Bigblu Broadband plc
Annual Report & Financial Statements
For the year ended
30 November 2023
A Company Registered in England & Wales No. 09223439
Bigblu Broadband plc
Contents
For the year ended 30 November 2023
Company Information
Company Overview
Strategic Report
Chairman’s Statement
Chief Executive Report
Financial Review
Principal Risks and Uncertainties
Section 172 (1) Statement
Governance
Directors’ Report
Board of Directors
Statement of Directors’ Responsibilities
Corporate Governance Statement
Independent Auditor’s Report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Company statement of financial position
Consolidated statement of cash flows
Company statement of cash flows
Consolidated statement of changes in equity
Company statement of changes in equity
Notes to the financial statements
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Bigblu Broadband plc
Company Information
For the year ended 30 November 2023
Directors
M Tobin OBE
A Walwyn (Resigned 17 May 2024)
F Waters
P Howard
C Mills
P Moses
Company registration number
09223439
Company secretary
Registered office
Broker & Nominated adviser
B Harber
6th Floor
60 Gracechurch Street
London
EC3V 0HR
Cavendish Capital Markets Limited (previously known as
finnCap Ltd)
60 New Broad St
London
EC2M 1JJ
Solicitors
Registrars
Auditors
Burness Paull LLP
50 Lothian Road
Festival Square
Edinburgh, EH3 9WJ
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
1
Bigblu Broadband plc
Company Overview
For the year ended 30 November 2023
Bigblu Broadband plc (AIM: BBB.L), is an in market leading provider of alternative superfast and ultrafast
broadband solutions throughout Australia. BBB delivers a portfolio of superfast and ultrafast wireless broadband
products for consumers and businesses.
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, GEO and LEO, 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 services.
BBB's alternative broadband offerings present a customer experience that is broadly similar to that offered by
wired broadband and the connection can be shared in the normal way with PCs, tablets and smart phones.
*Superfast is defined as broadband speeds in excess of 30Mbps
** Ultrafast is defined as broadband speeds in excess of 100Mbps
2
Bigblu Broadband plc
Strategic Report
Chairman’s Statement
For the year ended 30 November 2023
2023 has been a year of intense focus within the business with like for like revenue growth of 0.3% and adjusted
EBITDA like for like growth of 8.7% and ending the period with 55k customers for continuing operations. During
the period we also, identified and concluded suitable accretive bolt on in Harbour in Australia.
Operationally we also had to adjust the business to the increased Low Earth Orbit competition in Australia as
well as upgrade legacy systems in Skymesh. We continued to reduce costs centrally and announced the
disposal of the Norwegian Operations to a management led buyout team in Norway post period end.
We started the year with the acquisition of the satellite operations of Harbour ISP PTY LTD, a subsidiary of Uniti
Group LTD in Australia. This acquisition was accretive in nature and helped cement our fully owned subsidiary
SkyMesh’s leading position in the marketplace.
At the year-end we retained a 3.1% holding in Quickline post injection of £110m of additional funding by Northleaf
Capital Partners since the date of acquisition by them. Post year end Northleaf invested a further £20m reducing
our percentage holding to 2.8%. Quickline can currently address over 200,000 rural premises with its hybrid
FTTP and FWA infrastructure and has over 10,000 customers.
Following this injection, the 5G and FTTP build programmes are accelerating and, supported by a headcount of
c300, 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 in this rapidly growing
and well-financed alternative network operator. We are delighted for the Quickline team being awarded two
contracts under the government’s £5bn Project Gigabit programme as detailed in the post balance sheet events
note.
In addition, we continued to have excellent support from our main banking partner Santander in the UK who
provides the business with £10m Revolving Credit Facilities and associated banking operations.
The Board remains focused on enhancing shareholder value from the Continuing Group and will consider further
strategic M&A opportunities that are accretive in nature.
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 2024 and beyond, given the strategic plans for the continuing operations.
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.
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, 2022 and 2023, and we will continue to interact with shareholders in a regular
and proactive manner. This year the AGM will be held on 21 June 2024 and such notice of the AGM will be
circulated to shareholders shortly.
3
Bigblu Broadband plc
Strategic Report
Chairman’s Statement
For the year ended 30 November 2023
Finally, I would like to thank Andrew Walwyn who resigned from the Board on 17 May 2024, for his countless
years of hard work and effort, far less delivery, his management team and all the staff in the Group for their
efforts in 2023. 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 2024 with confidence.
Michael Tobin OBE
Chairman
17 May 2024
4
Bigblu Broadband plc
Strategic Report
Chief Executive Report
For the year ended 30 November 2023
Overview
2023 was an important year for the Group as we continued to focus on maximising shareholder value. We have
delivered improved underlying profitability in Australia and have announced the disposal of the Group's
Norwegian operations to a management led team post the end of the financial year. As a result, our remaining
focus is now on our Australian operations and our retained minority interest in Quickline.
Operational Review of Continuing Operations
The last year has seen a hive of activity across the sector generally and the business units more specifically.
We have seen the advancement of Starlink in Australia our only remaining market and are absolutely delighted
to have entered into a distribution agreement with them in December 2023.
-
-
-
Further positive sector momentum includes Satellite communications market’s profile raised in 2023.
Significant mergers and constellation expansions have created satellite network operators with greater
scale, especially in the low-earth orbit (LEO) sector.
Telcos with ambitious, and extremely challenging, goals of delivering communications and digital
services to every corner of the world, will increasingly rely on satellite coverage to close connectivity
gaps in various locations, especially the digital divide where BBB operate.
In Australia, we remain focused on our strategy of organic growth combined with targeting suitable bolt-on
acquisition opportunities as well as considering all options available to BBB to best achieve our value realisation
strategy.
SkyMesh, is the leading Australian satellite broadband service provider, having been named Best Satellite NBN
Provider for the fifth year in succession (2019-2023). SkyMesh has continued to be the market leader in the
satellite broadband market with total market share post the Harbour transaction of 46% of NBNCo Skymuster,
a growth of 7.6% year on year.
SkyMesh now commands a 53% market share of all new orders placed, the fastest growing operator in the GEO
satellite market. Customer numbers at 30 November 2023 were 55.3k (FY22: 51.5k), an increase of 7% on prior
year and includes the customers acquired from Harbour (5.2k).
Increased competition from Starlink in FY23 had an impact on customer numbers mainly during the first half of
the year. SkyMesh worked with its major satellite provider NBNCo to bring uncapped data packages to market
for the first time, which are more affordable, comparable in speed, and better supported than other networks.
From the launch of this product in late 2023, customer growth has returned. An expanded suite of uncapped
data products at varying price points was released on 1 December 2023, which the business expects will further
enhance its growth potential.
During the year, SkyMesh upgraded their legacy systems with an investment of £1.3m. This brings touchless
integration with NBNCo for ordering, provisioning of services and support. The outcome is a more efficient
system that enables customers to be set up online faster than ever. The sales process has been streamlined
and provides the ability to track orders and sales in real time. The system brings upgraded security and flexibility
to integrate with future vendors. This was a large exercise and resulted in a number of teething challenges. We
are now seeing a more stable platform and have invested in additional IT resources to drive future developments.
Further acquisition opportunities and new product opportunities are emerging as SkyMesh heads into 2024 with
the potential for the product offering to expand further underpinning future growth in customer numbers.
Revenue is underpinned with a high percentage (c.93%) of recurring revenue attached to contracts. We remain
confident in our ability to deliver further returns for shareholders from our operations in Australia together with
the remaining equity stake in Quickline. As we enter the new financial year, there are opportunities to deliver
5
Bigblu Broadband plc
Strategic Report
Chief Executive Report (continued)
For the year ended 30 November 2023
improved shareholder value as we continue to support customers unserved and underserved in the digital divide,
whilst at the same time improving our product range thereby reducing churn.
The Board's focus will remain on both organic growth with our network partners, and suitable accretive bolt on
acquisitions that can accelerate the Company's presence as well as scaling the Australian business. In addition,
the Board continues to explore all options to realise value for BBB shareholders from SkyMesh, which could
include an MBO supported by private equity, trade sale or ASX listing of SkyMesh.
Board Changes
As part of the acquisition of the Norwegian Operations by local management, Andrew Walwyn is also
participating in the Buy Out. As a result, Andrew Walwyn has resigned with immediate effect from his position
as Executive CEO within the plc to prevent any conflicts perceived or otherwise arising. Andrew remains a major
shareholder of BBB having founded the business in 2008 and listed the business in 2015.
Andrew has undertaken to support the Board as required whilst it executes its strategy of realising value for
shareholders.
Frank Waters has become CEO of the plc in addition to his CFO responsibilities, whilst the Board of BBB
continues to execute the value realisation strategy and will be supported by the new CFO in Australia Ray
Vaughan who joined on 1 April 2024. Ray will be responsible for all financial aspects of Skymesh finances and
support Frank Waters with plc matters as required.
Post Balance Sheet Events
We highlight the following post balance sheet events:
Quickline Contract Wins
Quickline has been awarded two contracts under the government’s £5bn Project Gigabit programme. The
contracts will subsidise the rollout of a full fibre network to more than 60,000 hard-to-reach rural homes and
businesses across the parts of Yorkshire which have been left behind by commercial rollouts. The contracts
have been secured by Quickline following competitive public procurement processes and totals £104m of
government subsidy. Quickline will make further private investment alongside Project Gigabit to roll out its full
fibre network to over 200,000 premises. Project Gigabit is the government-backed programme to connect hard-
to-reach areas which, without government intervention, would miss out on fast and reliable, gigabit capable
broadband. The rollout of Project Gigabit is overseen by Building Digital UK (BDUK) – an executive agency of
the Department for Science, Innovation and Technology.
Starlink Distribution Agreement
We were delighted to sign a distribution contract with Starlink in December 2023 to provide high-speed internet
to business and small office / home office workers. BBB plc invested £2m in buying stock in advance to support
future orders. This, alongside the One Web contract allows BBB to offer customers an extended suite of products
covering all their needs.
Norway disposal
We have separately today also announced the disposal of our Norwegian operations for consideration of £1 to
a team led by local management and Andrew Walwyn. This business has faced meaningful headwinds over the
last few years and the Board has actively been seeking to find an exit for this business, including the appointment
of external advisors to try and find appropriate buyers for these operations. The management buyout offered the
most realistic and quickest exit for the Group without having to potentially incur further costs in the region and
the Board believes that this transaction is in the best interests of shareholders.
6
Bigblu Broadband plc
Strategic Report
Chief Executive Report (continued)
For the year ended 30 November 2023
Current Trading
The Group has positioned itself at the forefront of the alternative super-fast and ultrafast broadband industry in
Australia. The Group’s product portfolio and expanding routes to market mean that it remains one of the most
recognised companies in its sector in Australia. Underlying trading in Australia in the first few months is in line
with prior year and the planned migration of customers to the new tariffs, whilst likely to result in a far higher
Customer Lifetime Value will potentially impact short term EBITDA and cash, however the business will benefit
from the strong visibility afforded by the high percentage of recurring revenues. At the same time, we are
progressing with our systems efficiencies. The disposal of the Norwegian business therefore allows us to focus
on the remaining operating unit in Australia. Prior to disposal the trading conditions in the Norwegian operations
remained challenging as the business continues to pivot into a low capex business. We have enacted significant
cost savings at the plc level following the disposal as we seek to realise value in Australia.
