
18
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 18
265204 Bigblu_pp001-pp024.indd 18
25/04/2023 10:56
25/04/2023 10:56
Cash and net debt for the overall Group is summarised as follows:
Opening Net Cash
Decrease in loans: offset in financing activities
Facilities Repaid
Cash outflow from operating activities
Cash generated in investing activities
Cash outflow from financing activities
Movement in Net Cash
Closing Net Cash
Composition of closing net debt
Net cash and cash equivalents
Bank loans
Net Cash
Net Cash
Net cash and cash equivalents
Discontinued operations cash
Adjusted net cash
Adjusted Net Cash (Debt) / Adjusted EBITDA
Adjusted Net Cash (Debt) inc IFRS16 / Adjusted EBITDA
Net cash reduced from £5.2m in 2022 to a net cash position of
£4.2m, a reduction of £1.0m in the year, as detailed in the net
cash reconciliation above. 2021 includes the repayment of the
debt (£8.4m) and the return of Capital (£26.1m)
The table above excludes the lease liabilities of £1.4m (FY21:
£1.4m). Including this amount would give a total adjusted net
cash of £2.8m (FY21: Adjusted net cash £3.8m) and a ratio of
adjusted net cash to adjusted Group EBITDA before IFRS 16 of
0.54x (FY21: Adjusted net cash 0.82x).
2022
£000
5,201
-
(512)
200
(694)
(1,006)
4,195
4,195
-
4,195
4,195
-
4,195
0.82x
0.54x
2021
£000
7,419
7,887
(1,640)
22,591
(31,056)
(2,218)
5,201
5,201
-
5,201
5,201
-
5,201
1.13x
0.82x
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
There was a step change in the balance sheet following the
performance in the year with increased Revenue (£31.2m) and
EBITDA (£5.1m).
Fixed Assets reduced in the year to £2.9m (FY21: £4.1m),
following the purchase of new fixed assets (£1.4m), less
disposals (£0.1m), and adjusted for depreciation provided in the
year (£3.0m) and positive foreign exchange movements £0.2m.
Intangible Assets increased to £7.4m (FY21: £5.6m) due to the IP
addresses and contracts relating to the Clear acquisition £2.3m
plus software development of £0.2m less amortization of £0.7m.
Software development costs of £0.4m were reclassified from
PP&E. Following a review in FY22 there was no requirement for
an impairment of the carrying value of the Company’s goodwill.
265204 Bigblu_pp001-pp024.indd 19
265204 Bigblu_pp001-pp024.indd 19
25/04/2023 10:56
25/04/2023 10:56
Bigblu Broadband plc / Annual Report and Accounts 2022
19
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW FINANCIAL REVIEW
(CONTINUED)
WORKING CAPITAL
DILUTED EPS
Inventory days increased to 24 days (FY21: 13 days) as we
purposefully increased stock holdings in Norway by £0.4m,
to £1.1m (FY21: 0.7m) to support the 5G offering given global
shortages during the financial year.
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 was a loss of 5.0p per share in 2022 from
a profit of 45.6p in 2021.
Trade Debtor days slightly increased to 9 days (FY21: 7 days)
with a £0.2m increase in the closing Trade Debtors year on year.
Trade Creditor days increased to 77 days (FY21: 81 days) due
to agreed revised extended payment terms with suppliers to
support our 5G growth in Norway.
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
Adjusted basic earnings per share
2022
(5.0p)
(5.0p)
4.4p
2021
46.9p
45.6p
4.3p
The Group delivered a basic loss per share of 5.0p (2021: basic
profit per share of 46.9p as a result of the material exceptional
profit) and fully diluted loss per share of 5.0p (2021: fully diluted
profit per share of 45.6p). Adjusted earnings per share was a
profit per share of 4.4p (2021: profit per share of 4.3p).
BASIC EPS
Basic EPS was a loss of 5.0p per share in 2022, down from a
profit of 46.9p in 2021, largely due to the sale of the discontinued
businesses in FY21.
BASIC ADJUSTED EARNINGS PER SHARE
Basic EPS was a profit of 4.4p per share in FY22 from a profit of
4.3p in FY21.
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.
following
Emissions are calculated
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
of Quickline for the period up to the 10 June 2021. 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. Carbon emissions
for non-UK subsidiaries are not reported.
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
20
Bigblu Broadband plc / Annual Report and Accounts 2022
2022
Tonnes
CO2e
-
-
-
-
-
-
-
2021
Tonnes
CO2e
113
3
-
116
3.2
35.6
846
265204 Bigblu_pp001-pp024.indd 20
265204 Bigblu_pp001-pp024.indd 20
25/04/2023 10:56
25/04/2023 10:56
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.
DIVIDEND
The directors do not recommend the payment of a dividend
(2021: £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. The
Group is currently loss-making, mainly as a result of depreciation,
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 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 with an increased RCF
facility of £10m
The Board has conducted stress tests against our business
performance metrics to ensure that we can manage any continuing
risks. 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.
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. Accordingly, we continue to adopt the
going concern basis in preparing these results.
•
Increased CAPEX costs to support growth targets or shipping
delays
On behalf of the Board
The Board also recognises a number of significant mitigating
factors that could protect the future going concern of the
business. These include:
•
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
Frank Waters
Chief Financial Officer
20 March 2023
265204 Bigblu_pp001-pp024.indd 21
265204 Bigblu_pp001-pp024.indd 21
25/04/2023 10:56
25/04/2023 10:56
Bigblu Broadband plc / Annual Report and Accounts 2022
21
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW
Principal Risks and Uncertainties
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 or inorganic customers growth, in Satellite,
Fixed Wireless and 5G 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 24.
Risk
Description
Mitigation
Risk Rating
Medium
9
The Board is in regular dialogue with
network providers to ensure appropriate
capacity and products 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.
The board are in regular dialogue with
network operators to ensure appropriate
product availability in the territories we
operate in.
Medium
9
Medium
12
Low
3
Service level agreements exist with satellite
operators whose satellites are used with
mission critical businesses. Despite this the
Cyber-attack impacted on our Norwegian
customers this year. Newer satellites in
2023 with steerable beams and a wider list
of satellite providers should reduce the risk.
inherently risky.
Roll up strategies are
This risk is mitigated as far as possible by
working closely with existing management
teams, 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
enhance our operating system capabilities
to reduce on going risk.
Dependence on
satellite owners
and satellite
infrastructure
for capacity and
key contract
terms
Dependence on
5G providers for
capacity and
key contract
terms
Dependence
on satellite
infrastructure
Acquisitions
The Group is dependent on its ability to purchase
broadband capacity from satellite owners in Australasia
and the Nordics. The terms upon which 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 are typically non-exclusive, are terminable
immediately or within a short timeframe of giving notice, do
not contain restrictive covenants which would prevent the
satellite owners from directly competing with the Group
and do not contain express provisions obliging them to
continue providing services to the Group, its governments
partners and consequently its revenues, its operational
results and its prospects.
The Group has, and is, extending its product offering to
include 5G, via partnerships with network operators.
The Group’s current contractual agreements are
typically non-exclusive and in the event of termination
or cancellation could have an adverse consequence on
performance and future prospects.
In the event of the failure of a satellite as was the case
in the Cyber-attack, the Group may not be able to
supply broadband access to parts of its customer base,
which would have an adverse impact on the Group’s
relationship with its customers and its revenues, its
operational results, and its prospects.
The Group believes there is an opportunity to continue
acquisition of customers by way of accretive bolt-ons in
existing markets.
The Group intends to conduct 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 in
terms of performance or liabilities identified subsequent.
During the 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
material adverse effect on the Group’s business, financial
condition, or results of operations.
22
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 22
265204 Bigblu_pp001-pp024.indd 22
25/04/2023 10:56
25/04/2023 10:56
Risk
Description
Mitigation
Competition
from existing/
emerging
alternative
technologies
Government
policy and
increased
investment in
fibre roll-out
System reliance
Dependence on
key executives
There may be competition from existing and emerging
alternative technologies, such as Starlink, fibre to the
premises, improved versions of the wide area radio
network or mesh radio technologies. In the event that
such technologies become widely available, the Group’s
subscriber base, revenues, results from operations and
prospects may be adversely affected.
Given the 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.
The Group believes 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.
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
relationships and results.
The Board recognises this risk and seeks
to mitigate it by regular dialogue in the
marketplace with other solution providers
to ensure the Group’s offering is adjusted
accordingly to meet the market demands
and changing landscape
Risk Rating
Medium
9
Government announcements
in Australia
indicate support will continue to be provided
for satellite and wireless providers. We
remain confident this will continue within the
jurisdictions in which we operate, with a fibre
offering now available to our customer base.
Medium
6
Continued and sustained development and
testing of the existing systems is undertaken
regularly. Enhancements are
rolled out
during the course of the year to reduce risks.
Medium
8
Medium
9
The Board will continue to ensure that
the management team are appropriately
incentivised and that there is scope to
appropriately incentivise new key personnel
where required. The Group operates various
share option schemes and management
incentive plans which enable employees to
benefit from continued growth and delivering
shareholder returns. It also ensures that the
management team, staff and shareholders
objectives are aligned.
Fraud, including
cyber attacks
As a provider of broadband solutions, the Group is a
potential target and products may have vulnerabilities that
may be targeted by attacks specifically designed to disrupt
the Group’s business and harm its reputation.
The Group have technical staff including
outside specialist contractors who focus on
investigation and mitigation of risks related
to fraud and cyber-attacks.
Medium
8
Ineffective
Control
environment
Force majeure
If an actual or perceived breach of security occurs in the
Group’s internal systems, it could adversely affect the
markets 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.
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.
The Group’s operations now or in the future may be
adversely affected by risks outside its control, including
space debris damaging or destroying satellites, labour
unrest, civil disorder, war, subversive activities or
sabotage, fires, floods, explosions or other catastrophes,
epidemics, or quarantine restrictions.
Biannual review undertaken of key risk areas
by consultants as appropriate
Medium
6
This continues to be monitored by the Board
with our professional advisors, satellite and
wireless operators and insurance specialists.
Medium
6
Bigblu Broadband plc / Annual Report and Accounts 2022
23
265204 Bigblu_pp001-pp024.indd 23
265204 Bigblu_pp001-pp024.indd 23
25/04/2023 10:56
25/04/2023 10:56
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW PRINCIPAL RISKS AND UNCERTAINTIES
(CONTINUED)
Risk
Description
Mitigation
Foreign
Exchange Rate
Volatility
The geographic spread of the Group means that financial
results are affected by movements in foreign exchange
rates, with only 2% of the Group’s revenue currently being
generated in Sterling. The risk presented by currency
fluctuations may affect business forecasting and create
volatility in the results and cash holdings.
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.
Risk Rating
Medium
6
This continues to be monitored by the Board
with our professional advisors.
Medium
9
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 policy. The market perception of telecoms
and 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.
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
20 March 2023 and was signed on its behalf by:
Andrew Walwyn
Chief Executive Officer
20 March 2023
Severity
5
Catastrophic
4
Critical
3
Moderate
2
Marginal
1
Negligible
5
Frequent
4
Probable
25
High
20
High
20
High
15
10
5
Serious
Serious
Medium
16
12
8
4
Serious
Serious
Medium
Medium
y
t
i
l
i
b
a
b
o
r
P
3
Occasional
2
Remote
15
12
9
6
Serious
Serious
Medium
Medium
10
8
6
4
Serious
Medium
Medium
Medium
1
Improbable
5
4
Medium
Medium
3
Low
2
Low
3
Low
2
Low
1
Low
Probability
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)
24
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp001-pp024.indd 24
265204 Bigblu_pp001-pp024.indd 24
25/04/2023 10:56
25/04/2023 10:56
Section 172 (1) Statement
FOR THE YEAR ENDED 30 NOVEMBER 2022
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 35 to 42.
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.
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.
No changes were made during the period.