Frank Water
Chief Executive Officer
17 May 2024
7
Bigblu Broadband plc
Strategic Report
Financial Review
For the year ended 30 November 2023
Total results for the Continuing and Discontinued operations
Total Group revenue including recurring airtime, equipment, installation sales, one off IP sales, network support
and the Harbour acquisition was £30.1m. (FY22: £31.2m) of which the negative impact of currency movements,
translating Skymesh trading currency in Australian Dollars to Sterling reporting currency of BBB, was £1.4m.
Recurring airtime revenue (revenue generated from the Company's broadband airtime) which is typically linked
to contracts, was £28.0m representing 93% of total revenue (FY22: 93%).
Gross profit margins decreased marginally to 41.2% in FY23 (FY22: 42.5%), due to planned product mix
changes net of additional income earned in the period. This is an area of constant focus in the business working
with our network partners and at the same time as providing the most suitable products to our customers.
Overheads, before items identified as exceptional in nature, reduced to £11.2m (FY22: £11.7m) representing
37.2% of revenue (FY22: 37.5%) mainly due to lower headcount costs from the re-organisation program of
£1.4m, lower depreciation due to the assets in the Norwegian business being written off in FY22 of £0.7m,
reduced marketing cost of £0.1m and lower IT costs of £0.2m, partially offset by higher amortisation in Australia
due to the Harbour acquisition of £1.0m and higher impairment of Fixed Assets of £0.6m in the period.
Consequently, adjusted EBITDA for the period was £5.9m (FY22: £5.1m) growth of 15.6% and representing an
improved adjusted EBITDA margin of 20.1% (FY22: 16.3%).
Depreciation, excluding ‘right of use assets’, decreased to £1.0m in FY23 from £2.3m in FY22 in line with the
reduced scale of the continuing operations but reflecting increased investment in the Nordic region.
Amortisation increased to £1.7m in FY23 from £0.7m in FY22 due to the amortisation on the customer base
acquired from Harbour in the year. There was also an impairment of £2.1m relating to the write down of the
goodwill associated with the Norwegian business.
Finance costs were £0.3m in FY23 (up £0.2m on FY22 (FY22: £0.1m), relating to the revolving credit facility
(RCF) with Santander.
Financial Review - Continuing Operations
We ended the year with a customer base of 55.3k (FY22: 51.5k) despite contending with a challenging market
environment in Australia with Starlink promotional activity and a massive systems migration. In addition, there
has been a negative currency impact of £1.4m on revenue and £0.4m on EBITDA in the year.
Within the Australian market, we focused on the integration of bases acquired, the go live with new systems as
well as working with our network partners to migrate as many customers as possible to new NBNCo tariffs with
c10k migrated to more suitable products which the business believes should help to reduce churn in the future.
In terms of year end customer mix the FY23 closing base of 55.3k customers is split as follows:
•
•
Satellite 49.1k (FY22: 44.0k)
Fixed Wireless 6.2k (FY22: 7.5k)
8
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Financial Review - Continuing Operations continued
Total revenue including recurring airtime, equipment, installation sales, network support other income and the
Harbour acquisition decreased by £1.3m (4%) to £25.9m (FY22: £27.2m) of which the negative impact of
currency movements was £1.4m. Total like-for-like revenue for the Continuing Group in the period was £27.3m,
representing 0.3% growth (FY22: increase 4%).
Recurring revenue, defined as revenue typically generated from the Group’s broadband airtime contracts, which
is typically linked to contracts and monthly subscriptions, was £23.9m in the period, representing 93% of total
continuing revenue (FY22: 93%).
ARPU, calculated by dividing total revenues from all sources by the average customer base, in 2023 was £39.80
per month (FY22: £40.44), down on FY22 by 2% due to the impact of the currency translation, as well as specific
switching of customers to more appropriate packages with a higher customer lifetime value CLV. CLV is
calculated by comparing the Present Value of a new customer (considering ARPU, Churn and Margin) with the
net costs of customer acquisition (considering up front revenue less equipment, shipping, installation and
marketing costs).
Revenue in satellite was £21.9m, down on prior year by 3.4% (FY22: £22.7m) due in the main to plan switching
in Australia offset by the satellite base acquired from Harbour, offset by currency impact of £1.4m. Revenue in
fixed wireless was £3.5m, down on prior year by 8% (FY22: £3.8m). PLC added £0.5m (FY22: £0.7m) from
services related revenue.
Gross profit margins reduced marginally to 37% in FY23 (FY22: 38%), due to planned product mix changes.
This is an area of constant focus in the business working with our network partners and at the same time as
providing the most suitable products to our customers.
Distribution and Administrative Expenses, pre-exceptional costs, increased by £0.1m to £7.4m (FY22: £7.3m)
due to increased underlying costs covering headcount costs, marketing, and IT costs, as well as increased costs
combining depreciation, impairment of fixed assets and amortisation on the customer acquisition from Clear and
Harbour.
Consequently, adjusted EBITDA for the period from our continuing operations was £4.5m (FY22: £4.1m) a
growth of 8.7% and representing an improved adjusted EBITDA margin of 17.2% (FY22: 15.1%).
Items identified as exceptional in nature, increased to £3.9m (FY22: £2.6m) representing 15% of revenue (FY22:
9%) due to specific deal related and operational exceptional costs primarily associated with the reorganisations
in the Norwegian and Central Operations.
Depreciation, including ‘right of use assets’, remained unchanged at £0.6m in FY23 from £0.6m in FY22.
Amortisation increased to £1.5m in FY23 from £0.4m in FY22 due to the amortisation of the customer base
acquired from Uniti (FY22) and Harbour (FY23) in the year which will be written off over a 2-year period from
acquisition. In addition, the assets acquired through the Clear acquisition were impaired by £0.1m.
Finance costs were £0.2m in FY23 relating to the RCF facility in the period compared with £0.1m in FY22.
Consequently, Adjusted PAT (adjusted for exceptional items, impairment and amortisation) for the period was
£4.2m (FY22: £3.2m) growth of 31.4% and representing an improved adjusted PAT margin of 16.0% (FY22:
11.6%).
The focus of the Board now turns to creating shareholder value from the remaining business unit being our
Australian operations (SkyMesh Pty Limited) through organic growth and the possibility of accretive acquisitions
and our retained interest in Quickline.
The financial review will therefore focus primarily on the performance of the continuing business unit which is
operational.
9
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
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
2023
2022
Description
2023 performance
Customer Base
55.3k
51.5k
3.6k
4.4K
Underlying
Customer Net
Organic
Connections
Represents
total gross organic
connections plus acquisitions, less
disposals, less lost customers (churn)
and base management.
Represents gross connections in the
period less lost customers (churn) in
Includes M&A and
the period.
excludes exceptional churn.
Gross
Underlying
Churn
32%
30%
of
subscribers
Gross underlying churn defined as the
number
who
their service as a
discontinue
total
percentage of
number of subscribers within
the
period and excludes exceptional
churn.
the average
ARPU
£39.80
£40.44 Calculated by dividing total revenues
from all sources by the average
customer base
Revenue
£25.9m
£27.2m Revenue
from all
includes sales
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 that
skew
numbers. Business
disposed of in the period are excluded
from the calculation.
the
7.4%
Harbour acquisition.
increase
reflecting
the
Customer
Underlying
growth
reduced year on year due in the
main to Starlink in Australia offset to
a degree with
the Harbour
acquisition.
arise
where
The focus during the period was on
switchers with c4k during the period.
Switchers
we
proactively migrate a customer to a
more appropriate tariff during the
period.
Churn rate of 32.3% (FY22: 30%) in
Australia following pressure from
Starlink during the year.
increased
to £40.54
Lower by 1.6% due in the main to
currency translation. On a LFL basis
ARPU
in
current year.
Total Revenue decreased by 4%.
On a constant currency basis this
would show an increase on FY22 of
0.3%.
10
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
KPI
2023
2022
Description
2023 performance
Adjusted EBITDA increase of
8.7% (£0.4m) driven in the
main by reduced overheads
across the Group.
following
EBITDA Margin of 17% (FY22:
15%)
reduced
marketing spend of £0.1m and
£0.1m
reduced headcount
costs.
Adjusted operating cash inflow
was £5.3m (FY22: £0.7m), an
improvement of £4.6m YOY,
due
increased EBITDA
(£0.4m), lower forex and non-
cash charge
(£0.4m), and
capital
working
better
management year on year
(£3.8m).
to
Adjusted free cash inflow in the
year was £4.7m (FY22: £0.3m
outflow), an improvement of
£5.0m YOY. Operating cash
inflow improved £4.6m, lower
capital expenditure of £0.3m at
£49k (FY22: £0.4m), higher
interest of £0.2m
(FY22:
£0.1m), offset by decreased tax
instalments of £0.3m (FY22:
£0.5m)
Increased post improved
EBITDA and lower tax charge.
Adjusted
EBITDA
£4.5m
£4.1m
£5.3m
£0.7m
Adjusted
Operating
Cash Flow –
Continuing
Operations
£4.7m
(£0.3m)
Adjusted Free
Cash Flow –
Continuing
Operations
Adjusted EPS
7.1p
5.4p
Earnings before
share based
payments, depreciation, intangible
amortisation,
costs,
acquisition costs, one-off employee
related costs, deal related costs and
start-up costs is the measure of the
Group’s operating performance.
impairment
for Exceptional
flow
Adjusted Operating cash
the amount of cash
to
relates
generated
the Group's
from
operating activities and is calculated
as follows: Profit/(Loss) before Tax
adjusted
items,
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.
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.
11
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Total customers at the period end including in-flight customers for our Australian operations were 55.3k (FY22:
51.5k). During the year we delivered 3.8k net adds (FY22: 4.4k).
Opening base
Switched out customers
Switched in customers
Gross Adds
Acquisition
Churn
Underlying Net Growth
Closing Base
FY23
000
FY22
000
51.5
(4.0)
4.0
15.9
5.2
(17.3)
3.8
55.3
47.1
(9.0)
9.0
16.9
2.2
(14.7)
4.4
51.5
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 32% in FY23
(FY22: 30%) due in the main to the launch of Starlink in the Australian market.
In the first three months of FY24, underlying churn has slightly reduced to 31%, and importantly we are starting
to roll out next generation products in Australia.
12
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Continuing Operations analysis
A reconciliation of the adjusted EBITDA to adjusted PAT of £4.2m (FY22: £3.2m profit) is shown below. This is
a non-GAAP alternative performance measure.
Adjusted EBITDA
Depreciation
Amortisation
Impairment of Intangible Assets
Adjusted EBIT
Share based payments
Continuing Operations operating profit – pre-
exceptional items
Exceptional items relating to M&A and
restructuring activities
Continuing Operations Statutory operating
(loss) / profit – post exceptional items
Adjusted EBIT
Interest charge
Tax credit /(charge)
Impairment of Intangible and Fixed Assets
Amortisation
Adjusted PAT
1
2
3
3
4
5
6
7
7
2023
£000
4,459
(597)
(1,515)
(147)
2,200
-
2,200
(3,929)
2022
£000
4,102
(561)
(444)
-
3,097
(309)
2,788
(2,271)
(1,729)
517
2,200
(238)
529
147
1,515
4,153
3,097
(64)
(328)
-
444
3,149
13
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
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 8.7% to £4.5m (FY22: £4.1m).
2. Total depreciation was broadly unchanged at £0.6m in FY23 from £0.6m in FY22 due to the weaker
AUD offsetting a small increase reflecting the full year effect of FY22 purchases.
3. Amortisation increased to £1.5m from £0.4m in FY22 as a result of the acquisition of the Uniti customer
base. During the year we undertook a full review of the carrying value of Goodwill, with the review
resulting in impairment charges of £0.1m for the IP of the Clear customers of SkyMesh.
4. The Group incurred expenses in the period that are considered exceptional in nature and therefore
appropriate to identify. These comprise:
a. £1.2m (FY22: £1.2m) of acquisition, deal, legal and other costs relating to M&A (Primarily the
acquisition of Harbour in Australia) and restructuring activities during the period. These costs
comprise mainly professional and legal fees and includes an apportionment of staff and
management time spent specifically on M&A projects
b. £0.8m (FY22: £0.4m) employee restructuring costs in the UK and Australia
c. £1.3m (FY22: £0.3m) development costs in the period primarily for the new Pathfinder system
in Australia and APIs with key suppliers, that do not meet the criteria for intangible asset
capitalisation.
d. £0.6m (FY22: £0.3m) relating to various non-operational costs including one-off trademark
licensing, payment provider historical balances written off and Commercial and Financial due
diligence.
5. The interest charge in the year of £0.2m (FY22: £0.1m) relates to the RCF (£0.2m)
6. The tax credit of £0.5m (FY22: charge £0.3m) relates to our Australia business where amortisation of
the customer base goodwill, increased depreciation and increased development costs resulted in a
taxable loss.
7. Adjustments
a.
b. Amortisation of £1.5m (FY22: £0.4m) following the acquisitions of the Uniti and Clear customer
Impairment amortisation charge relates to SkyMesh IP £0.1m (FY22: Nil).
bases being amortised over two years.
14
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Customer Base, Revenue, Adjusted EBITDA in FY23 and the comparative period for Continuing Group is
segmented by the following categories as follows:
2023
Number
000’s
Customer Base
2022
%
Number
000’s
Revenue
2023
2022
Adjusted EBITDA
2023
2022
%
£m
£m
%
£m
£m
%
Australia
Central
Revenue and
Costs1
55.3
100%
51.5
100%
25.4
26.5
(4%)
5.2
5.0
4%
-
-
-
0.5
0.7
(22%)
(0.7)
(0.9)
16%
Total
55.3
100%
51.5
100%
25.9
27.2
(4%)
4.5
4.1
9%
1 Central revenue includes recharges for services and central costs include finance, IT, HR and plc costs.
Customer Connections by Technology
2023
Satellite
000’s
2023
Fixed
Wireless/5G
000’s
2023
Total
000’s
2022
Satellite
000’s
%
2022
Fixed
Wireless/5G
000’s
2022
Total
000’s
%
Australia
49.1
6.2
55.3
100%
44.0
7.5
51.5
100%
Total
49.1
6.2
55.3
100%
44.0
7.5
51.5
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 Australia
a. There was customer net growth of 3.8k over the course of the year, including the c5.2k from the
Harbour acquisition.
b. During the year there were a number of customers switching contracts (c.4k)
c. The reduction in revenue of £1.3m was a reflection of the currency movement on translation
and the increased churn, the acquisition of customers from Harbour, and a reduced ARPU from
£40.44 to £39.80. Like for like ARPU would be £40.53, a slight increase.
Importantly, EBITDA improved by 9% following continued cost efficiencies across the company.
d.
2 PLC
a. Revenue was down on prior year at £0.5m due to reduced invoiced support services.
b. With lower costs, following the rationalisation this resulted in EBITDA losses improving by 45%
at £0.5m.
15
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Cashflow performance – Continuing operations
Adjusted Free Cash Flow in the year, before exceptional costs and M&A activities undertaken by the Group,
was an inflow of £4.7m (FY22: outflow £0.3m). This reflects the improvement in operating cashflow of £4.6m,
lower capital expenditure by (£0.3m) at £0.1m (FY22: £0.4m) and tax payments lower by (£0.3m), offset by
interest higher by £0.2m, at £0.5m (FY22: £0.6m).
This is a non-GAAP alternative performance measure.
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 / (outflow) 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
Financing activities
Decrease in cash balances
1
2
3
4
5
6
7
8
9
2023
£000
4,459
544
262
5,265
(506)
(49)
4,710
2022
£000
4,102
(3,309)
(99)
694
(603)
(374)
(283)
(3,929)
(2,271)
781
(2,554)
(2,693)
1,632
(2)
1,856
(58)
53
(137)
(1,006)
16
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
1) Underlying movement in working capital was an inflow of £0.5m (FY22: outflow £3.3m). This reflects
the inflow of receipts from sale of inventory £1.0m, and increased Creditors payments (£0.5m).
2) Forex and non-cash represent a movement in the year of £0.3m (FY22: £0.1m). This reflects the
currency revaluation of key balance sheet accounts using the closing rate as at 30 November of a charge
£0.3m (FY22: £0.2m) and other non-cash movements resulting in a charge of Nil (FY22: Credit £0.1m).
3) This resulted in an adjusted operating cash flow before Interest, Tax, Capital expenditure and
Exceptional items of £5.3m inflow (FY22: £0.7m inflow), and an adjusted operating cash flow to EBITDA
conversion of 118% (FY22: positive 17%).
4) Tax and interest paid was £0.5m (FY22: £0.6m) on a like-for-like basis. This covers interest on the loan
facility and leases (£0.2m) and monthly taxation paid by our Australian business (£0.3m). Final
corporation tax calculations for the financial year show year-on-year tax savings in excess of £0.5m.
5) Purchases of assets in FY23 were £0.1m (FY22: £0.4m). These purchases were primarily office related
costs in Australia. Note that asset purchases do not include the capitalized value of new leases of ROU
assets, which are non-cash items.
6) Exceptional items relating to M&A, finance raising and restructuring costs of £3.9m (FY22: £2.3m).
7)
In FY23 investing activities include the acquisition of customers and assets of Uniti by SkyMesh £2.5m
plus a deferred payment of £0.3m in respect of Clear Networks less £0.1m proceeds of asset sales
(FY22: acquisition of customers and assets of Clear Networks £1.2m).
8) The net movement of cash held in the discontinued operations during the year.
9) The inflow in the year of £1.9m comprises the loan finance of £2.1m offset by lease principal payments
of £0.2m (FY22: £0.2m lease principal payments).
17
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Adjusted net cash reconciliation
This is a non-GAAP alternative performance measure
Opening Net Cash
(Loss) / profit after tax from Continuing operations
Interest charge
Depreciation
Impairment of Intangible and Fixed Assets
Amortisation
Tax (credit) / charge
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/(outflow) 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
Financing activities
Movement in Cash from Continuing operations
(Outflow) / inflow of cash from Discontinued operations
Movement in Net Cash
Increase in Debt
Closing Net Cash inclusive of Escrow arrangements (£0.8m)
Cash split
Net cash and cash equivalents
Discontinued operations cash / cash equivalents including deposits
Closing net cash
18
2023
£000
4,195
(1,438)
238
597
147
1,515
(529)
-
3,929
4,459
262
544
5,265
(209)
(297)
4,759
(49)
4,710
2022
£000
5,201
125
64
561
-
444
328
309
2,271
4,102
(99)
(3,309)
694
(64)
(539)
91
(374)
(283)
(3,929)
(2,271)
781
(2,554)
(2,693)
1,856
(56)
(2)
(58)
(2,100)
2,037
1,632
(137)
(1,059)
53
(1,006)
-
4,195
1,532
4,195
505
-
2,037
4,195
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Cash and net debt for the overall Group is summarised as follows:
Opening Net Cash
Increase in loans: offset in financing activities
Facilities utilised
Cash inflow / (outflow) from operating activities
Cash (outflow) / inflow generated in investing activities
Cash inflow / (outflow) from financing activities
Movement in Net Cash
Closing Net Cash
Composition of closing net debt
Cash and cash equivalents
Cash held in escrow – restricted cash
Gross cash and cash Equivalents
Gross cash and cash equivalents in disposal group
Bank loans
Net Cash
Net Cash
Net cash and cash equivalents
Discontinued operations cash / cash equivalents including
deposits
2023
£000
4,195
(2,100)
1,660
(3,166)
1,448
(2,158)
2,037
2,782
850
3,632
505
(2,100)
2,037
1,532
505
2022
£000
5,201
-
(512)
200
(694)
(1,006)
4,195
4,195
-
4,195
-
-
4,195
4,195
-
Adjusted net cash
2,037
4,195
Net Cash and cash equivalents / Adjusted EBITDA
0.34x
1.02x
Net cash reduced from £4.2m in 2022 to a net cash position of £1.5m, a reduction of £2.7m in the year, as
detailed in the net cash reconciliation above. With discontinued cash this results in an adjusted net cash position
of £2.0m.
At the year-end an amount of £0.9m within the adjusted net cash balance was held in Escrow and received on
1 December 2023 (FY 22: Nil).
The table above excludes the lease liabilities of £0.1m (FY22: £1.4m). Including this amount would give a total
adjusted net cash of £1.4m (FY22: Adjusted net cash £2.8m) and a ratio of adjusted net cash to adjusted Group
EBITDA before IFRS 16 of 0.31x (FY22: Adjusted net cash 0.54x)
19
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Consolidated Statement of Financial Position
Fixed Assets reduced in the year to £0.4m (FY22: £2.9m), following the purchase or lease of new fixed assets
(£0.8m), less disposals (£0.3m), and adjusted for depreciation provided in the year (£1.4m) and negative foreign
exchange movements (£0.2m) together with the reclassification of £1.4m of assets as held for sale at year end..
Intangible Assets decreased to £5.6m (FY22: £7.4m) due to the contracts acquired from Uniti £2.5m less
amortization of £1.7m together with impairment of goodwill and IP values by £1.9m following a review in the
year. Negative foreign exchange movements accounted for a (£0.4m) translation adjustment. £0.4m carrying
value was reclassified as assets held for sale.
Working Capital
Inventory days decreased to 16 days (FY22: 24 days) as stock holdings in Australia were reduced from the
planned high level in FY22 by £0.4m. Reclassification of £0.6m as held for sale resulted in a balance of £0.1m
(FY22: £1.1m). Trade Debtor days increased to 14 days (FY22: 9 days) with a £0.7m increase in the closing
Trade Debtors year on year. Trade Creditor days decreased to 70 days (FY22: 77 days) due to alignment of
terms for a key network provider in Australia.
Earnings per share
Basic earnings per share
Diluted earnings per share
Non-GAAP Adjusted basic earnings per share
Basic EPS
2023
2022
(8.0p)
(8.0p)
7.1p
(5.0p)
(5.0p)
5.4p
Basic EPS was a loss of 8.0p per share in 2023, increasing from a loss of 5.0p in 2022, largely due to increased
amortisation and exceptional costs.
Diluted EPS
Diluted EPS is a calculation used to gauge the quality of a company’s earnings per share (EPS) if all share
options are exercised. Diluted EPS was a loss of 8.0p per share in 2023 from a loss of 5.0p in 2022.
Basic adjusted earnings per share
Adjusted basic EPS was a profit of 7.1p per share in FY23 from a profit of 5.4p in FY22.