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 and on pages 36
and 42. During the year the Board and its committee’s 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?
fundraising
The Board will sometimes engage directly with stakeholders on
certain issues such as remuneration schemes, strategic direction,
investment and
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
265204 Bigblu_pp025_pp053.indd 25
265204 Bigblu_pp025_pp053.indd 25
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
25
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Directors’ Report
FOR THE YEAR ENDED 30 NOVEMBER 2022
The Directors present their report together with the audited financial statements for the year ended 30 November 2022.
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 54 to 95.
The Directors do not recommend the payment of a final dividend for the financial year ended 30 November 2022.
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 31 to 33.
Michael Tobin
Andrew Walwyn1
Frank Waters
Paul Howard2
Christopher Mills4
Philip Moses3
Total
Appointed
29 Sept 2015
2022
Ordinary
shares of
15p each
489,823
12 May 2015
3,294,004
12 May 2015
29 Sept 2015
23 May 2018
21 May 2020
325,090
149,577
258,334
-
2022
Share
options
-
215,815
218,324
133,333
-
-
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
-
-
4,516,828
567,472
4,516,828
810,889
1
2
3
4
In December 2022 Andrew Walwyn purchased 26,549. Following the purchase, he has a beneficial interest in 3,320,553 Ordinary Shares, representing 5.68% of the
Company’s issued share capital.
In December 2022 Paul Howard purchased 66,666 shares. Following the purchase, he has a beneficial interest in 216,243 Ordinary Shares, representing 0.37% of the
Company’s issued share capital.
In December 2022 Philip Moses purchased 10,000 Ordinary Shares. Following the purchase Philip Moses has a beneficial interest representing 0.02% of the Company’s
issued share capital.
In February 2023 Christopher Mills purchased a total of 200,000 shares, increasing his indirect interest to 14,700,000 shares in the Company (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
14,958,334 shares representing 25.3% of the issued share capital.
As at the 30 November included in the above were 451,125 Share options vested but remaining unexercised.
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 2022 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).
26
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 26
265204 Bigblu_pp025_pp053.indd 26
25/04/2023 10:54
25/04/2023 10:54
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 2022, are as follows:
Scheme
Date of
grant
EMI
EMI
21/12/16
21/12/16
Unapproved
21/12/16
Unapproved
30/03/16
Unapproved
21/12/16
No. of
shares under
option at
30 November
2021
Exercised
during the
year
No. of shares
under option at
30 November
2022
51,942
217
86,450
66,667
66,666
271,942
-
-
-
-
-
-
51,942
217
86,450
66,667
66,666
271,942
Exercise
price (pence)
per share at
30 November
2022 (or date
of exercise if
earlier)2
69.45
69.45
69.45
33.75
69.45
Normal
expiry date
21/12/26
21/12/26
21/12/26
30/03/26
21/12/26
Director
Andrew Walwyn
Frank Waters
Frank Waters
Paul Howard1
Paul Howard
Total
1
In December 2022 Paul Howard exercised 66,666 shares. Following the exercise, he has a beneficial interest in 216,243 Ordinary Shares, representing 0.37% of the
Company’s issued share capital.
Notes:
(1)
(2)
All options included in the above table were capable of being exercised in full throughout the year to 30 November 2022 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.
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 FY22. 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.
265204 Bigblu_pp025_pp053.indd 27
265204 Bigblu_pp025_pp053.indd 27
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
27
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW DIRECTORS’ REPORT
(CONTINUED)
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 2022, are as follows:
Director
Andrew Walwyn
Andrew Walwyn
Frank Waters
Frank Waters
Scheme
LTIP
LTIP
LTIP
LTIP
Date of
grant
30/05/18
28/10/19
30/05/18
28/10/19
Other staff members
Other staff members
LTIP
LTIP
30/05/18
28/10/19
Total
Notes:
No. of
shares under
option at
30 November
2021
99,359
199,489
79,826
160,273
538,947
Exercise
price (pence)
per share at
30 November
2022 (or date
of exercise if
earlier)
No. of
shares under
option at
30 November
2022
Normal
expiry
date
Exercised
during the
year
Lapsed
during the
year1
-
-
-
-
-
-
134,975
-
108,441
243,416
99,359
64,514
79,826
51,832
295,531
15.00
30/05/28
15.00
28/10/29
15.00
30/05/28
15.00
28/10/29
95,952
95,9522
-
-
15.00
N/A
629,155
-
543,271
725,107
95,952
543,271
85,884
85,884
1,264,054
95,952
786,687
381,415
15.00
28/10/23
(1)
(2)
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 2022
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.
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.
There are a number of performance conditions as well as time restrictions relating to the financial year ended 30 November 2022
attached to these share schemes and are reviewed by the Remuneration Committee.
28
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 28
265204 Bigblu_pp025_pp053.indd 28
25/04/2023 10:54
25/04/2023 10:54
DIRECTORS’ REMUNERATION
The following table shows emoluments paid and accrued to Directors during the financial year:
Year ended 30 November 2022
Salary/fees
£000
Bonus
£000
BIK
£000
Pension
£000
58
-
235
215
39
35
39
163
191
-
-
-
-
5
6
-
-
-
-
11
9
-
-
-
Year ended
30 November
2021
Total
emoluments
£000
Total
emoluments
£000
58
86
414
421
39
35
39
853
845
124
45
48
Current Directors:
Michael Tobin
(Non-Executive Director
and Chairman)
Andrew Walwyn
(Chief Executive Officer)
Frank Waters
(Chief Financial Officer)1
Paul Howard
(Non-Executive Director)
Christopher Mills
(Non-Executive Director)
Philip Moses
(Non-Executive Director)
621
354
11
20
1,006
2,001
1
Frank Waters received an additional bonus relating to the final settlement from Eutelsat of £50k during the year (£175k in FY21), which was charged to the discontinued
business.
Prior year and 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 (FY21: £252k) and Frank Waters (FY21: £212k) which were treated as continuing business costs but analysed
on a non-GAAP basis as exceptional, as attached to the Disposal.
SERVICE CONTRACTS
The Chief Executive Officer, and Chief Financial Officer have service contracts with the Company that are terminable by either party
on not less than 12 months prior notice. The non-executive Directors have service contracts with the Company 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.
265204 Bigblu_pp025_pp053.indd 29
265204 Bigblu_pp025_pp053.indd 29
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
29
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW DIRECTORS’ REPORT
(CONTINUED)
SUBSTANTIAL SHAREHOLDINGS
As at 30 November 2022 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
Liontrust Asset Management
BGF Investment Management Limited
Mr Andrew Walwyn
Hargreaves Lansdown Nominees Limited
Interactive Investor Services Nominees Limited
EMPLOYEE INVOLVEMENT
% Holding
No. of shares
24.8
11.1
8.9
8.8
7.8
5.6
5.6
5.1
14,500,000
6,458,278
5,203,644
5,112,604
4,544,444
3,294,004
3,242,665
3,003,663
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.
30
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 30
265204 Bigblu_pp025_pp053.indd 30
25/04/2023 10:54
25/04/2023 10:54
Board of Directors
FOR THE YEAR ENDED 30 NOVEMBER 2022
MICHAEL
TOBIN OBE
Non-Exec Chairman
Appointment
Michael
joined
September 2015
the Board and became Chairman
in
Committee Membership
Michael chairs the Board’s Remuneration and Nomination
Committees and is a member of the Audit and Risk
Committee.
Independence
The Board consider Michael to be an independent Director.
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 Telecity Group
plc, a leading FTSE250 Technology company from 2002 to
2015.
Michael joined Redbus in 2002 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 Telecity Group in October 2007 winning
the accolade of UK Innovation Awards IPO of the year 2008
and the techMARK Achievement of the year in the same year.
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.
Prior to joining Telecity Group, Michael headed-up Fujitsu’s
e-Commerce operations in Frankfurt, Germany. Before that,
he ran ICL’s Danish outsourcing subsidiary out of 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 Data centre operator
culminating in its sale in 2016 to Telstra for $800m.
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 Chamber of Commerce ‘Business
Person of the Year’ for 2009 & 2010; In 2009 was named
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 to 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.
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.
External appointments
Michael holds a number of non-executive and Chairmanship
roles including EdgeConneX, Audioboom, Ultraleap, Pulsant,
NorthC Datacenters, Everarc PLC, Sungard Availability Services,
DC Byte, Instrumental, ScaleUp Group UK. LeaseWeb, The
Lewis Moody Foundation where he is Ambassador
265204 Bigblu_pp025_pp053.indd 31
265204 Bigblu_pp025_pp053.indd 31
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
31
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW BOARD OF DIRECTORS
(CONTINUED)
PAUL
HOWARD
Non-Executive
Director
CHRISTOPHER
MILLS
Non-Executive
Director
PHILIP
MOSES
Non-Executive
Director
Appointment
Appointment
Appointment
Paul joined the Board in September
2015.
Christopher joined the Board in May
2018.
Phil joined the Board in May 2020
Committee Membership
Committee Membership
None
Committee Membership
Phil chairs the Board’s Audit and Risk
Committee.
serves
Paul
the Board’s
on
remuneration and Audit and Risk
Committees.
Independence
The Board consider Paul to be an
independent Director.
Background and Experience
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 ranked 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 Morgan Stanley
in 2015 helping their Select Risk equity
trading business. Paul has a BSc from
Durham University in Maths and is a
qualified accountant.
External appointments
Paul holds a number of executives
roles, including Chairman of Quickline
Communications Ltd
Independence
Independence
The Board consider Christopher to be
a non-independent Director.
The Board consider Phil to be an
independent Director.
Background and Experience
Background and Experience
Christopher founded Harwood Capital
Management in 2011, a successor
of the former parent company of
Harwood, J O Hambro Capital
Management which he co-founded
in 1993. He is Chief Executive and
Investment Manager of North Atlantic
Smaller Companies Investment Trust
plc and Chief
Investment Officer
of Harwood Capital LLP. He is a
Non-Executive Director of several
companies. Christopher was
a
Director of Invesco MIM, where he was
head of North American Investments
and Venture Capital, and of Samuel
Montagu International.
External appointments
Christopher holds a number of non-
executive roles.
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.
External appointments
Phil was appointed CFO of Osborne
Infrastructure Ltd in January 2022,
which was rebranded as Octavius
Infrastructure Ltd in 2022.
32
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 32
265204 Bigblu_pp025_pp053.indd 32
25/04/2023 10:55
25/04/2023 10:55
ANDREW
WALWYN
Chief Executive
Officer
FRANK
WATERS
Chief Financial
Officer
Appointment
Appointment
Andrew joined the Board as CEO
on the completion of the reverse
acquisition in May 2015.
Frank joined the Board as CFO on the
completion of the reverse acquisition
in May 2015.
Committee Membership
Committee Membership
Andrew serves on
nomination committee.
the Board’s
None
Independence
Executive – non-independent
Background and Experience
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.
External appointments
None
Independence
Executive – non-independent
Background and Experience
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
the
mobile, consumer electronics and
technology sectors.
in
Frank was instrumental in the sale
of DX Communications alongside
Andrew Walwyn to what
is now
Telefonica.
Frank joined Bigblu Broadband in
the summer of 2013 and, as Chief
Financial Officer, is responsible for
all Group finance, commercial, legal,
regulatory, HR, IT and M&A matters.
External appointments
Frank holds a number of non-executive
directorships
in sports clubs and
businesses. In addition, Frank is a NED
for Quickline Communications Ltd
265204 Bigblu_pp025_pp053.indd 33
265204 Bigblu_pp025_pp053.indd 33
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
33
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Statement of Directors’ Responsibilities
FOR THE YEAR ENDED 30 NOVEMBER 2022
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
20 March 2023
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.
34
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 34
265204 Bigblu_pp025_pp053.indd 34
25/04/2023 10:55
25/04/2023 10:55
Corporate Governance Statement
FOR THE YEAR ENDED 30 NOVEMBER 2022
important
DEAR SHAREHOLDER,
At Bigblu Broadband plc all our
stakeholders are
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
20 March 2023
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.