20
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
Accounting standards
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS), as endorsed and adopted for use in the UK. 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 (2022: £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 because 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
•
•
•
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
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 and working with
suppliers on terms particularly our network partners.
21
Bigblu Broadband plc
Strategic Report
Financial Review (continued)
For the year ended 30 November 2023
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 increase in demand in Australia. Accordingly, we continue to adopt the going
concern basis in preparing these results.
On behalf of the Board
Frank Waters
Chief Executive Officer
17 May 2024
22
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties
For the year ended 30 November 2023
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 29.
Risk
Description
Mitigation
Risk
Rating
Medium 9
The Board is in regular dialogue with
network providers to ensure appropriate
capacity and products exists in Australia
and Norway 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 Australia and
Norway, continues to prosper. We also
work closely with the Network operators
on integrations.
The Board works 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.
Medium 12
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 last year.
Newer satellites in 2023 with steerable
beams and a wider
list of satellite
providers should reduce the risk.
Dependence
on satellite
owners,
satellite
infrastructure
and 5G
providers for
capacity and
key contract
terms
The Group is dependent on its ability
to purchase broadband capacity from
satellite and 5G owners in Australia
and Norway as well as having the
ability to integrate seamlessly into
their systems. 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
restrictive covenants
not contain
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
and
governments
consequently
its
its
operational results and its prospects.
In the event of the failure of a satellite
as was the case in the Cyber-attack in
FY22, 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.
revenues,
partners
Dependence
on satellite
infrastructure
23
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2023
Risk
Description
Mitigation
Acquisitions
The Group believes there is an
opportunity to continue acquisition of
customers by way of accretive bolt-
ons in existing markets.
in
the
terms
The Group
to conduct
intends
appropriate due diligence in respect
of acquisition targets and to identify
any material issues that may affect
the decision to proceed with the
purchase or give cause for concern
post-acquisition
of
performance or liabilities identified
subsequent. During
due
diligence process the Group is only
able to rely on the information that is
available to it. That information may
not be accurate or remain accurate
during the due diligence process.
Any of these outcomes may have a
the
material adverse effect on
Group’s
financial
condition, or results of operations.
There may be competition
from
existing and emerging alternative
technologies, such as Starlink, fibre
to the premises, improved versions
of the wide area radio network or
In
mesh radio
the
technologies
that
event
become widely
the
Group’s subscriber base, revenues,
results
and
adversely
prospects may
affected.
technologies.
operations
business,
available,
such
from
be
Competition from
existing/emerging
alternative
technologies
is mitigated as
Roll up strategies are inherently risky.
This risk
far as
possible by working closely with
teams,
management
existing
professional advisors and network
operators to reduce the risks during
the acquisition stage.
In addition, dedicated resources are
deployed internally to support the due
diligence process and to on-board the
businesses into the Group and further
system
enhance our operating
capabilities to reduce on going risk.
it by
to mitigate
The Board recognises this risk and
seeks
regular
dialogue in the marketplace with other
the
solution providers
Group’s
adjusted
offering
accordingly
the market
to meet
demands and changing landscape as
evidenced by the PBSE with Starlink.
to ensure
is
indicate
announcements
in
Government
Australia
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.
Government
policy and
increased
investment in
fibre roll-out
the
Given
importance of digital
connectivity to the economy, it may
be the case that many governments
further invest in fibre roll-out thus
reducing the market size for satellite
and wireless broadband.
24
Risk
Rating
Low 3
Medium 9
Medium 6
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2023
Risk
Description
Mitigation
System reliance
and
sustained
Continued
testing of
the
development and
existing systems
is undertaken
regularly. Enhancements are rolled
out during the course of the year to
reduce risks.
Group
believes
The
the
proprietary technology platform,
Pathfinder, built on Microsoft
technology is a key contributor to
the operational success of the
business as well as the more
localised systems. In the event of
a system failure of the platform or
any other technology or system
operated by a third-party, short-
term operations would be affected
adversely.
Dependence on key
executives
The performance of the Group will
depend heavily on its ability to
retain the services of the Board
and to recruit, motivate and retain
further suitably skilled personnel.
The loss of the services of key
individuals may have an adverse
effect on the business, operations,
customer
and
results.
relationships
is scope
the management
The Board will continue to ensure
that
team are
appropriately incentivised and that
there
to appropriately
incentivise new key personnel
where required. The Group operates
various share option schemes and
management incentive plans which
enable employees to benefit from
continued growth and delivering
shareholder returns. It also ensures
that the management team, staff
and shareholders objectives are
aligned.
Risk
Rating
Medium 9
Medium 8
Fraud, including cyber
attacks
As a provider of broadband
solutions, the Group is a potential
target and products may have
vulnerabilities
be
targeted by attacks specifically
designed to disrupt the Group’s
business and harm its reputation.
that may
technical staff
The Group have
specialist
outside
including
on
who
contractors
investigation and mitigation of risks
related to fraud and cyber-attacks.
focus
Medium 9
it
systems,
If an actual or perceived breach of
security occurs in the Group’s
internal
could
the markets
adversely affect
perception of the Group’s products
or internal control systems. In
addition, a security breach could
affect the Group’s ability to provide
support for customers.
25
Biannual review undertaken of key risk
areas by consultants as appropriate
Risk
Rating
Medium 6
This continues to be monitored by the
Board with our professional advisors,
satellite and wireless operators and
insurance specialists.
Medium 6
Medium 6
The Group monitors foreign exchange
regularly and, when a
exposure
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.
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2023
Risk
Description
Mitigation
Ineffective
Control
environment
Force
majeure
Foreign
Exchange
Rate
Volatility
or
damaging
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
destroying
satellites, labour unrest, civil disorder,
war, subversive activities or sabotage,
fires,
floods, explosions or other
catastrophes, epidemics, or quarantine
restrictions.
The geographic spread of the Group
results are
financial
means
affected by movements
foreign
exchange rates, with only 2% of the
revenue currently being
Group’s
risk
generated
presented by currency fluctuations may
affect business forecasting and create
volatility
results and cash
holdings.
in Sterling. The
that
the
in
in
26
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2023
Risk
Description
Mitigation
This continues to be monitored
by
our
the Board with
professional advisors.
General
economic
conditions
Market conditions, particularly
those affecting
telecoms and technology companies may affect
the ultimate value of the Group’s share price,
regardless of operating performance. The Group
could be affected by unforeseen events outside its
control, including, natural disaster, terrorist attacks
and political unrest and government legislation or
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.
Risk
Rating
Medium 9
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)
27
Bigblu Broadband plc
Strategic Report
Principal Risks and Uncertainties (continued)
For the year ended 30 November 2023
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 17 May 2024 and was signed on its behalf
by:
Frank Waters
Chief Executive Officer
17 May 2024
28
Bigblu Broadband plc
Strategic Report
Section 172 (1) Statement
For the year ended 30 November 2023
In accordance with section 172 of the Companies Act 2006 each of our directors acts in the way that they
consider, in good faith, would most likely promote the success of the Group for the benefit of its members as a
whole.
Consequences of any decisions in the longer-term
• interests of our colleagues
• need to foster the Group’s business relationships with suppliers, customers and other key stakeholders
• impact of the Group’s operations on communities and the environment
• desirability of the Group maintaining a reputation for high standards of business conduct
• need to act fairly as between members of the Group.
The directors take into account the views and interests of a wider set of stakeholders, and you can find out more
about how the Group engages with its stakeholders below on pages 43, 44 and 53. 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?
The Board will sometimes engage directly with stakeholders on certain issues such as remuneration schemes,
strategic direction, investment and fundraising issues. The Board considers information from across the
organisation to help it understand the impact of the Group’s operations, and the interests and views of our key
stakeholders in maximising shareholder value. It also reviews strategy, financial and operational performance,
as well as information covering areas such as key risks, and legal and regulatory compliance. As a result of
these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which
enable the directors to comply with their legal duty under section 172 of the Companies Act 2006. For details on
how the Board operates and the way in which the Board and its committees reach decisions, including the
matters we discussed during the year, see pages 42 to 52.
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.
29
Bigblu Broadband plc
Strategic Report
Section 172 (1) Statement (continued)
For the year ended 30 November 2023
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
(independent consultant) and our NOMAD liaised with various stakeholders including the Executive Committee
and all non-executive directors to understand their views of the remuneration arrangements of the Group and
the alignment of remuneration to our strategy and priorities over the short and 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 Disposals, 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. In particular the Management Incentive Plan launched in
2018 was required under the terms to be reviewed in the period. No changes were made during the period,
30
Bigblu Broadband plc
Governance
Directors’ Report
For the year ended 30 November 2023
The Directors present their report together with the audited financial statements for the year ended 30 November
2023.
Results and dividends
The results include those of BBB PLC and its subsidiaries for the full year including continued and discontinued
activities and are set out in the financial statements on pages 73 to 114.
The Directors do not recommend the payment of a final dividend for the financial year ended 30 November 2023.
Directors and their interests
The Directors who served during the year are set out below, together with their beneficial interests in the ordinary
shares of the Group. Biographical details are included on pages 38 to 40.
Appointed
Michael Tobin
Andrew Walwyn1
Frank Waters
Paul Howard2
Christopher Mills4
Philip Moses3
29 Sept 2015
12 May 2015
12 May 2015
29 Sept 2015
23 May 2018
21 May 2020
2023
Ordinary
shares of
15p each
489,823
3,320,553
325,090
216,243
258,334
10,000
2023
Share
options
-
215,815
218,324
66,666
-
-
2022
Ordinary
shares of
15p each
489,823
3,294,004
325,090
149,577
258,334
-
2022
Share
options
-
215,815
218,324
133,333
-
-
Total
4,620,043
500,805
4,516,828
567,472
1 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.
2 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.
3 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.
4 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 500,805 Share options vested but remaining unexercised.
31
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2023
Directors and their interests (continued)
Directors’ insurance and indemnities
The Group maintains directors’ and officers’ liability insurance which gives appropriate cover for any legal action
brought against its directors. In accordance with section 236 of the Companies Act 2006, qualifying third- party
indemnity provisions are in place for the directors in respect of liabilities incurred as a result of their office, to the
extent permitted by law. Both the insurance and indemnities applied throughout the financial year ended 30
November 2023 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 Chief Executive Officer and other members of staff have been or may be granted share options.
As explained in the Company’s 6 September 2021 circular to shareholders, adjustments were made to all options
granted under the above schemes that were outstanding at the time the return of value detailed in that document
became effective. In particular, the exercise price payable under those options was reduced by 45 pence per
share (being an amount equal to the return of value).
Details of the options that have been granted to Directors under the EMI and unapproved schemes and which
were outstanding during the year to 30 November 2023, are as follows:
Director
Scheme
Date of
grant
No. of
shares
under
option at 30
November
2022
Exercised
during the
year
No. of shares
under option
at 30
November
2023
Exercise price
(pence) per
share at 30
November 2023
(or date of
exercise if
earlier)2
Normal
expiry date
Andrew
Walwyn
EMI
21/12/16
51,942
Frank Waters
EMI
21/12/16
217
Frank Waters Unapproved
21/12/16
86,450
-
-
-
51,942
217
86,450
Paul Howard1 Unapproved
30/03/16
66,666
66,666
-
Paul Howard
Unapproved
21/12/16
66,666
-
66,666
69.45
69.45
69.45
33.75
69.45
21/12/26
21/12/26
21/12/26
-
21/12/26
Total
271,941
66,666
205,275
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.
32
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2023
Notes:
(1)
(2)
All options included in the above table were capable of being exercised in full throughout the year to 30
November 2023 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.
Directors and their interests (continued)
Following consultation with a number of shareholders and as highlighted in previous reports, the Group has
established a Long-Term Incentive Plan (“LTIP”) and more recently a Management Incentive Plan, pursuant to
which the Chief Executive Officer and other members of staff have been or may be granted awards. There were
no awards made under the existing LTIP arrangements in FY23. 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.
33
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2023
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 2023, are as follows:
Director
Scheme
Date of
grant
No. of
shares
under
option at 30
November
2022
Exercised
during
the year
Lapsed
during
the year1
Andrew
Walwyn
Andrew
Walwyn
LTIP
30/05/18
99,359
LTIP
28/10/19
64,514
Frank Waters
LTIP
30/05/18
79,826
Frank Waters
LTIP
28/10/19
51,832
295,531
-
-
-
-
-
-
-
-
-
-
Other staff
members
LTIP
28/10/19
85,884
71,789
14,095
85,884
71,789
14,095
No. of
shares
under
option at 30
November
2023
Exercise
price (pence)
per share at
30 November
2023 (or date
of exercise if
earlier)
Normal
expiry
date
99,359
15.00
30/05/28
64,514
15.00
28/10/29
79,826
15.00
30/05/28
51,832
15.00
28/10/29
295,531
-
-
15.00
N/A
Total
381,415
71,789
14,095
295,531
Notes:
(1)
The ability to exercise awards under the LTIP is conditional on, amongst other things, the continued
employment of the individual within the Group and the satisfaction of specified performance conditions
(which are regularly reviewed by the Remuneration Committee). There were no lapsed options in the
year. Following the vesting of an LTIP award, it will normally remain capable of exercise until the 10th
anniversary of its original date of grant.
(2)
There was no exercise of LTIP awards during the year to 30 November 2023.
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.
34
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2023
Directors and their interests (continued)
There are a number of performance conditions as well as time restrictions relating to the financial year ended
30 November 2023 attached to these share schemes and are reviewed by the Remuneration Committee.
Directors' Remuneration
The following table shows emoluments paid and accrued to Directors during the financial year:
Year ended
Year ended 30 November 2023 30 November
2022
Total
Total
Salary/fees
£000
Bonus
£000
BIK
£000
Pension emoluments emoluments
£000
£000
£000
61
-
-
2
63
58
246
63
6
11
326
414
Current Directors:
Michael Tobin (Non-Executive
Director and Chairman)
Andrew Walwyn (Resigned 17
May 2024)
Frank Waters (Chief Executive
Officer)
Paul Howard (Non-Executive
Director)
224
55
7
41
-
-
Christopher Mills (Non-Executive
Director)
37
Philip Moses (Non-Executive
Director)
41
-
-
-
-
9
-
-
-
295
421
41
39
37
41
35
39
650
118
13
22
803
1,006
35
Bigblu Broadband plc
Governance
Directors’ Report (continued)
For the year ended 30 November 2023
Service Contracts
The Chief Executive Officer has a service contract 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 as well as
central team members as agreed with individuals.
Substantial shareholdings
As at 30 November 2023 the Group was aware of the following interests in 3% or more of its issued voting share
capital:
Shareholder
Harwood Capital LLP
Richard Griffiths
Liontrust Asset Management
Gresham House Asset Management
BGF Investment Management Limited
Hargreaves Lansdown Nominees Limited
Mr Andrew Walwyn
Interactive Investor Services Nominees Limited
Employee involvement
% Holding
No. of shares
24.9
11.5
9.0
8.9
7.8
6.4
5.7
5.4
14,560,000
6,739,374
5,279,671
5,203,644
4,544,444
3,730,787
3,320,553
3,136,350
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.
36
Bigblu Broadband plc
Governance
Board of Directors
For the year ended 30 November 2023
Directors
Appointment
Committee
Membership
Michael Tobin OBE
Non-Exec Chairman
Paul Howard
Non-Executive
Director
Christopher Mills
Non-Executive
Director
Philip Moses
Non-Executive
Director
joined
Michael
became Chairman
2015
the Board and
in September
Paul
joined
September 2015.
the Board
in
Christopher
Board in May 2018.
joined
the
Phil joined the Board in
May 2020
Michael chairs the Board’s
Remuneration and Nomination
Committees and is a member of the
Audit and Risk Committee.
Paul serves on the Board’s
remuneration and Audit and
Risk Committees.
None
the Board’s
Phil chairs
Audit and Risk Committee.
Independence
The Board consider Michael to be an
independent Director.
The Board consider Paul to
be an independent Director.
Board
The
consider
Christopher to be a non-
independent Director.
The Board consider Phil to
independent
be
Director.
an
Background
and Experience
Michael is a highly successful serial
technology entrepreneur & pioneer
with over 30 years' experience in the
telecoms & technology sector.
As Chief Executive, Michael Tobin
OBE led Telecity Group plc, a leading
FTSE250 Technology company from
2002 to 2015.
Michael
in 2002
joined Redbus
delisting it from the main market to
AIM and then took it private, winning
the
London Business Awards
"Business Turnaround of the Year"
award in 2005. After engineering the
merger with Telecity he successfully
re-listed Telecity Group in October
2007 winning the accolade of UK
Innovation Awards IPO of the year
2008
techMARK
Achievement of the year in the same
year.
and
the
Subsequently he grew the business
from £6m market cap in 2002 to being
a top performer in the FTSE250
worth over £2Bn, being recognised
as Britain's Most admired Tech
Company in 2012.
company
founded
Christopher
Harwood
Capital
Management in 2011, a
successor of the former
parent
of
Harwood, J O Hambro
Capital Management which
he co-founded in 1993. He
is Chief Executive and
Investment Manager of
North Atlantic Smaller
Investment
Companies
and Chief
Trust
plc
Investment Officer
of
Harwood Capital LLP. He
is a Non-Executive Director
companies.
of
Christopher was a Director
of Invesco MIM, where he
was
of North
American Investments and
Venture Capital, and of
Montagu
Samuel
International.
several
head
Phil has held CFO level
roles in both telco and
infrastructure companies in
the UK and internationally
for the last 20 years.
He held several divisional
CFO positions at BT as
well as that of IR director
and Group Controller.
Subsequently, he was
Group CFO at p/e owned
Arqiva, the UK’s largest
communications
tower
company; at London City
Airport and at pan-African
fibre and data centre
provider Liquid Telecom.
Phil has a mathematics
BSc
from Warwick
university and is an FCCA.
ranked
Paul spent over 15 years with
J.P Morgan Cazenove as a
telecoms and media analyst
and was one of Cazenove's
youngest ever partners. He
won numerous awards from
Reuters and Starmine and
was Head of the Number
One
European
telecoms research team as
ranked by the Institutional
Investor in 2011. Paul left
Cazenove
in 2011 and
became an investor and non-
executive director of various
small telecoms companies.
He also spent a year with
in 2015
Morgan Stanley
helping
their Select Risk
equity trading business. Paul
has a BSc from Durham
University in Maths and is a
qualified accountant.
37
Bigblu Broadband plc
Governance
Board of Directors (continued)
For the year ended 30 November 2023
Directors (continued)
Michael Tobin OBE
Non-Exec Chairman
Paul Howard
Non-Executive
Director
Christopher Mills
Non-Executive
Director
Philip Moses
Non-Executive
Director
Background and
Experience
(continued)
External
appointments
subsidiary
that, he ran
Prior to joining Telecity Group, Michael
headed-up
e-Commerce
Fujitsu's
in Frankfurt, Germany.
operations
ICL's Danish
Before
outsourcing
of
out
Copenhagen Denmark. He also held
several senior positions based in Paris
for over 11 years including Business
Development Director at International
Computer Group coordinating global
distribution of IT infrastructure. As a
Non-Exec Director, Michael was
instrumental in transforming PACNET
in Hong Kong from a Sub Sea Cable
operator to a successful Data centre
operator culminating in its sale in 2016
to Telstra for $800m.
was
named
Michael was named 'UK IT Services
Entrepreneur of the Year' by Ernst &
Young in 2009, 2010 & 2011; PWC
Tech CEO of the Year 2007; London
'Business
Chamber of Commerce
Person of the Year' for 2009 & 2010; In
2009
techMARK
'Personality of the Year'; In 2007 &
2009 he was the winner of the DCE
Outstanding Leader of the Year, and in
2008 won
'Data Centre Business
Person of the Year' at the Data Centre
Leaders awards. He was awarded
'Outstanding Contribution
the
Industry' at the Data Centre Europe
awards and in 2011 received a Lifetime
Achievement Award for services to the
industry.
In 2005 he was named
number 31 of Britain's Top 50
Entrepreneurs.
to
In 2015 Michael was honoured in the
Queens New Year’s Honours List with
the Order of the British Empire medal
for Services to the Digital Economy.
Michael holds a number of non-
roles
executive and Chairmanship
including EdgeConneX, Audioboom,
Ultraleap,
NorthC
Datacenters, Everarc PLC, Sungard
Availability Services, DC Byte,
Instrumental, ScaleUp Group UK.
LeaseWeb,
Lewis Moody
Foundation where he is Ambassador
Pulsant,
The
Paul holds a number of
including
executives roles,
Chairman
of Quickline
Communications Ltd
holds
Christopher
a
number of non-executive
roles.
Phil was appointed CFO of
Osborne Infrastructure Ltd
in January 2022, which
was rebranded as Octavius
Infrastructure Ltd in 2022.
38
Bigblu Broadband plc
Governance
Board of Directors (continued)
For the year ended 30 November 2023
Directors (continued)
Appointment
Frank Waters
Chief Executive Officer
Frank joined the Board as CFO on the completion of the reverse acquisition in May 2015.
Committee Membership
None
Independence
Executive – non-independent
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
Frank qualified as a Chartered Accountant (ICAS) with Ernst & Young in 1989. Frank has spent the last
20 years, primarily as finance director, in a number of fast-growing entrepreneurial companies in the
mobile, consumer electronics and technology sectors.
Frank was instrumental in the sale of DX Communications alongside Andrew Walwyn to what is now
Telefonica.
Frank joined Bigblu Broadband in the summer of 2013 and, as Chief Financial Officer, is responsible for
all Group finance, commercial, legal, regulatory, HR, IT and M&A matters.
Frank moved into the role of Chief Executive Officer immediately after the resignation of the CEO
39
Bigblu Broadband plc
Governance
Statement of Directors’ Responsibilities
For the year ended 30 November 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 UK 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 UK.
The Group financial statements are required by law and IFRS adopted by the UK to present fairly the financial
position, financial performance and cash flows of the Group for that year.
In preparing each of the group and company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and estimates that are reasonable and prudent;
•
state that the Group had complied with IFRS, subject to any material departures disclosed and explained
in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group and the Company will continue in business.