The Group has customers in Australia and the Nordics with 59.4k
customers as at 30 November 2022. The Group is extremely
focussed on growing the Continuing Group and 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.
Bigblu Broadband plc / Annual Report and Accounts 2022
35
265204 Bigblu_pp025_pp053.indd 35
265204 Bigblu_pp025_pp053.indd 35
25/04/2023 10:55
25/04/2023 10:55
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
Our Australian business SkyMesh, went from strength to strength
with year-on-year overall customer growth of c.4% and of equal
importance, strong customer engagement with c40% of new
customers coming from word of mouth. During the year SkyMesh
was also awarded the Whistleout 2022 Best Satellite NBN Co
provider for the third year running. We further reinforced our close
working relationship with NBN Co as it pro-actively extended the
use of satellite in regional and remote Australia.
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.
Details of specific contacts at finnCap are published on all the
Group’s RNS releases and on the Group’s investor website.
After a period of satellite investment and focus, the Board continue
to evaluate the opportunity to refine and enhance 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 and started February 2023,
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 –continues to invest 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).
36
Bigblu Broadband plc / Annual Report and Accounts 2022
TAKING INTO ACCOUNT
3
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. 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:
•
•
Customers – Grow profitable elements of the business whilst
putting the customer first
Innovation –
exceeding customers’ expectations
Industry
leading product design always
265204 Bigblu_pp025_pp053.indd 36
265204 Bigblu_pp025_pp053.indd 36
25/04/2023 10:55
25/04/2023 10:55
•
Quality – Excellence in operations, processes and systems
•
Environment – Engaging with and supporting the communities
in which we work
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.
•
Teamwork – Support and engage with our people
Board processes
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 22 to 24 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.
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
The full Group Board met ten times in the financial year under
report and is scheduled to meet ten 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.
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. The Board have in place a Delegation of Board
authority which establishes those matters which it is considered
Bigblu Broadband plc / Annual Report and Accounts 2022
37
265204 Bigblu_pp025_pp053.indd 37
265204 Bigblu_pp025_pp053.indd 37
25/04/2023 10:55
25/04/2023 10:55
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
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
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.
•
Financials:
During FY22, 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.
•
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.
•
Approval of significant
expenditure
investments, M&A and capital
•
Business performance:
•
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)
In FY22, 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.
Ensuring adequate succession planning for the Board
and Executive management (taking into consideration the
recommendations of the Nomination Committee)
Board committees
The Board has established committees as follows:
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 FY22, 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.
•
•
•
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 43 to 53 and each
committee’s full terms of reference are available on our website.
•
•
•
38
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 38
265204 Bigblu_pp025_pp053.indd 38
25/04/2023 10:55
25/04/2023 10:55
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
Attended
Held
Attended
Held
Attended
Held
Attended
10
10
10
10
10
10
10
10
10
10
6
9
3
-
-
3
-
3
3
-
-
3
-
3
3
-
-
3
-
-
3
-
-
3
-
-
1
1
-
1
-
-
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.
6
HAVING APPROPRIATE EXPERIENCE, SKILLS AND CAPABILITIES ON THE BOARD
BOARD COMPOSITION, QUALIFICATION AND EXPERIENCE
The Board currently comprises six (2022: six) 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 and remains independent), 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.
265204 Bigblu_pp025_pp053.indd 39
265204 Bigblu_pp025_pp053.indd 39
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
39
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
KEY BOARD ROLES
Chairman
Leads the Board
Promotes highest standard of corporate
governance
Challenges strategic matters
Chief Executive Officer
Non-Executive Directors
Leads the management team
Supports
to ensure
the Chairman
appropriate governance standards spread
through the Group
initiatives aimed at
Raises strategic
improving shareholder returns in line with
the strategic direction of the Group
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
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
fellow
Executive Directors
in conjunction with
NON-EXECUTIVE DIRECTOR INDEPENDENCE
The Board considers and reviews the independence of Non-
Executive Directors regularly 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 48,
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.
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 48.
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
40
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 40
265204 Bigblu_pp025_pp053.indd 40
25/04/2023 10:55
25/04/2023 10:55
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 2023 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.
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
The Board and its committees were formed upon listing in May
2015 and are reviewed from time to time. A Board Effectiveness
Review was last carried out during 2021 with the results being
analysed by the Nomination Committee and presented to the
Board. A small number of proposed recommendations were
made and implemented by the Board. Given the composition
of the Board and the strategy to exit the remaining businesses it
was decided that a Board Effectiveness Review was not required
during 2022 and that Board Effectiveness Review be scheduled
for early 2023.
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.
265204 Bigblu_pp025_pp053.indd 41
265204 Bigblu_pp025_pp053.indd 41
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
41
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
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 39.
COMMUNICATING WITH
10
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
23 May 2023, 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 46.
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 47, 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
20 March 2023
42
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 42
265204 Bigblu_pp025_pp053.indd 42
25/04/2023 10:55
25/04/2023 10:55
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 members are Andrew Walwyn
and Paul Howard.
ROLE AND RESPONSIBILITIES
the Board
in discharging
its
The Committee assists
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.
•
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.
MEETINGS DURING THE YEAR
A meeting of
27th September 2022.
the Nomination Committee was held on
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.
Michael Tobin OBE
Nomination Committee Chairman
20 March 2023
265204 Bigblu_pp025_pp053.indd 43
265204 Bigblu_pp025_pp053.indd 43
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
43
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
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 2022, the Committee formally met three times.
The table on page 39 summarises the attendance of members
at formal committee meetings. In addition, the Audit Committee
Chair had a number of informal meetings both with the external
Auditors and with the Chief Financial Officer throughout the year
to monitor progress and discuss any matters of note.
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.
44
Bigblu Broadband plc / Annual Report and Accounts 2022
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
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.
265204 Bigblu_pp025_pp053.indd 44
265204 Bigblu_pp025_pp053.indd 44
25/04/2023 10:55
25/04/2023 10:55
SIGNIFICANT ISSUES
The issues considered by the Committee that are deemed to be significant to the Group are set out below.
Revenue recognition
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.
Goodwill and
intangibles carrying
value
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 2022, the Group had on its balance sheet goodwill of £5.6m (2021: £5.5m) and other
intangibles of £1.8m (2021: £0.1m) that has primarily arisen as a consequence of past acquisitions. This
increased during the year by £1.7m following the acquisition of customers and assets of Clear Networks (Pty)
in Australia. Management performs impairment reviews annually, or more frequently if there is an indication of
impairment, based on the Group’s operations. The cash flow forecasts used for each business unit 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 long-term 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 2022 is appropriate, therefore no impairment required.
Valuation of carrying
value of interest in
UK Fixed Wireless
Operations
The accounting and disclosure for the transaction and the ongoing continuing businesses were reviewed and
agreed with the Auditors previously including splitting disclosure for Continuing and Discontinued Operations.
The transaction having occurred more than 12 months ago resulted in a review of the carrying value of the
shares and loan notes received as consideration to ensure not materially misstated in the Group and single
entity accounts.
265204 Bigblu_pp025_pp053.indd 45
265204 Bigblu_pp025_pp053.indd 45
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
45
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
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.
timely reconciliations are performed for all significant balance
sheet accounts.
clearly defined organisational structure and authorisation
lines including Cash Control
46
Bigblu Broadband plc / Annual Report and Accounts 2022
an operations team reviews key business processes, controls
and their effectiveness, as well as identifying, 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 and has formal weekly one to
one meetings and informal as required. This is especially important
following any new acquisitions. 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 as well as ensuring compliance with local
regulations and tax compliance 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 Company or
relevant statutory entity office as well as in the cloud within our
accounting systems.
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
business units 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.
265204 Bigblu_pp025_pp053.indd 46
265204 Bigblu_pp025_pp053.indd 46
25/04/2023 10:55
25/04/2023 10:55
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.
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 auditor’s
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.
WHISTLE-BLOWING AND ANTI-BRIBERY
•
considered their length of tenure.
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.
•
•
reviewed the nature and magnitude of non-audit services
provided; and
reviewed
confirmation presented to the Committee.
the external Auditors own
independence
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
20 March 2023
EXTERNAL AUDITOR
regard
The Audit and Risk Committee
reviews and makes
the appointment and
to
recommendations with
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.
265204 Bigblu_pp025_pp053.indd 47
265204 Bigblu_pp025_pp053.indd 47
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
47
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW 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 2022, 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 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 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 FY23 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 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 FY22 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
is carried forward as appropriate into the new financial year
commencing 1 December 2022, is set out in the Remuneration
Policy below. Following the disposals during the last two years
the Committee undertook 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. No changes were proposed.
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.
48
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 48
265204 Bigblu_pp025_pp053.indd 48
25/04/2023 10:55
25/04/2023 10:55
REMUNERATION DECISIONS IN FY22
The activities of the Committee and key decisions in FY22 are
set out below:
•
•
•
•
Executive salaries were reviewed. Salaries were 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.
No changes to the existing Management Incentive Plan
which 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 £31.2m (FY21: £27.1m) and adjusted EBITDA at
£5.1m (FY21: £4.6m). Additional uplift bonuses can be earned
when performance materially exceeds targets, however none
were awarded during the period.
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
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 (FY21: 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
telecommunications
remuneration arrangements at UK
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
265204 Bigblu_pp025_pp053.indd 49
265204 Bigblu_pp025_pp053.indd 49
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
49
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW 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
Operation
Maximum opportunity
Performance metrics
retain
To attract and
talent of the right calibre
and with the ability to
contribute to strategy, by
ensuring base salaries
are competitive in the
relevant talent market.
reviewed
Base salaries are usually
annually, with reference to individual
performance,
performance, Group
market
salary
competitiveness,
decreases / increases across the Group
and the position holder’s experience,
competence and criticality
the
business.
to
Director
/
salary
Executive
decreases
increases will
normally be in line with those for
the wider executive employee
population. However, higher
salary decreases / increases
may be made where there is a
change in role or responsibilities.
performance
Group
market
against
is
expectations
considered
when
determining appropriate
salary levels.
Pension
Provide post-retirement
benefits for participants
in a cost-efficient and
equitable manner.
Benefits
To provide competitive
benefits for each role.
Any decreases / increases are generally
effective from 1 December.
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 of the scheme. This overall
percentage contribution will be made
up from a combination of contributions
the Executive Directors and
from
the Group, with a choice of funding
vehicles through either the Group Plan
or by contributions being made to a
personal SIPP chosen and set up by the
Executive Director.
Benefits currently include the provision
insurance,
life
of private medical,
disability
and
permanent
insurance and car allowance.
health
relocation
package
Reasonable
including
visitation
allowance, legal fees allowance and
health insurance.
annual
family
Travel and subsistence allowances in
line with the Group Expenses Policy and
other benefits may be provided based
on individual circumstances.
None
None
The CEO and CFO receive
a matching contribution of
4.5 percent of salary under the
opt-in to the Group Workplace
Pension Scheme. Subject
to the applicable 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, notwithstanding
to pension
future changes
legislation.
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
and Group circumstances.
retains
The Committee
the
discretion to amend benefits in
exceptional circumstances or
in circumstances where factors
outside of the Group’s control
changed
have materially
(e.g.
insurance
premiums).
increases
in
50
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 50
265204 Bigblu_pp025_pp053.indd 50
25/04/2023 10:55
25/04/2023 10:55
Variable Pay
Type
Bonus
arrangements
Purpose and
link to strategy
Aims
focus
to
executives on achieving
financial targets relevant
to the business priorities
for the financial period
and where appropriate
to outperform
Non-Executive Directors Fees
Operation
Maximum opportunity
Performance metrics
base
The
bonus
opportunity for Executive
Directors will be up to 75
percent of base salary.
to 75 percent of
Up
maximum will vest for
target
performance.
Performance above base
performance can result in
additional bonuses being
paid linked to improved
performance - i.e. paying
for themselves.
The annual bonus will be
based on achievement of
financial targets (e.g., revenue
growth, EBITDA improvements
and cash metrics.
The Committee has discretion
to adjust the formulaic bonus
outcome downwards within
the limits of the plan, to ensure
alignment of pay with
the
underlying performance of the
business.
Typically, performance measures and
targets are set prior to or shortly after
the start of the 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 payments previously made.
Additional bonuses can be earned at
the sole discretion of the Remuneration
Committee if exceptional circumstances
arise.
Type
Non-
Executive
Directors’
Fees
Purpose and link to
strategy
Operation
Maximum opportunity
Performance metrics
for
the
reflect
time
To
in
commitment
preparing
and
attending meetings,
and
duties
the
of
responsibilities
the
the
role and
contribution expected
from
Non-
the
Executive Directors.
fees
for Non-Executive
Monthly
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 increase in time
commitment required.
Non-Executive Directors do not
in any annual bonus
participate
incentive schemes, nor do
they
receive any pension or benefits (other
than nominal travel expenses). Non-
Executive Directors will participate in
the Company’s share option schemes.
None
Any decreases / increases
to Non-Executive Director
fees will be considered as
a result of the outcome of a
review process and taking
into account wider market
factors,
inflation.
e.g.
There is no prescribed
individual maximum fee.
Further details are set out
below.
265204 Bigblu_pp025_pp053.indd 51
265204 Bigblu_pp025_pp053.indd 51
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
51
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW 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
Paul Howard
Chairman
September 2015
Non-Executive Director
September 2015
Christopher Mills
Non-Executive Director May 2019
Philip Moses
Non-Executive Director May 2020
May 2019
May 2019
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 date
Notice period
Andrew Walwyn
Chief Executive Officer
May 2015
Frank Waters
Chief Financial Officer
May 2015
May 2018
May 2021
12 months
12 months
52
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp025_pp053.indd 52
265204 Bigblu_pp025_pp053.indd 52
25/04/2023 10:55
25/04/2023 10:55
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
20 March 2023
265204 Bigblu_pp025_pp053.indd 53
265204 Bigblu_pp025_pp053.indd 53
25/04/2023 10:55
25/04/2023 10:55
Bigblu Broadband plc / Annual Report and Accounts 2022
53
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Independent Auditor’s Report
TO THE MEMBERS OF BIGBLU BROADBAND PLC FOR THE YEAR ENDED 30 NOVEMBER 2022
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 2022 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 2022 and of the
group’s loss 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 significant components which were
performed to component materiality. 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.
The audits of Brdy 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.
54
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 54
265204 Bigblu_pp054_pp072.indd 54
25/04/2023 10:54
25/04/2023 10:54
Audit risk
Impairment of goodwill
How we responded to the risk
The group recognised goodwill of £5,661,000 as at 30 November
2022 (2021: £5,523,000).
There is a risk that goodwill is impaired and therefore materially
overstated.
For the year ended 30 November 2022, management performed an
impairment review for each of the cash-generating units (CGUs) to
which goodwill relates.
The assessment was based on the expected future cash flows of
each CGU using either a discounted cash flow model or fair value
assessment.
•
•
•
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 variables with the cash
flow model; and
Selecting appropriate valuation methodologies and relevant
market based valuation multiples.
Impairment of parent company investment valuation
The parent company holds material investments in two wholly owned
trading subsidiaries, Skymesh Pty Ltd (“Skymesh”) and Brdy AS
(“Brdy”).
There is a risk that these investments are impaired and therefore
materially overstated.
For the year ended 30 November 2022, management considered
whether indicators of impairment existed for each cash-generating
unit (CGU).
relevant, valuation assessments were performed by
Where
management to determine the recoverable value of these entities.
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
•
•
Selection of appropriate valuation methodologies.
Our audit work included, but was not restricted to, the following:
We assessed management’s impairment review process and
performed analysis which formed the basis of our challenge of
management’s assumptions.
We verified the arithmetical accuracy and integrity 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 value calculations were
derived and considered whether they were reasonable.
Our audit work included, but was not restricted to, the following:
•
•
•
•
•
We assessed management’s impairment review process and
reviewed their analysis and performed our own analysis to
challenge management’s assumptions.
We verified the arithmetical accuracy and integrity of the impairment
models.
We reviewed management’s discounted cash flow valuation
model 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 reviewed management’s fair value assessment methodologies
and assessed and challenged the appropriateness of the
assumptions used within them.
We challenged management’s assumptions by making reference
to contradictory evidence obtained, including alternative valuation
techniques and metrics.
265204 Bigblu_pp054_pp072.indd 55
265204 Bigblu_pp054_pp072.indd 55
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
55
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW INDEPENDENT AUDITOR’S REPORT
(CONTINUED)
OUR APPLICATION OF MATERIALITY
CONCLUSIONS RELATING TO GOING CONCERN
We apply the concept of materiality both in planning and
performing our audit, in evaluating the effect of misstatements
and in forming an option. 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 £415,000 (30 November 2021: £300,000). This was
determined with reference to 1.3% of continuing group revenue
(2021: 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 £311,250 (30 November 2021 – 75% of
materiality being £225,000).
The reporting threshold to the Audit and Risk Committee was
set as 5% of materiality, being £20,750 (30 November 2021 –
£15,000). If, in our opinion, differences below this level warranted
reporting on qualitative grounds, these were also reported.
The materiality for the Parent Company financial statements was
set at £400,000 (30 November 2021: £300,000). Our materiality
was set at £400,000 so as to ensure component materiality did
not exceed group materiality.
On the basis of our risk assessment, review of the Parent
Company’s control environment, and consideration of other
relevant factors, its performance materiality was set at 75%
of materiality, being £300,000 (30 November 2021 – 75% of
materiality being £225,000).
The reporting threshold to the Audit and Risk Committee in
respect of the Parent Company was set as 5% of materiality,
being £20,000 (30 November 2021 – £15,000). If, in our opinion,
differences below this level warranted reporting on qualitative
grounds, these were also reported.
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the director’s assessment of the entity’s ability to
continue to adopt the going concern basis of accounting included
•
•
•
Discussing management’s assessment of the group’s ability
to remain as a going concern
Reviewing and understanding the cash flow forecasts for
the period to March 2024 which are the central element of
management’s going concern assessment;
Assessing and challenging the inputs in and judgements
made in the preparation of the cash flow forecasts for the
period to March 2024
•
Verifying the terms, period covered and headroom provided
by the Group’s debt facilities.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
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.
56
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 56
265204 Bigblu_pp054_pp072.indd 56
25/04/2023 10:54
25/04/2023 10:54
OPINIONS ON OTHER MATTERS PRESCRIBED BY
THE COMPANIES ACT 2006
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
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.
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:
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. 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;
265204 Bigblu_pp054_pp072.indd 57
265204 Bigblu_pp054_pp072.indd 57
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
57
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW INDEPENDENT AUDITOR’S REPORT
(CONTINUED)
•
•
•
Evaluating management’s controls designed to prevent and
detect irregularities;
Identifying and testing journals, in particular journal entries
which shared key risk characteristics; and
Challenging assumptions and
judgements made by
management in their critical accounting estimates, particularly
relating to impairment of intangible assets and investment
valuation.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-
compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events
and transactions reflected in the financial statements, as we will
be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
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
20 March 2023
10 Queen Street Place
London
EC4R 1AG
58
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 58
265204 Bigblu_pp054_pp072.indd 58
25/04/2023 10:54
25/04/2023 10:54
Consolidated Statement of
Comprehensive Income
FOR THE YEAR ENDED 30 NOVEMBER 2022
Registered Number 09223439
Continuing Operations
Revenue from contracts with customers
Cost of sales
Gross profit
Distribution expenses
Administrative expenses
Operating loss
Finance costs
Loss before tax
Taxation (charge) / credit on operations
Loss from continuing operations
(Loss) / Profit from discontinued operations
(Loss) / Profit for the year
Other comprehensive expense
Foreign currency translation difference
Total comprehensive (loss) / income for the year
Total comprehensive (loss) / 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
Total - Basic EPS
Total - Diluted EPS
Continuing operations – Basic EPS
Continuing operations – Diluted EPS
Discontinued operations – Basic EPS
Discontinued operations – Diluted EPS
Adjusted earnings per share from continuing operations attributable
to the ordinary equity holders of the company
Continuing operations - Adjusted Basic EPS
Continuing operations - Adjusted Diluted EPS
Notes
2
3
7
8
13
9
9
9
9
The notes on pages 66 to 95 form an integral part of these financial statements.
2022
£’000
31,220
(18,121)
13,099
(7,480)
(7,278)
(1,659)
(124)
(1,783)
(1,031)
(2,814)
(120)
(2,934)
206
(2,728)
(2,728)
-
(5.0p)
(5.0p)
(4.8p)
(4.8p)
(0.2p)
(0.2p)
4.4p
4.4p
2021
£’000
27,067
(14,899)
12,168
(8,734)
(4,332)
(898)
(798)
(1,696)
76
(1,620)
28,373
26,753
(355)
26,398
26,682
(284)
46.9p
45.6p
(2.8p)
(2.7p)
49.7p
48.3p
4.3p
4.2p
265204 Bigblu_pp054_pp072.indd 59
265204 Bigblu_pp054_pp072.indd 59
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
59
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW
Consolidated Statement of
Financial Position
FOR THE YEAR ENDED 30 NOVEMBER 2022
Registered Number 09223439
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
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
Retained losses
Capital and reserves attributable to
owners of Bigblu Broadband Plc
Total equity
Notes
10
11
12
19
14
15
16
17
17
18
19
20
20
21
21
21
21
21
21
2022
£’000
2,881
7,433
5,830
303
16,447
4,195
1,142
2,335
7,672
24,119
(8,839)
(685)
(9,524)
(559)
(646)
(1,205)
(10,729)
13,390
8,763
8,589
309
26,120
-
(2,546)
(3,317)
(219)
(24,309)
13,390
13,390
2021
£’000
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
Approved by the Board on 20 March 2023 and signed on its behalf by:
Andrew Walwyn
Chief Executive Officer
The notes on pages 66 to 95 form an integral part of these financial statements.
60
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 60
265204 Bigblu_pp054_pp072.indd 60
25/04/2023 10:54
25/04/2023 10:54
Company Statement of
Financial Position
FOR THE YEAR ENDED 30 NOVEMBER 2022
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
Other payables
Net assets
Equity
Share capital
Share premium
Share option reserve
Capital redemption reserve
Other equity reserve
Listing cost reserve
Merger relief reserve
Retained (losses) / profits
Total equity
Notes
10
11
12
14
16
17
17
20
20
21
21
21
21
21
2022
£’000
113
35
32,913
33,061
768
954
1,722
(1,441)
(685)
(2,126)
(13)
32,644
8,763
8,589
309
26,120
-
(219)
-
(10,918)
32,644
2021
£’000
4
53
44,201
44,258
1,550
3,924
5,474
(3,127)
(685)
(3,812)
-
45,920
8,749
8,589
-
26,120
-
(219)
-
2,681
45,920
In accordance with section 408 of the Companies Act 2006 the parent company has not presented its own Income Statement, which
resulted in a loss after tax of £13.6m (2021: profit £18.8m).
Approved by the Board on 20 March 2023 and signed on its behalf by:
Andrew Walwyn
Chief Executive Officer
The notes on pages 66 to 95 form an integral part of these financial statements.