•
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy
at any time the financial position of the Group and to enable them to ensure that the financial statements comply
with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible
for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
On behalf of the Board
Frank Waters
Chief Executive Officer
17 May 2024
40
Bigblu Broadband plc
Governance
Corporate Governance Statement
For the year ended 30 November 2023
Dear Shareholder,
At Bigblu Broadband plc all our stakeholders are important to us. The design and operation of a robust
governance structure appropriate for a group of our scale and ambition is critical to meeting their needs. Our
approach to governance is based on the concept that good corporate governance enhances long-term
shareholder value and sets the culture, ethics and values for the rest of the Group.
The Board has ultimate responsibility for reviewing and approving the Annual Report and Accounts and it has
considered and endorsed the arrangements for their preparation. The Directors confirm the Annual Report and
Accounts, taken as a whole is fair, balanced and understandable and provides the information necessary for
shareholders to assess the Group's position and performance, business model and strategy.
Michael Tobin OBE
17 May 2024
41
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 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 unserved 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 continuing Group has customers in Australia totalling 55.3k as at 30 November 2023. The continuing Group
remains focussed on growing organically and inorganically the Continuing Group and works closely with network
partners to ensure we get the best customer offers in each jurisdiction. At the same time ensuring the continuing
operations are well positioned to realise value for our shareholders.
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 Viasat, Telenor and NBNCo. The Group makes its decisions on which 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 Australia have increased from 4 Mbps to 50 Mbps and the Group,
working with its satellite owner partners, believes that speeds and data allowances will continue to increase
exponentially over the next 3 – 5 years.
Our Australian business SkyMesh, went from strength to strength with year-on-year overall customer growth of
c.6% and of equal importance, strong customer engagement with c30% of new customers coming from word of
mouth. During the year SkyMesh was also awarded the Whistleout 2023 Best Satellite NBN Co provider for the
fourth 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.
42
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 (Cavendish).
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.
43
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Details of specific contacts at Cavendish are published on all the Group’s RNS releases and on the Group’s
investor website.
3. Taking into account wider stakeholder & social responsibilities & their implications for long-term
success
The long-term success of a business and good Corporate Governance includes the Board considering the
Group's impact on the communities it operates in, the environment and society as a whole. The group’s
stakeholders include shareholders, customers, members of staff, suppliers, regulators, industry bodies and
creditors including lenders. The Board works hard to identify the Group’s stakeholders and understand their
needs, interests and expectations.
The principal ways in which their feedback on the Group is gathered are via meetings, conversations, surveys
and online reviews. Following this feedback, the Group has continued and evolved its clearly defined customer-
focused and people-led strategy.
Every company should consider its corporate social responsibilities (CSR). Any CSR policy should include a
narrative on social and environmental issues and should show how these are integrated into the Group's
strategy. Integrating CSR into strategy will help create long-term value and reduce risk to shareholders and
other stakeholders. The Group see CSR as a very important area for consideration and are currently in the
process of finalising a CSR Policy. In the coming year we will be looking at setting carbon reduction targets
following the TCFD recommendations (The Task Force on Climate-related Financial Disclosures).
The Directors are aware of the impact the business activities have on the communities in which it operates and
has in place an environmental policy. The Group's responsibilities to stakeholders including staff, suppliers and
customers and wider society are also recognised and this is evidenced and underpinned by our values:
Innovation – Industry leading product design always exceeding customers’ expectations
• Customers – Grow profitable elements of the business whilst putting the customer first
•
• Quality – Excellence in operations, processes and systems
• Environment – Engaging with and supporting the communities in which we work
• Teamwork – Support and engage with our people
4. Embedding effective risk management
The board of the Group ensures that its risk management framework identifies and addresses all the relevant
risks and threats that the business may be subject to in the execution of its business plan. These include
extended business activities including key customers and its supply chain. The section “Principal Risks and
Uncertainties” on pages 24 to 28 of this Annual Report identifies these risks and how the Board and the business
mitigate these risks. The board of the Group meets regularly during the year and continually reappraises and
discusses the tactics and strategy employed to mitigate these risks.
5. Maintaining a balanced and well-functioning board
The Company ensures a balanced board membership to reflect the skills and attributes needed. The board
consists of two executive directors and four non-executive directors.
44
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
The Board and its committees
The Board is responsible for the effective oversight of the Group. It also agrees the strategic direction and
governance structure that will help achieve the long-term success of the Group and deliver shareholder value.
The Board takes the lead in areas such as strategy, financial policy and making sure a sound system of internal
control is maintained. The Board’s full responsibilities are set out in the schedule of matters reserved for the
Board described below. The Board delegates authority to its committees to carry out certain tasks on its behalf,
so that it can operate efficiently and give the right level of attention and consideration to relevant matters.
Role of the Board and management
Role of Chairman and Chief Executive Officer
There is a clear division of responsibilities between the running of the Board and the executive responsible for
the Group’s business.
The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting the agenda for
Board meetings. Once strategic objectives have been agreed by the Board, it is the Chief Executive Officer’s
responsibility to ensure they are delivered upon and consistently to be accountable to the Board. The day-to-
day operations of the Group are managed by the Chief Executive Officer and his management team.
Board processes
The full Group Board met ten times in the financial year under report and is scheduled to meet 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.
45
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 appropriate
remain within the overall control of the Board (or its committees) and those which are delegated to the CEO (or
onwards as appropriate). In addition to overall Group strategy, the Board approves the annual budget and
retains control over corporate activity (mergers, acquisitions, partnerships, material disposals and investments)
and material contract and financing decisions (over and above set value/credit-risk limits). The Board considers
that the current authority remains appropriate for the Board.
Management's role is to implement the strategic plan established by the Board and to work within the corporate
governance and internal control parameters established by the Board.
The Board has approved a schedule of matters reserved for its decision; specifically, the Board is responsible
for:
• Guiding the Group’s long-term strategic aims, leading to its approval of the Group’s strategy and its
budgetary and business plans
• Approval of significant investments, M&A and capital expenditure
• Approval of annual and half-year results
• Ensuring maintenance of a sound system of internal control and risk management (taking into
consideration recommendations of the Audit and Risk Committee)
• Ensuring adequate succession planning for the Board and Executive management (taking into
consideration the recommendations of the Nomination Committee)
• Determining the remuneration policy for the Directors and the senior management team (taking into
consideration the recommendations of the Remuneration Committee)
Board focus during the year
• Strategy and Funding:
During FY23, the Board worked with management to identify and anticipate industry trends to ensure
that the Group’s strategy is designed to address these trends as well as other industry dynamics, such
as the competitive landscape.
The Board also reviewed relationships with the Group’s main partners and suppliers. Together with our
Partners over the past five years, the Group successfully executed its strategy of becoming a leading
provider of last mile rural broadband solutions through a combined offering of both satellite, 5G and
fixed wireless products.
46
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
• Financials:
During FY23, 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.
• Business performance:
In FY23, the Board received and reviewed reports from management on the performance of the Group’s
business. The Board continually engages with management on various aspects of business
performance, Key Performance Indicators, including business drivers, industry trends, risks,
opportunities and the competitive landscape.
Board committees
The Board has established committees as follows:
• Audit and Risk Committee (chaired by Phil Moses) to oversee financial reporting, internal control and
the management of the risks the Group faces.
• Nomination Committee (chaired by Michael Tobin OBE) to lead the process for appointments to the
Board and a
• Remuneration Committee (chaired by Michael Tobin OBE) which has the responsibility of helping to
develop and manage the Group’s Remuneration Policy.
The committee reports can be found on pages 53 to 65 and each committee’s full terms of reference are
available on our website.
Table of Attendance
The table below summarises the attendance of the Directors and committee members at the scheduled Board
and committee meetings held during the year:
Michael Tobin OBE*
Andrew Walwyn
Frank Waters
Paul Howard
Christopher Mills
Philip Moses**
Board
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee
Held
10
10
10
10
10
10
Attended
10
10
10
10
7
9
Held
2
-
-
2
-
2
Attended
2
-
-
2
-
2
Held
4
-
-
4
-
-
Attended
4
-
-
4
-
-
Held
1
1
-
1
-
-
Attended
1
1
-
1
-
-
The figures in the “held” column represent the number of meetings a Director was eligible to attend as a Director
and the “attended” column represents the number of meetings attended by that Director.
* Michael Tobin OBE is Chairman of the Board and Chairman of the Nomination and Remuneration Committees.
** Philip Moses is Chairman of the Audit and Risk Committee.
47
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 1 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.
48
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Key Board Roles
Chairman
Chief Executive Officer
Non-Executive Directors
Leads the Board
Leads the management team
Promotes highest standard of
corporate governance
Challenges strategic matters
Supports the Chairman to ensure
appropriate governance standards spread
through the Group
Raises strategic initiatives aimed at
improving shareholder returns in line with
the strategic direction of the Group
Promotes a culture of openness
and debate
Oversees implementation of all Board-
approved actions
Encourages constructive
relations between Executive and
Non-Executive Directors
Facilitates effective contributions
by the Non-Executive Directors
Ensures that the Board is made aware of
the employees' views on relevant issues
Develops proposals for the Board to
consider in conjunction with fellow
Executive Directors
Non-Executive Director Independence
Acts as intermediary between
Directors when required
Challenges strategic initiatives
presented by Executive Directors
as well as assists in the
development of Group Strategies
Available to stakeholders to
address any concerns or issues
that they feel have not adequately
been addressed through usual
channels of communication.
Integral role in succession
planning
The Board considers and reviews the independence of Non-Executive Directors 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 60, Michael Tobin OBE, and Paul Howard both
participate in the Group’s share option plan. Notwithstanding this, both Michael Tobin and Paul Howard are
considered independent in character and judgement, this is evidenced by the valuable contributions they make
at Board and Committee meetings, and in particular, the knowledge and experience they bring to the roles as
Chairman, Non-Executive Directors and Committee members. In addition, whilst Christopher Mills is considered
Non-Independent, Christopher provides enormous guidance and support to the business and is considered to
be independent in character and judgement.
Appointment and Tenure
All Non-Executive Directors serve on the basis of letters of appointment which are available for inspection upon
request. The letters of appointment set out the expected time commitment of Non-Executive Directors who, on
appointment, undertake that they will have sufficient time to meet what is expected of them. Non-Executive
Directors are appointed for an initial three-year term and the continuation of their appointment is conditional on
satisfactory performance and subject to re-election at the Group’s Annual General Meetings.
49
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 59.
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 will receive
a full, formal and tailored induction on joining the Board designed to provide an understanding of the Group’s
business, governance and key stakeholders. The induction process typically includes an induction pack,
operational site visits, meetings with key individuals and the Group’s advisors, and briefings on key business,
legal and regulatory issues facing the Group.
As the business environment changes, it is important to ensure the Directors’ skills and knowledge are refreshed
and updated regularly. Accordingly, the Nomad ensures that updates on corporate governance, regulatory and
technical matters are provided to Directors at special sessions in between formal Board meetings. In this way,
Directors keep their skills and knowledge relevant so as to enable them to continue to fulfil their duties
effectively.
Information and Support Available to Directors
All Board Directors have access to the Company Secretary, who advises them on Board and governance
matters. The Chief Executive Officer 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. In accordance with the Company’s
articles of association when a non-executive director has served for a period of nine years the non-executive
director will be subject to annual retirement by rotation at each 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.
50
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 carried out during 2023 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.
8. Ethical values & behaviours
The Company operates a corporate culture that is based on ethical values and behaviours. The Chief Executive
Officer communicates 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.