265204 Bigblu_pp054_pp072.indd 61
265204 Bigblu_pp054_pp072.indd 61
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
61
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Consolidated Statement of
Cash Flows
FOR THE YEAR ENDED 30 NOVEMBER 2022
Notes
7
13
11
2
10
10
8
24
10
11
11
13
Loss after tax from Continuing operations
(Loss) / Profit after tax from Discontinued operations
(Loss) / Profit for the year including discontinued operations
Adjustments for:
Interest charge
Gain on disposal of subsidiaries
Amortisation of intangible assets
Release of grant payables
Depreciation of property, plant and equipment - owned assets
Depreciation of property, plant and equipment - ROU assets
Tax charge / (credit)
Share based payments
Foreign exchange variance and other non-cash items
(Increase) / Decrease in inventories
Increase in trade and other receivables
Decrease in trade and other payables
Gain on disposals of fixed assets
Cash generated from / (used in) operations
Interest paid
Tax paid
Net cash outflow from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of business
Purchase of other 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
2022
£’000
(2,814)
(120)
(2,934)
124
-
702
-
2,281
761
1,031
309
(102)
(440)
(212)
(1,353)
(16)
151
(124)
(539)
(512)
(1,191)
(1,211)
(241)
-
-
2,843
200
14
-
-
-
-
(708)
(694)
(1,006)
5,201
4,195
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)
(1,640)
(6,009)
-
(53)
(2,533)
92
31,094
22,591
435
(26,120)
2,000
(8,400)
2,000
(971)
(31,056)
(10,105)
15,306
5,201
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 66 to 95 form an
integral part of these financial statements.
62
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 62
265204 Bigblu_pp054_pp072.indd 62
25/04/2023 10:54
25/04/2023 10:54
Company Statement of
Cash Flows
FOR THE YEAR ENDED 30 NOVEMBER 2022
(Loss) / Profit for the year
Adjustments for:
Interest charge
Gain on disposal of investments
Impairment charges
Amortisation of intangible assets
Depreciation
Share based payments
Decrease / (Increase) in trade and other receivables
Decrease in trade and other payables
Cash (used in) / generated from operations
Interest paid
Net cash outflow from operating activities
Investing activities
Proceeds from sale of subsidiary
Purchase of property, plant and equipment
Purchase of intangibles
Net cash (used) / generated in investing activities
Financing activities
Proceeds from issue of ordinary share capital
Return of capital to shareholders
Repayment of loans
Principal elements of lease payments
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes on pages 66 to 95 form an integral part of these financial statements.
2022
£’000
(13,599)
121
-
11,446
18
28
309
127
(1,715)
(3,265)
(279)
(3,544)
2,843
(81)
-
2,762
14
-
-
(14)
-
(782)
1,550
768
2021
£’000
18,818
710
(24,301)
1,471
-
1
163
(2,749)
(27)
(5,914)
(187)
(6,101)
31,094
(5)
(53)
31,036
435
(26,120)
(8,400)
-
(34,085)
(9,150)
10,700
1,550
265204 Bigblu_pp054_pp072.indd 63
265204 Bigblu_pp054_pp072.indd 63
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
63
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Consolidated Statement of
Changes in Equity
FOR THE YEAR ENDED 30 NOVEMBER 2022
l
a
t
o
T
y
t
i
u
q
e
0
0
0
’
£
0
0
0
’
£
t
s
e
r
e
t
n
I
-
n
o
N
g
n
i
l
l
o
r
t
n
o
c
l
a
t
o
T
0
0
0
’
£
f
e
i
l
e
r
r
e
g
r
e
M
0
0
0
’
£
e
v
r
e
s
e
r
t
s
o
c
g
n
i
t
s
L
i
0
0
0
’
£
e
v
r
e
s
e
r
1
6
7
,
8
1
1
7
5
,
4
0
9
1
,
4
1
2
7
9
,
5
)
9
1
2
(
0
0
0
£
’
e
v
r
e
s
e
r
)
7
1
3
3
(
,
0
0
0
£
’
e
v
r
e
s
e
r
)
9
6
5
2
(
,
e
s
r
e
v
e
R
i
n
g
e
r
o
F
n
o
i
t
i
s
u
q
c
a
i
e
g
n
a
h
c
x
e
r
e
h
t
O
y
t
i
u
q
e
0
0
0
£
’
e
v
r
e
s
e
r
0
0
0
£
’
s
e
s
s
o
l
i
d
e
n
a
t
e
R
e
r
a
h
S
n
o
i
t
p
o
0
0
0
£
’
e
v
r
e
s
e
r
4
9
2
1
,
)
3
0
4
2
3
(
,
4
1
6
2
,
3
6
1
)
6
1
2
(
)
0
2
1
,
6
2
(
1
1
9
,
5
1
)
4
3
9
,
2
(
4
1
9
0
3
0
9
0
9
3
,
3
1
-
-
-
-
-
-
-
-
-
)
5
6
8
,
5
(
)
5
6
8
,
5
(
-
5
3
4
-
0
0
0
,
2
8
7
5
,
1
5
3
4
2
2
4
3
5
7
,
6
2
)
4
8
2
(
7
3
0
,
7
2
-
-
-
-
-
-
3
6
1
)
6
1
2
(
4
1
9
0
3
0
9
1
1
9
,
5
1
4
3
9
,
2
0
9
3
,
3
1
-
-
-
-
-
-
)
0
2
1
,
6
2
(
)
2
7
9
,
5
(
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
3
1
-
-
-
-
-
-
-
2
2
4
-
-
7
3
0
7
2
,
-
-
-
-
3
6
1
)
5
5
3
(
-
-
-
-
-
-
-
-
0
0
0
£
’
e
v
r
e
s
e
r
l
a
t
i
p
a
C
n
o
i
t
p
m
e
d
e
r
e
r
a
h
S
e
r
a
h
S
-
4
2
3
0
0
0
’
£
0
8
1
,
4
3
0
0
0
’
£
8
3
6
,
8
-
1
1
1
i
m
u
m
e
r
p
l
a
t
i
p
a
c
-
-
-
-
-
-
-
-
-
e
t
o
N
2
1
3
1
4
2
r
a
e
y
e
h
t
r
o
f
)
s
s
o
L
(
/
t
fi
o
r
P
0
2
0
2
r
e
b
m
e
c
e
D
1
t
A
s
e
r
a
h
s
f
o
e
u
s
s
I
s
e
r
a
h
s
f
o
n
o
i
t
i
s
u
q
c
A
i
-
n
o
n
i
y
b
y
r
a
d
s
b
u
s
i
n
i
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
i
i
y
r
a
d
s
b
u
s
f
o
l
a
s
o
p
s
D
i
d
e
s
a
b
-
e
r
a
h
s
d
e
l
t
t
e
s
y
t
i
u
q
E
i
e
v
s
n
e
h
e
r
p
m
o
c
r
e
h
t
O
e
s
n
e
p
x
e
l
a
t
i
p
a
c
f
o
n
r
u
t
e
R
s
t
n
e
m
y
a
p
)
4
9
2
1
,
(
)
2
8
2
6
1
,
(
)
7
7
7
2
,
(
0
2
1
6
2
,
)
5
1
9
,
5
2
(
-
-
-
-
-
-
-
-
-
-
-
)
6
1
1
(
)
9
1
2
(
)
7
1
3
3
(
,
)
0
3
4
2
(
,
)
9
1
2
(
)
7
1
3
3
(
,
)
6
4
5
2
(
,
-
-
-
-
-
-
-
-
)
4
3
9
2
,
(
)
1
8
5
1
2
(
,
-
-
-
9
0
3
6
0
2
-
0
2
1
6
2
,
9
8
5
,
8
9
4
7
,
8
1
2
0
2
r
e
b
m
e
v
o
N
0
3
t
A
-
-
-
-
-
-
-
-
-
4
1
-
-
0
2
4
2
d
e
s
a
b
-
e
r
a
h
s
d
e
l
t
t
e
s
y
t
i
u
q
E
i
e
v
s
n
e
h
e
r
p
m
o
c
r
e
h
t
O
e
s
n
e
p
x
e
s
t
n
e
m
y
a
p
s
e
r
a
h
s
f
o
e
u
s
s
I
r
a
e
y
e
h
t
r
o
f
)
s
s
o
L
(
/
t
fi
o
r
P
)
9
0
3
4
2
(
,
9
0
3
0
2
1
6
2
,
9
8
5
,
8
3
6
7
,
8
2
2
0
2
r
e
b
m
e
v
o
N
0
3
t
A
.
s
t
n
e
m
e
t
a
t
s
l
i
a
c
n
a
n
fi
e
s
e
h
t
f
o
t
r
a
p
l
a
r
g
e
t
n
i
n
a
m
r
o
f
5
9
o
t
6
6
s
e
g
a
p
n
o
s
e
t
o
n
e
h
T
64
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 64
265204 Bigblu_pp054_pp072.indd 64
25/04/2023 10:54
25/04/2023 10:54
Company Statement of
Changes in Equity
FOR THE YEAR ENDED 30 NOVEMBER 2022
l
a
t
o
T
y
t
i
u
q
e
0
0
0
£
’
/
s
t
fi
o
r
p
)
s
e
s
s
o
l
(
0
0
0
’
£
i
d
e
n
a
t
e
R
5
3
4
3
6
1
-
-
4
2
6
2
5
,
5
4
1
8
1
8
8
1
,
8
1
8
,
8
1
-
-
-
-
-
-
f
e
i
l
e
r
r
e
g
r
e
M
0
0
0
’
£
e
v
r
e
s
e
r
2
7
9
,
5
r
e
h
t
O
y
t
i
u
q
e
0
0
0
£
’
e
v
r
e
s
e
r
4
9
2
1
,
)
0
2
1
6
2
,
(
)
2
8
2
,
6
1
(
)
2
7
9
,
5
(
)
4
9
2
1
,
(
4
1
9
0
3
-
-
0
2
9
,
5
4
1
8
6
2
,
)
9
9
5
3
1
,
(
)
9
9
5
,
3
1
(
4
4
6
2
3
,
)
8
1
9
,
0
1
(
-
-
-
-
-
-
-
-
-
-
t
s
o
c
g
n
i
t
s
L
i
0
0
0
’
£
e
v
r
e
s
e
r
)
9
1
2
(
-
-
-
-
-
-
-
)
9
1
2
(
)
9
1
2
(
-
-
e
r
a
h
S
n
o
i
t
p
o
0
0
0
’
£
e
v
r
e
s
e
r
4
1
6
,
2
3
6
1
)
7
7
7
,
2
(
-
-
-
9
0
3
9
0
3
l
a
t
i
p
a
C
n
o
i
t
p
m
e
d
e
r
e
r
a
h
S
-
-
-
-
0
0
0
’
£
e
v
r
e
s
e
r
-
-
4
2
3
0
0
0
’
£
i
m
u
m
e
r
p
0
8
1
,
4
3
0
2
1
,
6
2
0
2
1
,
6
2
9
8
5
,
8
)
5
1
9
,
5
2
(
-
-
-
-
-
-
e
r
a
h
S
l
a
t
i
p
a
c
0
0
0
’
£
8
3
6
,
8
-
1
1
1
-
-
-
4
1
-
9
4
7
,
8
0
2
1
,
6
2
9
8
5
,
8
3
6
7
,
8
e
t
o
N
0
2
4
2
0
2
4
2
d
e
s
a
b
-
e
r
a
h
s
d
e
l
t
t
e
s
-
y
t
i
u
q
E
0
2
0
2
r
e
b
m
e
v
o
N
0
3
t
A
r
a
e
y
e
h
t
r
o
f
t
fi
o
r
P
s
e
r
a
h
s
f
o
e
u
s
s
I
l
a
t
i
p
a
c
f
o
n
r
u
t
e
R
s
t
n
e
m
y
a
p
d
e
s
a
b
-
e
r
a
h
s
d
e
l
t
t
e
s
-
y
t
i
u
q
E
2
2
0
2
r
e
b
m
e
v
o
N
0
3
t
A
s
t
n
e
m
y
a
p
1
2
0
2
r
e
b
m
e
v
o
N
0
3
t
A
r
a
e
y
e
h
t
r
o
f
s
s
o
L
s
e
r
a
h
s
f
o
e
u
s
s
I
.
s
t
n
e
m
e
t
a
t
s
l
i
a
c
n
a
n
fi
e
s
e
h
t
f
o
t
r
a
p
l
a
r
g
e
t
n
i
n
a
m
r
o
f
5
9
o
t
6
6
s
e
g
a
p
n
o
s
e
t
o
n
e
h
T
265204 Bigblu_pp054_pp072.indd 65
265204 Bigblu_pp054_pp072.indd 65
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
65
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW
Notes to the Financial Statements
FOR THE YEAR ENDED 30 NOVEMBER 2022
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 2022 were
authorised for issue by the Board on 20 March 2023 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 and
International Accounting Standards as issued by the International
Accounting Standards Board
Interpretations
(collectively IFRSs). The financial statements have been prepared
on the historical cost basis.
(IASB) and
The consolidated financial statements are for the 12 months to
30 November 2022. 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.
At the date of authorisation of these financial statements, the Group
has not applied the following new and revised IFRS Accounting
Standards that have been issued but are not yet effective, and in
some cases have not yet been adopted by the Group:
•
•
Amendments to IAS 1: Classification of Liabilities as Current
or Non-current
Amendments to IAS 1 and IFRS Practice Statement 2:
Disclosure of Accounting Policies
•
Amendments to IAS 8: Definition of Accounting Estimates
•
Amendments to IAS 12: Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
66
Bigblu Broadband plc / Annual Report and Accounts 2022
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial statements
of the Group in future periods.
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 4 to 25. The financial position
of the Group, its cash flows and liquidity position are described in
the Finance Review on pages 11 to 21. 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.
During the year the Group generated an adjusted EBITDA from
continuing operations before a number of non-cash and start-up
costs expenses as shown on page 15, of £5.1m (2021: £4.6m),
and with cash inflow from operations before interest, tax and
capital expenditure, of £5.8m (2021: inflow of £5.2m). Net cash at
30 November 2022 was £4.2m (FY21: £5.2m) after the payment
of £1.2m following the acquisition of the customers and assets
of Clear Networks (Pty) in January 2022. The Group also has a
undrawn RCF with Santander that was increased in the year from
£5m to £10m.
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. 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.
265204 Bigblu_pp054_pp072.indd 66
265204 Bigblu_pp054_pp072.indd 66
25/04/2023 10:54
25/04/2023 10:54
REVENUE
that reflects
is recognised at an amount
Revenue
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
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).
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.
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.
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.
PROPERTY, PLANT AND EQUIPMENT
Property, plant, and equipment are stated at cost
accumulated depreciation and impairment losses, if any.
less
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.
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
Land
Building improvements
Fixtures, fittings & infrastructure
IT hardware and software
Motor vehicles
Rental Stock
0% on cost
20% on cost
10% - 25% on cost
25% on cost
25% on cost
25% on cost
Bigblu Broadband plc / Annual Report and Accounts 2022
67
265204 Bigblu_pp054_pp072.indd 67
265204 Bigblu_pp054_pp072.indd 67
25/04/2023 10:54
25/04/2023 10:54
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
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.
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
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. In relation to our Quickline
investment the loan notes are debt and held at amortised cost
whilst shares are investment in equity and held at fair value with
movements recognised in other comprehensive income under
IFRS 9.
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.
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
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.
68
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 68
265204 Bigblu_pp054_pp072.indd 68
25/04/2023 10:54
25/04/2023 10:54
IMPAIRMENT OF NON-FINANCIAL ASSETS
FINANCIAL INSTRUMENTS
The Group assesses annually whether there is any indication that
any of its assets have been impaired. If such an 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 the 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.
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
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.
leases various offices, warehouses,
The Group
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.
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).
As indicated above the Group 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 22). 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.
265204 Bigblu_pp054_pp072.indd 69
265204 Bigblu_pp054_pp072.indd 69
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
69
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
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.
Lease payments included in the measurement of the lease liability
comprise:
•
•
•
•
•
lease payments
Fixed
payments), less any lease incentives.
(including
in-substance fixed
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.
70
Bigblu Broadband plc / Annual Report and Accounts 2022
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 2022 the amount accounted for as low value
assets was £25k (2021: £57k) primarily as a result of excluding
leases for space to locate repeater equipment owned by Brdy AS
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.
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.
265204 Bigblu_pp054_pp072.indd 70
265204 Bigblu_pp054_pp072.indd 70
25/04/2023 10:54
25/04/2023 10:54
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
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
The Group operates a defined contribution scheme, the pension
cost charge represents the contributions payable.
(a) Property, plant and equipment
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.
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.
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.
265204 Bigblu_pp054_pp072.indd 71
265204 Bigblu_pp054_pp072.indd 71
25/04/2023 10:54
25/04/2023 10:54
Bigblu Broadband plc / Annual Report and Accounts 2022
71
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
(c) Forecasting
(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.
(i) Fair value measurement
A number of assets and liabilities included in the Group’s
financial statements
require measurement at, and/or
disclosure of, fair value. The fair value measurement of the
Group’s financial and non-financial assets and liabilities
utilises market observation inputs and data as far as possible.
Inputs used in determining fair value measurements are
categorised into different levels based on how observable the
inputs used in the valuation technique utilised are (the ‘fair
value hierarchy’):
•
•
•
Level 1: Quoted prices in active markets for identical items
(unadjusted)
Level 2: Observable direct or indirect inputs other than Level 1
inputs
Level 3: Unobservable inputs (i.e. not derived from market
data
The classification of an item into the above levels is based on the
lowest level of the inputs used that has a significant effect on the
fair value measurement of the item.
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.
(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 amortised 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.
72
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp054_pp072.indd 72
265204 Bigblu_pp054_pp072.indd 72
25/04/2023 10:54
25/04/2023 10:54
2. CONTINUING OPERATIONS REVENUE
Recurring revenue - airtime
Recurring revenue - other
Other non recurring revenue
2022
£’000
29,528
101
1,591
31,220
2021
£’000
24,972
624
1,471
27,067
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
2022
£’000
681
4,027
26,512
31,220
2021
£’000
747
4,544
21,776
27,067
2022
£’000
8,691
2,684
5,300
2021
£’000
9,342
2,975
3,441
16,675
15,758
3. PROFIT FROM GROUP OPERATIONS
Continuing operations
Discontinued operations
The profit 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)
Gain on sale of discontinued operation (note 13)
Share based payments (Note 24)
Wages & salaries and social security costs (Note 5)
Profit on disposal of Fixed Assets
Impairment of Fixed Assets
Pension costs (Note 5)
2022
£’000
1,315
761
702
-
309
5,631
-
966
269
2021
£’000
804
586
-
-
163
6,515
-
-
236
2022
£’000
-
-
-
-
-
-
-
-
-
2021
£’000
1,027
253
21
(25,925)
-
2,649
(8)
-
20
265204 Bigblu_pp073_end.indd 73
265204 Bigblu_pp073_end.indd 73
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
73
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
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:
Other services
2022
£’000
2021
£’000
77
7
84
74
7
81
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
2022
£’000
5,158
473
269
5,900
2021
£’000
5,930
585
236
6,751
2022
£’000
-
-
-
-
2021
£’000
2,371
278
20
2,669
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
2022
2021
2022
Operating staff
Sales Staff
Management and administrative staff
53
13
24
90
56
14
26
96
6. DIRECTORS’ REMUNERATION
Salaries
Fees
Benefits
Pension costs
-
-
-
-
2022
£’000
975
-
11
20
2021
37
2
8
47
2021
£’000
1,840
136
5
20
The highest paid director’s aggregate remuneration was £421k (2021: £853k) including pension contributions of £9k (2021: £11k).
Details of directors’ remuneration, including pension contributions, are set out in the Directors’ Report on page 29. The salaries include
bonuses of £50k (FY21: £175k) charged to discontinued operations.
1,006
2,001
74
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 74
265204 Bigblu_pp073_end.indd 74
25/04/2023 10:53
25/04/2023 10:53
7. FINANCE COSTS
Bank interest payable
Other interest
Lease interest expense
Total interest payable
Other finance costs
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
2022
£’000
38
6
78
122
2
124
-
-
-
124
-
124
2021
£’000
747
-
105
852
-
852
38
16
54
798
54
852
Interest payable on the Revolving Credit Facility is 3.40% (FY21: 2.95%) + SONIA (Sterling Overnight Index Average) (FY21: LIBOR).
Interest paid in the year amounts to £0.04m (FY21: £0.7m).
8. TAXATION
A) TAX (CREDIT) / CHARGE FOR THE YEAR
UK Corporation tax
Overseas corporation tax
Deferred tax charge / (credit)
Current tax charge / (credit)
2022
£’000
-
554
477
1,031
2021
£’000
-
123
(199)
(76)
265204 Bigblu_pp073_end.indd 75
265204 Bigblu_pp073_end.indd 75
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
75
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
B) TAX RECONCILIATION
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% (2021: 19%)
Tax effect of expenses that are not deductible in determining taxable profit
Adjustment for prior periods
Deferred tax not recognised1
Foreign tax rate differences
Changes in deferred tax rate
Tax (credit) / charge at effective tax rate for the year
2022
£’000
(1,783)
(339)
194
-
1,185
(9)
-
1,031
1 Note that deferred tax assets on losses have only been recognised to the extent they are considered recoverable in the foreseeable future.
C) DEFERRED TAX
The deferred tax included in the balance sheet as per note 19, is as follows:
Deferred tax asset
Deferred tax liability
2022
£’000
303
(646)
(343)
2021
£’000
(1,696)
(322)
60
(70)
1,170
15
(929)
(76)
2021
£’000
709
(13)
696
76
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 76
265204 Bigblu_pp073_end.indd 76
25/04/2023 10:53
25/04/2023 10:53
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.
Basic and diluted EPS
Basic EPS – Loss attributable to shareholders1
Loss attributable to shareholders
Add back exceptional costs
Add back share based payments
Add back loss on discontinued operations
Adjusted Profit attributable to shareholders from continuing
operations
Add back impairment of Fixed Assets
Add back amortisation
Add back deferred taxation adjustment in Norway
Adjusted EPS – Adjusted Profit attributable to shareholders from
continuing operations2
Basic Diluted EPS – Loss attributable to shareholders
Adjusted Diluted EPS – Adjusted Profit attributable to shareholders
from continuing operations as above2
Basic and diluted EPS
Profit for the financial year1
Add: adjustment for non-controlling interest share of losses
Basic EPS – Profit attributable to shareholders
Profit attributable to shareholders
Add back exceptional costs
Add back share based payments
Less profit on discontinued operations
30 November
2022
Weighted
Average
Number of
Shares
Profit/(Loss)
£’000
Per Share
Amount
Pence
58,376,211
(5.0)
(2,934)
(2,934)
2,707
309
120
202
966
702
714
2,584
58,376,211
(2,934)
58,828,959
2,584
58,828,959
4.4
(5.0)
4.4
30 November
2021
Weighted
Average
Number of
Shares
Per Share
Amount
Pence
57,697,017
46.9
Profit/(Loss)
£’000
26,753
(284)
27,037
26,753
3,922
163
(28,373)
Adjusted EPS – Adjusted Profit attributable to shareholders from
continuing operations2
Basic Diluted EPS – Profit attributable to shareholders
Adjusted Diluted EPS – Adjusted Profit attributable to shareholders
from continuing operations as above2
2,465
57,697,017
27,037
2,465
59,251,343
59,251,343
4.3
45.6
4.2
1
2
The loss attributable to shareholders of £2.9m (2021: £27.0m profit) is the loss for the financial year of £2.9m (2021: £26.8m profit) after adjusting for the add back of
the loss attributable to non-controlling interests of £Nil (2021: £0.3m loss).
Non-GAAP measure, the profit attributable to shareholders from continuing operations is £2.6m (2021: £2.5m profit) after adjusting for the loss related to the sale of the
discontinued operations in FY21 and adding back exceptional costs, share based payments, impairment of Fixed Assets, amortisation and the deferred tax adjustment in
Norway.