The division of responsibilities between the Chairman, Chief Executive Officer and Non-Executive Directors is
set out in writing in their contracts and agreed by the Board. The roles of the Chairman and the Chief Executive
Officer are separate with a distinct division of responsibilities. The partnership between Michael Tobin OBE and
Andrew Walwyn is based on mutual trust and facilitated by regular dialogue between the two. The separation
of authority enhances independent oversight of the executive management by the Board and helps to ensure
that no one individual on the Board has unfettered authority.
For the roles and responsibilities of the Board please see section 6 on page 49.
51
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
10. Communicating with shareholders and other relevant stakeholders
Shareholder engagement
Responsibility for shareholder relations rests with Frank Waters, the 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 21 June 2024, 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 54.
Independent auditor and audit information
Each person who is a Director at the date of approval of this report confirms that, so far as the Director is aware,
there is no relevant audit information of which the Group’s auditor is unaware and each Director has taken all
the steps that he or she ought to have taken as a Director to make himself or herself aware of any relevant audit
information and to establish that the Group’s auditor is aware of that information. This confirmation is given and
should be interpreted in accordance with the provisions of the Companies Act 2006.
Haysmacintyre LLP have expressed their willingness to continue as the Group’s auditor. As outlined in the Audit
and Risk Committee report on page 59, resolutions proposing their reappointment and to authorise the Audit
and Risk Committee to determine their remuneration will be proposed at the next AGM.
On behalf of the Board
Ben Harber
Company Secretary
17 May 2024
52
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Nomination Committee Report
The Nomination Committee is chaired by Michael Tobin OBE and its other members during the year were
Andrew Walwyn and Paul Howard.
Role and responsibilities
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 Committee assists the Board in discharging its responsibilities relating to the composition and make-up of
the Board and any committees of the Board. It is also responsible for periodically reviewing the Board’s structure
and identifying potential candidates to be appointed as Directors or Committee members as the need may arise.
The Committee is responsible for evaluating the balance of skills, knowledge and experience as well as the
size, structure and composition of the Board and committees of the Board, retirements and appointments of
additional and replacement Directors and Committee members and makes appropriate recommendations to the
Board on such matters, having regard to the Company’s aim to be an equal opportunity employer, addressing
its corporate social responsibility by promoting equality and diversity in its workforce. A copy of the Committee
terms of reference is available on the Company’s website.
Meetings during the year
A meeting of the Nomination Committee was held on 28th September 2023.
Process for Board appointments
When the Company decides to appoint a Non-Executive Director:
• The Committee Chairman, or search consultants where engaged, will typically submit a short-list of
candidates to members of the Committee and the Chief Executive Officer for them to review and enable
them to suggest other candidates unless the Committee has been made aware of the availability of very
suitable candidates.
• The Committee Chairman, one other Committee member and the Chief Executive Officer will then meet
short-listed candidates selected by the Committee. In addition, potential candidates will be given the
opportunity to meet with Executive Directors as appropriate. If the Chairman wishes to proceed with the
selection process, the candidate will then be invited to meet all members of the Committee.
• After meeting the candidate, the Committee will decide whether to recommend the candidate to the
Board for appointment.
• Where an exceptional candidate is identified the process may be shortened by Committee decision.
When the Company decides to appoint an Chief Executive Officer:
• The Committee Chairman and the Chief Executive Officer or, where engaged, search consultants, will
submit a short-list of one or more candidates to the Committee following meetings with Executive
management.
• Some or all of the Committee members will then meet the candidates selected for interview.
• The Committee’s assessments will be reviewed with the Chairman of the Board and the Chief Executive
Officer, following which a candidate may be recommended to the Board for appointment.
Michael Tobin OBE
Nomination Committee Chairman
17 May 2024
53
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 2023, the Committee formally met two times and
informally as and when required. The table on page 48 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 Executive 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 coming year.
Roles and activities
The purpose of the Committee is to assist the Board in the effective discharge of its responsibilities for financial
reporting, corporate control and risk management. The Committee is responsible for monitoring the integrity of
the Group’s financial statements, including its annual and half-yearly reports, interim management statements,
preliminary result announcements and any other formal announcements relating to its financial performance
prior to release. The Committee oversees the relationship between the Group and its external auditors and
makes recommendations to the Board on their appointment. In addition, the Committee monitors and reviews
the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into
account relevant legal, professional and regulatory requirements.
The terms of reference of the Committee also includes the following responsibilities:
•
•
•
•
•
•
to increase shareholder confidence and to ensure the credibility and objectivity of published financial
information.
to assist the Board in meeting its financial reporting responsibilities
to assist the Board in ensuring the effectiveness of the Group's accounting and financial controls
to strengthen the independent position of the Group's external auditors by providing channels of
communication between them and the Directors
to review the performance of the Group's external auditing functions
to review and challenge significant accounting and treasury policies, the clarity and completeness of
disclosures in financial reports and significant estimates and judgements.
to review the findings of the audit with the external auditors
•
• where requested by the Board, to review the content of the annual report and accounts and advise the
Board on whether, taken as a whole, it is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position and performance, business
model and strategy.
to monitor and keep under review the adequacy and effectiveness of the Group’s financial controls and
risk management systems, including a review of the Group’s risk management framework; and
monitoring and reviewing the appropriateness of timing of creation of a Group internal audit function
together with an annual internal audit plan; and
•
54
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Roles and activities (continued)
•
to review the Group’s policies and procedures for preventing and detecting fraud, its systems and
controls for preventing bribery, its Code of Conduct and its policies for ensuring that the Group complies
with relevant regulatory and legal requirements. The full terms of reference of the Committee can be
found on the Group’s website.
Significant issues
The issues considered by the Committee that are deemed to be significant to the Group are set out below.
Revenue
recognition
Goodwill and
intangibles
carrying value
Valuation of
carrying value
of interest in
UK Fixed
Wireless
Operations
The Group principally generates revenue from sales of airtime, data, hardware and
installation in connection with supplying Broadband services and network recharges.
There is a risk therefore that revenue is inappropriately recognised if revenue is incorrectly
apportioned to a product or service.
A detailed revenue recognition policy is in place, and follows IFRS 15, and includes
processes and procedures for recognition dependent upon the individual nature of the
goods or services sold. The Group’s external auditors as part of the annual statutory audit
have reviewed the revenue recognition policy and performed testing of revenue
recognition and found revenue to be appropriately accounted for in accordance with
IFRS15.
At 30 November 2023, the Group had on its balance sheet goodwill of £3.4m (2022:
£5.7m) and other intangibles of £2.2m (2022: £1.7m) that has primarily arisen as a
consequence of past acquisitions. The value of intangible assets increased by the cost of
the customers acquired by SkyMesh from Uniti (£2.5m) less an amortization charge of
£1.5m, negative forex adjustment of £0.1m, impairment of £0.1m and reclassification of
£0.3m to assets held for sale.
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 2023 required an impairment
adjustment to be recognized relating to Goodwill of the Nordics business (£1.8m) and the
carrying value of IP addresses belonging to SkyMesh (£0.1m).
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 24
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.
55
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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. This while not an exhaustive list includes hiring additional resources 3rd party reviews
etc. The aforementioned functions provide additional assurance to an established Audit and Risk Committee
who have ultimate responsibility for the oversight and review of the adequacy and effectiveness of the Group’s
systems of internal controls. In addition, the Committee in the absence of a dedicated internal audit function will
from time to time engage with External consultants to review aspects of the business as appropriate. Such
findings will be discussed at the Audit and Risk Committee.
The external auditors provide a supplementary, independent, and autonomous perspective on those areas of
the internal control system which they assess in the course of their work. Their findings are regularly reported
to the Audit and Risk Committee and the Board.
Key elements of the control environment are:
• annual budgets and strategic plans prepared for all business units.
• monitoring of performance against budget and forecast with reporting to the Board on a regular basis.
• monthly review of detailed key performance indicators formally at Board level as well as at an
Operational Level within the Continuing businesses.
• all contracts are reviewed at a level of detail appropriate to the size and complexity of the contract.
•
•
• an operations team reviews key business processes, controls and their effectiveness, as well as
timely reconciliations are performed for all significant balance sheet accounts.
clearly defined organisational structure and authorisation lines including Cash Control
•
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. The remaining business units each have a senior financial controller locally 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 Company’s obligation to keep adequate
accounting records. The accounting records are kept at the registered office of the Group or relevant statutory
entity office as well as in the cloud within our accounting systems.
56
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
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 reviews as approved by the Audit and Risk Committee with the
deployment of central resources and where appropriate 3rd party reviews 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.
The Group will adopt a two-pronged approach to identifying risks:
1) a bottom-up approach at the business function level; where risks are managed at the operational level with
an appropriately defined escalation process in place for those risks rated as high; and
2) a top-down approach at the Executive level, where the principal risks and uncertainties are identified and
managed.
A series of risk identification approaches will be used including adding risk discussions into team meetings.
All identified risks will be assessed against a pre-defined scoring matrix and prioritised accordingly. Any risks
identified in the bottom-up approach deemed to be rated as higher risk are escalated in line with pre-defined
escalation procedures for further evaluation. The Group's risk appetite is considered by the Board and evaluated
to ensure appropriateness of risk management and mitigation.
Whistle-blowing and anti-bribery
Whistleblowing and Anti Bribery policies are in place in the Group enabling employees to confidentially report
matters of concern directly to Non-Executive Directors, and that all Executives are reminded of their
responsibility in relation to Anti Bribery Legislation. This is also a regular topic on the Board Meeting agendas.
57
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
External Auditor
The Audit and Risk Committee reviews and makes recommendations with regard to the appointment and
reappointment of the external auditors. In making these recommendations, consideration is given to auditor
effectiveness and independence, partner rotation and any other factors that may impact the reappointment of
the external auditors. There are no contractual restrictions on the choice of external auditors.
The Audit and Risk Committee is confident that the effectiveness and independence of the external auditors is
not impaired in any way. The Committee will continue to assess the effectiveness and independence of the
external auditors.
The external auditors may perform certain limited non-audit services for the Group. Providing such services are
permissible in line with the requirements of the FRC’s 2019 Ethical Standard. Any such non-audit services
require pre-approval by the Audit and Risk Committee and are only permitted to the extent allowed by relevant
laws and regulations.
The non-audit services, including tax compliance activities and internal audit are provided by an independent
accounting firm. Haysmacintyre LLP continue to review the half year reporting. Full details of auditor's
remuneration are shown in note 4 to the Financial Statements.
Review of effectiveness of External Auditors
An important role of the Committee is to assess the effectiveness of the external audit process. In performing
this assessment, the Committee:
•
reviewed the annual audit plan and considered the 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.
considered their length of tenure.
reviewed the nature and magnitude of non-audit services provided; and
reviewed the external Auditors own independence confirmation presented to the Committee.
•
•
•
Based on the assessment performed, the Committee has recommended to the Board that a resolution to
reappoint Haysmacintyre LLP be proposed at the next Annual General Meeting.
Philip Moses
Chairman of the Audit and Risk Committee
17 May 2024
58
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman
As Chairman of the Bigblu Broadband Remuneration Committee, I am pleased to present the Board of Directors’
Remuneration Report for the year ended 30 November 2023, which has been prepared by the Committee and
approved by the Board. In line with the UK reporting regulations, this report is divided into three sections:
• The Annual Statement by the Remuneration Committee Chairman;
• The Directors’ Remuneration Policy, which details the Group’s remuneration policies and their link to
Group strategy, as well as projected pay outcomes under various performance scenarios; and
• The Annual Report on Remuneration, which focuses on our remuneration arrangements and incentive
outcomes for the year under review and how the Committee intends to implement the Remuneration
Policy in FY24 and beyond.