Bigblu Broadband plc / Annual Report and Accounts 2022
77
265204 Bigblu_pp073_end.indd 77
265204 Bigblu_pp073_end.indd 77
25/04/2023 10:53
25/04/2023 10:53
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
10. PROPERTY, PLANT & EQUIPMENT - GROUP
Land &
Buildings
£’000
Fixtures,
Fittings &
Infrastructure
£’000
IT Hardware
& Software
£’000
Motor
Vehicles
£’000
Rental
Stock
£’000
Cost
At 1 December 2020
Exchange Differences
Additions
Disposals
At 30 November 2021
Exchange Differences
Additions
Disposals
Reclassification as intangible
assets
At 30 November 2022
Accumulated Depreciation
At 1 December 2020
Exchange Differences
Depreciation charge
Disposals
At 30 November 2021
Exchange Differences
Depreciation charge
Asset impairment
Disposals
Reclassification as intangible
amortisation
At 30 November 2022
Net book value
At 30 November 2022
At 30 November 2021
1,726
(38)
17
(566)
1,139
61
275
(614)
-
861
818
(22)
201
(252)
745
43
224
-
(545)
-
467
394
394
25,487
(600)
5,403
(17,040)
13,250
321
1,157
(436)
-
1,007
(34)
582
(474)
1,081
36
490
(59)
(368)
14,292
1,180
16,331
(526)
2,211
(7,610)
10,406
270
1,527
966
(433)
-
12,736
1,556
2,844
649
(14)
205
(387)
453
13
295
-
(58)
(71)
632
548
628
364
-
24
(376)
12
-
34
-
-
46
93
-
53
(141)
5
-
21
-
-
-
26
20
7
Total
£’000
28,767
(678)
6,066
(18,456)
15,699
421
2,108
(1,109)
(368)
183
(6)
40
-
217
3
152
-
-
372
16,751
-
-
-
-
-
-
9
-
-
-
9
363
217
17,891
(562)
2,670
(8,390)
11,609
326
2,076
966
(1,036)
(71)
13,870
2,881
4,090
78
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 78
265204 Bigblu_pp073_end.indd 78
25/04/2023 10:53
25/04/2023 10:53
RIGHT OF USE ASSETS
Group Property, Plant & Equipment includes the following values for Right of Use assets
Land &
Buildings
£’000
Fixtures,
Fittings &
Infrastructure
£’000
IT Hardware
& Software
£’000
Motor
Vehicles
£’000
Cost
At 1 December 2020
Exchange Differences
Additions
Disposals
At 30 November 2021
Exchange Differences
Additions
Disposals
At 30 November 2022
Accumulated Depreciation
At 1 December 2020
Exchange Differences
Depreciation charge
Disposals
At 30 November 2021
Exchange Differences
Depreciation charge
Disposals
At 30 November 2022
Net book value At 30 November 2022
At 30 November 2021
1,383
(23)
6
(283)
1,083
58
267
(614)
794
7,072
(103)
28
(3,083)
3,914
58
355
(435)
3,892
633
4,814
(21)
195
(93)
714
42
212
(546)
422
372
369
(81)
582
(2,270)
3,045
44
487
(432)
3,144
748
869
45
(1)
23
(10)
57
-
149
(58)
148
26
(1)
34
(17)
42
-
62
(58)
46
102
15
Total
£’000
8,719
(127)
57
(3,595)
5,054
116
771
(1,107)
4,834
219
-
-
(219)
-
-
-
-
-
134
5,607
-
25
(159)
-
-
-
-
-
-
-
(103)
836
(2,539)
3,801
86
761
(1,036)
3,612
1,222
1,253
265204 Bigblu_pp073_end.indd 79
265204 Bigblu_pp073_end.indd 79
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
79
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
11. INTANGIBLE ASSETS - GROUP
Goodwill
£’000
Customer
Contracts
£’000
Software
£’000
Intellectual
Property
£’000
Cost
At 1 December 2020
Additions
Disposals of assets of discontinued operations
Exchange Difference
At 30 November 2021
Additions
Acquired through business combination
Reclassification of PPE
Exchange Difference
At 30 November 2022
Accumulated Amortisation
At 1 December 2020
Amortisation
Accumulated amortisation of assets of
discontinued operations
Exchange Differences
At 30 November 2021
Amortisation
Reclassification of PPE
Exchange Differences
At 30 November 2022
Net book value At 30 November 2022
At 30 November 2021
12,049
-
(6,414)
(112)
5,523
-
-
-
138
5,661
4,180
-
(96)
(149)
3,935
-
907
-
177
5,019
212
4,176
-
(212)
-
-
-
-
-
-
5,661
5,523
4
(96)
(149)
3,935
378
-
182
4,495
524
-
127
53
(127)
-
53
241
-
368
(7)
655
-
17
(17)
-
-
294
71
(3)
362
293
53
Total
£’000
16,371
53
(6,652)
(261)
9,511
241
1,892
368
308
15
-
(15)
-
-
-
985
-
-
985
12,320
15
-
(15)
-
-
30
-
-
30
955
-
4,403
21
(340)
(149)
3,935
702
71
179
4,887
7,433
5,576
80
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 80
265204 Bigblu_pp073_end.indd 80
25/04/2023 10:53
25/04/2023 10:53
ACQUISITION OF BUSINESS
The Company completed the acquisition of customers and certain business assets from Clear Networks (Pty) Ltd in January 2022.
The book value at acquisition, which is equivalent to fair value of the assets, was as follows:
Property, plant and equipment
Inventory
Other current assets
Liabilities
Intellectual Property
Customer Contracts
Deferred Tax arising on fair valued intangible assets
Gain on bargain purchase
Total consideration
Satisfied by:
Cash
Deferred consideration
Fair Value
£’000
146
13
49
(67)
985
907
(562)
(21)
1,450
1,154
296
1,450
Post-acquisition trading contributed £1.6m of revenue in the year and EBITDA of £0.3m. Revenue was included in revenue from
contracts and all costs were included either in cost of sales, administrative or distribution expenses.
Legal costs associated with the acquisition were considered exceptional in nature and included within administrative costs.
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 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 indicated that no impairment was required to the carrying value if Goodwill. 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 8.3% (FY21: 6.7%). 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 £2.1m (FY21: £2.2m) in respect of Brdy AS and
£3.6m (FY21: £3.3m) in respect of SkyMesh. Recognition of impairment losses was £nil (FY21: £nil). Impairment charges are included
in Administrative Expenses in the Statement of comprehensive income. In FY21 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.
265204 Bigblu_pp073_end.indd 81
265204 Bigblu_pp073_end.indd 81
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
81
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
12. INVESTMENTS
Subsidiaries
Other equity investments
Loan notes
Opening balance
Movements during the year:
Unlisted shares acquired as consideration for sale of
subsidiary
Loan notes acquired as consideration
Loan note interest
Disposal of subsidiary
Impairment charge
Group
Company
2022
£’000
-
2,240
3,590
5,830
5,672
-
-
158
-
-
5,830
2021
£’000
-
2,240
3,432
5,672
2022
£’000
27,083
2,240
3,590
32,913
2021
£’000
38,529
2,240
3,432
44,201
-
44,201
52,393
2,240
3,360
72
-
-
5,672
-
-
158
-
(11,446)
32,913
2,240
3,360
72
(12,393)
(1,471)
44,201
The carrying value of the investment in Brdy AS held by the Company at 30 November 2022 was reduced by an impairment charge
of £11.4m. There were no additions or disposals in the year.
The following table set out the valuation techniques used in determination of fair values, including the key inputs used:
Item
Valuation approach and inputs used
Investment in loan notes due from QCL
Midco Limited
Investment in the equity of QCL Topco
Limited
The loan notes constitute an investment in debt not held for trade purposes and has been
recognised and measured under the amortised cost method with interest income accrued
aggregated to the investment balance
Other equity investment represents the Company’s interest in the equity of QCL Topco
Limited, which is measured at the transaction cost on disposal during the year ended
30 November 2021. Having considered the prospects of the business, its financial results
and position, further fundraises and the corresponding impact of dilution, no material
change in the fair value of the investment has been identified.
82
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 82
265204 Bigblu_pp073_end.indd 82
25/04/2023 10:53
25/04/2023 10:53
Subsidiary Undertakings
Address & Country of Incorporation
Class of
Share
Parent Company
No of Shares
Brdy AS (formerly Bigblu
Norge AS)
Rosenholmveien 25, 1414 Trollåsen,
Norway
Ordinary
Bigblu Broadband
plc
1,700,412 of
1.40 Nok each
SkyMesh Pty Ltd
51 Alfred Street, Fortitude Valley
QLD 4006, Australia
Ordinary
Bigblu Broadband
plc
20,898,680 of
£0.196 each
% held by
parent
100%
100%
BorderNET Internet Pty Ltd 51 Alfred Street, Fortitude Valley
Ordinary
SkyMesh Pty Ltd 2,863,105 of
100%
Bigblu Broadband Limited
BBB Ausco Limited*
BBB Norco Limited*
* Dormant companies
QLD 4006, Australia
Tompkins Wake, Level 11, 41
Shortland Street, Auckland, 1140,
New Zealand
Ordinary
SkyMesh Pty Ltd 100 of NZ$1
100%
each
£0.09 each
6th Floor
60 Gracechurch Street
London
EC3V 0HR
6th Floor
60 Gracechurch Street
London
EC3V 0HR
Ordinary
Bigblu Broadband
plc
1 of £0.01
100%
Ordinary
Bigblu Broadband
plc
1 of £0.01
100%
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 remained 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.
Group financial information for 2021 set out below is thus a combination of these two discontinued operations. 2021 comparative
information throughout the Financial Statements has been adjusted to reflect the revised split of activities between continuing and
discontinued operations.
265204 Bigblu_pp073_end.indd 83
265204 Bigblu_pp073_end.indd 83
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
83
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
FINANCIAL PERFORMANCE AND CASH FLOW INFORMATION
Revenue
Expenses
Loss before tax
Taxation on operations
Loss after tax of discontinued operations
(Loss) / Gain on sale of the subsidiary after tax (see below)
Adjustment to fair value of deferred consideration (see below)
(Loss) / Profit from discontinued operations
Net cash (outflow) / inflow from operating activities
Net cash inflow from investing activities
Net cash inflow from financing activities
Net (decrease) / 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
Gain on sale before tax
Corporation tax expense on gain
(Loss) / Gain on sale after tax
Group
2022
£’000
-
-
-
-
-
(120)
-
(120)
(120)
-
-
(120)
-
-
-
-
-
-
(120)
(120)
-
(120)
2021
£’000
3,091
(3,896)
(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
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 £3.6m at November 2022.
84
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 84
265204 Bigblu_pp073_end.indd 84
25/04/2023 10:53
25/04/2023 10:53
The carrying amount of assets and liabilities as at the date of sale (10 June 2021) were:
10 June 2021
£’000
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
During the year the additional cash consideration of £2.8m due at the start of the year was received by the Company in full.
14. CASH AND CASH EQUIVALENTS
Group
Company
Cash and bank accounts
Total cash and cash equivalents
15. INVENTORY
Finished goods
2022
£’000
4,195
4,195
2021
£’000
5,201
5,201
2022
£’000
768
768
Group
2022
£’000
1,142
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
2021
£’000
1,550
1,550
2021
£’000
699
There is no material difference between the amounts stated above and replacement cost.
Write down of inventories to net realisable value amounted to £43k (2021: £25k) all related to continuing operations. £18k (FY21: £Nil)
was recognised as an expense during the year.
265204 Bigblu_pp073_end.indd 85
265204 Bigblu_pp073_end.indd 85
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
85
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
16. TRADE AND OTHER RECEIVABLES
Group
Company
Trade receivables
Other receivables
Deferred consideration
Prepayments and accrued income
Amounts due from group undertakings
2022
£’000
773
506
-
1,056
-
2,335
2021
£’000
802
318
2,843
954
-
4,917
MOVEMENT IN PROVISION FOR IMPAIRMENT OF RECEIVABLES
Individually impaired
As at 1 December 2021
Charged to Income statement
Provision transferred on sale of subsidiaries
Utilised
As at 30 November 2022
2022
£’000
52
-
-
80
822
954
2022
£’000
28
238
-
(142)
124
2021
£’000
146
34
2,843
59
842
3,924
2021
£’000
188
88
(13)
(235)
28
The average credit days taken on sales of goods and services is 9 days (2021: 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 £378k (2021: £330k) 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 2022
2022
£’000
2021
£’000
395
123
70
185
773
475
67
21
239
802
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 2022 or 1 December 2022 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.
86
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 86
265204 Bigblu_pp073_end.indd 86
25/04/2023 10:53
25/04/2023 10:53
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
Company
2022
£’000
4,223
924
534
2,363
795
685
9,524
2021
£’000
4,496
966
82
3,253
623
685
2022
£’000
124
370
-
918
29
685
10,105
2,126
2021
£’000
642
528
48
1,977
-
685
3,880
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average creditors days taken
for trade purchases is 77 days (2021: 81 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. Discussion’s
around specific claims are still ongoing. As in 2021, the provisions as at 30 November 2022 are expected to be utilised within the next
12 months following the end of the financial year, to cover any such costs.
The breakdown of the provisions carrying value is as follows:
Other provisions
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
2022
£’000
685
685
Group and Company
2022
£’000
685
-
-
685
2021
£’000
685
685
2021
£’000
1,468
(1,468)
685
685
265204 Bigblu_pp073_end.indd 87
265204 Bigblu_pp073_end.indd 87
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
87
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
18. NON-CURRENT LIABILITIES
Lease liabilities
Total
Group
Company
2022
£’000
559
559
2021
£’000
835
835
2022
£’000
13
13
2021
£’000
-
-
During the year the unsecured Revolving Credit Facility (RCF) was increased from £5m to £10m, which was fully undrawn as
at 30 November 2022. The revolving credit facility is subject to a fixed charge over the company’s assets, as registered at
Companies House.
Leases attract interest at a rate of between 3.25% and 6%.
MATURITY OF LEASE LIABILITIES
Due 1 – 2 years
Due 2 – 5 years
Total
19. DEFERRED TAXATION
At 1 December
Deferred tax arising on acquisition
Movement in relation to discontinued operations
Charged/(Credited) to the Statement of Comprehensive Income
At 30 November
Deferred tax is provided as follows:
Accelerated capital allowances
Arising on business combinations
Tax losses
Geographical split of deferred tax asset/(liability):
Rest of the World deferred tax asset
Europe deferred tax asset
Rest of the World deferred tax liability
Europe deferred tax liability
Group
2022
£’000
377
182
559
2022
£’000
(696)
562
-
477
2021
£’000
393
442
835
2021
£’000
(397)
-
(92)
(207)
343
(696)
225
(568)
-
(343)
303
-
(646)
-
(343)
408
-
288
696
-
709
(13)
696
88
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 88
265204 Bigblu_pp073_end.indd 88
25/04/2023 10:53
25/04/2023 10:53
20. SHARE CAPITAL
At 30 November 2021
Shares issued in the year
Shares issued at 15p each
At 30 November 2022
No. of
Shares
No.
Share
Capital
£
Share
Premium
£
58,326,120
8,748,918
8,589,117
95,952
14,391
-
58,422,072
8,763,309
8,589,117
All shares issued during the year were as a result of share option exercises generating a total value of £14k.
All issued share capital is fully paid up. All ordinary shares have a par value of £0.15.
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 (2021: £Nil) were offset against the merger relief reserve during 2022.
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 (2021: £8.6m).
Costs of £Nil (2021: £0.3m) were offset against the share premium account during 2022 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.
265204 Bigblu_pp073_end.indd 89
265204 Bigblu_pp073_end.indd 89
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
89
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
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
2022
£’000
2021
£’000
2022
£’000
2021
£’000
212
487
62
-
761
78
25
167
384
34
-
585
90
57
-
-
-
-
-
-
-
28
198
-
25
251
16
-
The total cash outflow for leases was £774k (2021: £1,137k).
The Company had no leases other than those accounted for 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
2022
£’000
986
20
309
1,315
2021
£’000
1,981
20
337
2,338
90
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 90
265204 Bigblu_pp073_end.indd 90
25/04/2023 10:53
25/04/2023 10:53
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:
Outstanding at beginning of year
Exercised during the year
Cancelled during the year
Outstanding at end of year
2022
2021
Number of
Share Options
1,567,659
(95,922)
(786,687)
685,050
Weighted
Average
Exercise price
Number of
Share Options
Weighted
Average
Exercise price
24.06p
15.00p
15.00p
35.74p
4,187,226
(736,263)
(1,883,304)
1,567,659
43.68p
59.14p
20.49p
24.06p
Exercisable at end of year
685,050
35.74p
578,742
65.18p
The options outstanding at 30 November 2022 had a weighted average exercise price of 35.74p (2021: 24.06p), and a weighted
average remaining contractual life of 4.7 years (2021: 4 years).
No new options were granted during the year (2021: 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 October 2023 to August
2029. At 30 November 2022 there were a total of 381,415 options outstanding, with an exercise price of 15p, of which 381,415 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.
265204 Bigblu_pp073_end.indd 91
265204 Bigblu_pp073_end.indd 91
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
91
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
OTHER EMPLOYEE OPTIONS
The maximum term of options granted under other schemes is 10 years from date of grant, with the average term remaining 4 years.
This term applies to all of the 303,605 options vested as at 30 November 2022 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 £309k (2021: £163k), 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
NON-EMPLOYEE OPTIONS
2022
£’000
309
-
309
2021
£’000
337
(174)
163
As at 30 November 2022, 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:
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.
92
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 92
265204 Bigblu_pp073_end.indd 92
25/04/2023 10:53
25/04/2023 10:53
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 16 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 18.
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 Santander Facility is
reported quarterly to the bank in the form 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 17.
265204 Bigblu_pp073_end.indd 93
265204 Bigblu_pp073_end.indd 93
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
93
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
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
Total
Financial liabilities
Trade payables
Other creditors
Lease liabilities
Total
Group
Company
2022
£’000
4,195
773
-
506
5,474
4,223
540
1,354
6,117
2021
£’000
5,201
802
-
318
6,321
4,496
82
1,458
6,036
2022
£’000
768
52
822
34
1,676
124
-
42
166
2021
£’000
1,550
146
3,171
34
4,901
642
48
-
690
The carrying value of financial instruments is a reasonable approximation of fair value due to the short-term maturities of these
instruments.
94
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 94
265204 Bigblu_pp073_end.indd 94
25/04/2023 10:53
25/04/2023 10:53
27. CONTRACT BALANCES
The consolidated statement of financial position includes the following amounts relating to contracts with customers all related to the
continuing operations.
Deferred income – included in Accruals and deferred income
Total contract liabilities
2022
£’000
(787)
(787)
2021
£’000
(838)
(838)
Revenue recognised during 2022 that was included in the contract liability balance at the beginning of the year amounted to £0.8m
(2021: £0.8m). 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.
28. POST BALANCE SHEET EVENTS
SkyMesh, AUSTRALIA
The Company announced that its fully owned Australian business, SkyMesh PTY LTD had completed the acquisition of the satellite
operations of Harbour ISP PTY LTD, a subsidiary of Uniti Group LTD in Australia (the “Acquisition”). The total cash consideration
paid on completion was AUD$4.72m (£2.7m) with a retention of AUD$0.2m (£0.1m), to be paid in March 2023 post reconciliation
of customer numbers. The cash consideration paid on completion was satisfied from existing cash resources including our revolving
credit facilities with Santander. The satellite operations acquired consisted of c.6k customers. The customer base is being transferred
to SkyMesh who will provide full ongoing support services from its Australian Customer Engagement Centre. Pursuant to the terms of
the acquisition agreement, Uniti will continue to provide services for up to three months post completion to ensure a smooth transition
of the customer base. As previously announced, the Directors anticipate that the acquired operations are expected to generate
annualised revenues of c.£2.5m and EBITDA of c.£0.7m with positive cash generation, enabling the Group to continue to reinvest and
grow the business in the Australian market. The Directors believe that the profitability of operations acquired should improve under
Bigblu Broadband’s ownership due to the Group’s better operational gearing, economies of scale and SkyMesh’s dedicated focus on
customers in this sector.
REORGANISATION OF BUSINESS
Since the year end the Group has gone through a reorganisation in our Norwegian business and recognising a reduced UK scale, this
has resulted in redundancies in our Norway business and UK head office.
This has resulted in making approximately 30% of the workforce in our Nordic business redundant in the first quarter of 2023, with
an annualised cost saving of c.£0.4m.
Due to the size of the Group, after the recent disposals in FY20 and FY21, the Group has sought to reduce head office costs to a level
sustainable for the current continuing operations. This will result in approximately 75% of the central team being made redundant, with
annualised savings in the region of £0.5m.
The internal process has commenced with all planned redundancies expected to be complete by May 2023. No provision or costs
related to these processes was recognised in the year ended 30 November 2022 as they commenced after this date.
265204 Bigblu_pp073_end.indd 95
265204 Bigblu_pp073_end.indd 95
25/04/2023 10:53
25/04/2023 10:53
Bigblu Broadband plc / Annual Report and Accounts 2022
95
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORTOVERVIEW Designed and
printed by:
perivan.com
96
Bigblu Broadband plc / Annual Report and Accounts 2022
265204 Bigblu_pp073_end.indd 96
265204 Bigblu_pp073_end.indd 96
25/04/2023 10:54
25/04/2023 10:54
Company Information
SOLICITORS
Burness Paull LLP
50 Lothian Road
Festival Square
Edinburgh, EH3 9WJ
REGISTRARS
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
AUDITORS
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
DIRECTORS
M Tobin OBE
A Walwyn
F Waters
P Howard
C Mills
P Moses
COMPANY REGISTRATION NUMBER
09223439
COMPANY SECRETARY
B Harber
REGISTERED OFFICE
6th Floor
60 Gracechurch Street
London
EC3V 0HR
BROKER & NOMINATED ADVISER
finnCap Ltd
60 New Broad St
London
EC2M 1JJ
2022 CONTINUING BUSINESS
HIGHLIGHTS
TOTAL REVENUE
£31.2m – up 15.1%
2022
2021
£31.2m
£27.1m
Adjusted EBITDA
£5.1m – up 11.4%
2022
2021
£5.1m
£4.6m
Net Cash
£4.2m
2022
2021
EPS
£4.2m
£5.2m
Loss 5.0p
Loss 5.0p
Profit 46.9p
Basic
2022
2021
Adjusted
2022
4.4p
2021
4.3p
Contents
OVERVIEW
1........Company Overview
2........Company Snapshot
STRATEGIC REPORT
4........Chairman’s Statement
6........Chief Executive Report
11......Financial Review
22......Principal Risks and Uncertainties
25......Section 172 (1) Statement
GOVERNANCE
26......Directors’ Report
31......Board of Directors
34......Statement of Directors’ Responsibilities
35......Corporate Governance Statement
48......Annual Statement of the Remuneration Committee Chairman
FINANCIAL STATEMENTS
54......Independent Auditor’s Report
59...... Consolidated Statement of Comprehensive Income
60......Consolidated Statement of Financial Position
61......Company Statement of Financial Position
62......Consolidated Statement of Cash Flows
63......Company Statement of Cash Flows
64......Consolidated Statement of Changes in Equity
65......Company Statement of Changes in Equity
66......Notes to the Financial Statements
IBC.....Company Information
265204 Bigblu_Cover with Spine.indd 5-6
265204 Bigblu_Cover with Spine.indd 5-6
25/04/2023 10:53
25/04/2023 10:53
i
l
B
g
b
u
B
r
o
a
d
b
a
n
d
p
c
l
|
A
n
n
u
a
l
R
e
p
o
r
t
i
&
F
n
a
n
c
a
i
l
S
t
a
t
e
m
e
n
t
s
2
0
2
2
Bigblu Broadband plc
Bigblu Broadband plc
Annual Report & Financial Statements for the year ended 30 November 2022
A Company Registered in England & Wales No. 09223439
265204 Bigblu_Cover with Spine.indd 2-3
265204 Bigblu_Cover with Spine.indd 2-3
25/04/2023 10:53
25/04/2023 10:53