The role of the Remuneration Committee is documented in its Terms of Reference which were reviewed and
adopted by the Board of Directors in May 2016 which are also reviewed from time to time to ensure up to date.
The objectives of the Remuneration Committee are to ensure that the Group's Directors and senior executives
are fairly rewarded for their individual contributions to the Group's overall performance by determining their pay
and other remuneration and to demonstrate to all shareholders that the general policy relating to, and actual
remuneration of individual senior executives of the Group, is set by a committee of the Board members who
have no personal interest in the outcome of the decisions and who will give due regard to the interests of the
shareholders and to the financial and commercial health of the Group.
The Remuneration Committee intends that its policy and practice should align with and support the
implementation of the Group’s strategy and effective risk management for the long term. The policy is intended
to motivate the right behaviours and to ensure that any risk created by the remuneration structure is acceptable
to the Committee and within the risk appetite of the Board and its strategy.
The remuneration package for executive Directors comprises a combination of annual salary, performance
bonuses and share options / Long Term Incentive Plans / Management Incentive Plans with set performance
criteria. Remuneration for non-executive Directors consists of an annual fee with options granted in certain
circumstances. There were additional fees awarded for serving on Board committees and non-executive
Directors are not entitled to annual bonuses.
The members of the Remuneration Committee are Michael Tobin OBE and Paul Howard. The Chief Executive
Officer, or other Non-Executive Directors, may be invited to Remuneration Committee meetings at the discretion
of the Committee. The Committee plans to meet at least twice during the coming year.
The agenda for Remuneration Committee meetings is prepared in conjunction with the Chairman of the
Committee. Submissions are circulated in advance and may include remuneration benchmark surveys and best
practice guidelines together with papers relating to specific agenda items.
Remuneration policy for FY23 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 evolution post 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 2023, 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.
59
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman (continued)
Remuneration policy for FY23 and future years (continued)
Our remuneration arrangements reflect that we compete for talent in a competitive market against other
telecommunications companies. The Committee has also carefully considered the expectations of our
shareholders in formulating our policy and has included claw back provisions in our incentive schemes for
Directors and Board Members, to align with developing best practice. The overarching principles of our
Remuneration Policy are to provide a competitive package of fixed and variable pay that will enable the Group
to ensure it can attract and retain executives with the right skills and experience to drive the long-term success
of the Group.
The Committee believes that our remuneration arrangements can achieve these goals through the application
of stretched performance targets and strong shareholder alignment through our equity incentives and
Management Incentive Plans. The Committee also .
Remuneration decisions in FY23
The activities of the Committee and key decisions in FY23 are set out below:
• Executive salaries were reviewed. Salaries were reduced by 10% in FY22 with no increase in FY23
despite inflationary pressures thereby in effect a further reduction in real terms.
• The basis and awards under the bonus schemes were reviewed and as in past years linked intrinsically
to delivering Revenue, Adjusted EBITDA and Cash targets.
• Non-Executive Director salaries were reduced by 20% with effect from December 2021 with no increase
in FY22 or FY23 despite inflationary pressures thereby in effect a further reduction in real terms.
• Under the terms of the Management Incentive Plan a full review on options was undertaken by external
lawyers specialising in such schemes and no changes were proposed during the year save a review of
thresholds and participants to ensure the team was fully aligned with maximising shareholder value post
the disposal of the UK fixed wireless operation, in July 2021.
• Reorganisation of the costs base was also addressed including reviewing redundancy calculations for
remaining team members in the event of further disposals.
Given almost all the underlying trading metrics are delivered from our Australian and Norwegian businesses
when taking into consideration FOREX movements in the period the Group delivered results for the Continuing
Operations in line with forecasts with revenue at £25.9m (FY22: £27.2m) and adjusted EBITDA at £4.5m (FY22:
£4.1m). 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
60
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman (continued)
No award was made in the current year to Senior Executives instead the Committee, as outlined last year
revisited all incentive plans post last year’s Disposal to ensure Senior Executives short, medium and long term
Management Incentive Plans are intrinsically linked to growing shareholder value. Thus the MIP in place is
considered to align the interests of relevant Bigblu Broadband team members with that of the interests of our
shareholders
Directors’ remuneration policy
This section describes the Group’s proposed remuneration structure for Directors which, if approved, will apply
for up to three years from the date of the Annual General Meeting.
The overarching principles of our remuneration policy are to provide a competitive package of fixed and variable
pay that will enable the Group to ensure it has executives with the right skills and experience to drive the success
of the Group, and that their remuneration is linked to shareholder interests and the Group’s long-term success.
Our remuneration philosophy is:
•
•
•
to promote the long-term success of the Group, with stretching performance targets which are rigorously
and consistently applied
to provide appropriate alignment between the Group’s strategic goals, shareholder returns and
executive reward
to have a competitive mix of base salary and short and long-term incentives, with an appropriate
proportion of the package determined by stretching targets linked to the Group’s performance
Executive Directors’ fixed and variable remuneration arrangements have been determined taking into account:
•
•
•
•
the role, experience in the role, and performance of the Executive Director
the location in which the Executive Director is working
remuneration arrangements at UK listed companies of a similar size and complexity
remuneration arrangements at UK telecommunications companies of a similar size and complexity,
including companies with which the Group competes for talent
• best practice guidelines for UK listed companies set by institutional investor bodies
61
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman (continued)
Future policy table
The key components of Executive Directors’ remuneration are as follows:
Fixed Pay
Type
Base
salary
Purpose and link
to
strategy
To attract and
retain
talent of the right calibre
and with the ability to
contribute to strategy, by
ensuring base salaries
are competitive in the
relevant talent market.
Pension
Provide post-retirement
benefits for participants
in a cost-efficient and
equitable manner.
Benefits
To provide competitive
benefits for each role.
Operation
Maximum
opportunity
Performance
metrics
performance
market
is
when
Group
against
expectations
considered
determining
appropriate
levels.
salary
None
None
Executive Director salary
decreases / increases will
normally be in line with those
the wider executive
for
population.
employee
However,
salary
decreases / increases may
be made where there is a
or
change
responsibilities.
higher
role
in
The Executive Director
receives
matching
a
contribution of 4.5 percent of
salary under the opt-in to the
Group Workplace Pension
Scheme. Subject to the
maximum
applicable
contribution.
The Committee does not
anticipate pension benefits
as being at a cost to the
Group that would exceed 10
percent of base salary,
future
notwithstanding
changes
pension
to
legislation.
There is no overall maximum
value set out for benefits.
They are set at a level that is
comparable
to market
practice and appropriate for
individual
Group
circumstances.
The Committee retains the
discretion to amend benefits
in exceptional circumstances
or in circumstances where
the
outside
factors
have
Group’s
(e.g.
materially
increases
insurance
premiums).
control
changed
in
and
of
reference
Base salaries are usually reviewed
annually, with
to
individual performance, Group
performance,
market
competitiveness, salary decreases
/ increases across the Group and
the position holder’s experience,
competence and criticality to the
business.
Any decreases / increases are
generally
1
effective
December.
from
Pension contributions are provided
by
the Group as part of a
legislatively compliant Workplace
Pension Scheme that requires an
overall contribution of 9% of gross
base salary to be made by Year 3
the scheme. This overall
of
percentage contribution will be
made up from a combination of
contributions from the Executive
Directors and the Group, with a
choice of funding vehicles through
either
the Group Plan or by
contributions being made to a
personal SIPP chosen and set up
by the Chief Executive Officer.
the
Benefits currently
provision of private medical, life
insurance, permanent health and
disability
car
allowance.
Reasonable
relocation package
including annual family visitation
allowance, legal fees allowance
and health insurance.
Travel and subsistence allowances
as well as reimbursement is in line
with the Group Expenses Policy
and other benefits may be provided
based on individual circumstances.
insurance and
include
62
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman (continued)
Variable Pay
Type
Bonus
arrangements
and
Purpose
link to
strategy
focus
Aims
to
on
executives
financial
achieving
targets relevant to the
business priorities for
financial period
the
where
and
to
appropriate
outperform
Non-Executive Directors Fees
Type
Non-
Executive
Directors’
Fees
the
Purpose and link
to
strategy
To
reflect
time
commitment
in
and
preparing
attending meetings,
the
and
duties
responsibilities of the
role
the
and
contribution expected
from
Non-
the
Executive Directors.
for
Operation
Maximum
opportunity
Performance
metrics
targets
The annual bonus will be
based on achievement of
(e.g.,
financial
revenue growth, EBITDA
improvements and cash
metrics.
The Committee
has
discretion to adjust the
formulaic bonus outcome
the
downwards within
limits of
to
ensure alignment of pay
underlying
with
the
performance
business.
the plan,
the
of
vest
The base bonus opportunity
for Executive Directors will
be up to 75 percent of base
salary.
Up to 75 percent of maximum
will
target
performance. Performance
above base performance can
result in additional bonuses
being paid linked to improved
performance - i.e. paying for
themselves.
for
the start of
Typically, performance measures
and targets are set prior to or
the
shortly after
relevant financial period.
At the end of the financial period,
the Remuneration Committee will
determine the extent to which the
targets have been achieved.
Awards are typically delivered in
cash; however, the Committee
has discretion to defer awards in
cash or in shares.
The Committee has discretion
and the contractual legal vehicle,
to reduce or recoup the bonus in
the event of serious
financial
misstatement or misconduct. In
extreme cases of misconduct, the
Committee may claw back annual
bonus
previously
made.
Additional bonuses can be earned
the
at
the sole discretion of
Remuneration Committee
if
exceptional circumstances arise.
payments
Operation
Maximum
opportunity
Performance
metrics
None
Any decreases / increases to
Non-Executive Director fees
will be considered as a result
of the outcome of a review
process and
into
taking
account
wider market
factors, e.g. inflation. There
is no prescribed individual
maximum fee.
Further details are set out
below.
in
Monthly fees for Non-Executive
Directors are paid via Payroll and
were reduced by 20% from the
start of December 2021.
Additional fees paid to the
Chairmen of Board Committees
may be paid if there is a material
time commitment
increase
required.
Non-Executive Directors do not
participate in any annual bonus
incentive schemes, nor do they
receive any pension or benefits
travel
than nominal
(other
expenses).
Non-Executive
Directors will participate in the
Company’s
option
schemes
and MIP where
appropriate.
share
63
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman (continued)
Notes to the policy table
• Revenue growth, adjusted EBITDA, free cash flow and net cash 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 as well as the desire to realise
value for shareholders
• Differences in remuneration policy operated for other employees.
• Other senior and key-role employee remuneration has some of the same components as set out in
the policy, being base salary, annual bonus, long-term incentive participation, and pension provision.
However, there is no provision for Medical insurance, Permanent Health Insurance, Life assurance
or Car Allowance for non-Executive employees. Annual bonus and long-term incentive
arrangements share a similar structure and pay-out arrangement, although the mix between
performance-based and time-based awards, and the maximum award, varies by seniority and role.
In recruiting a new Non-Executive Director, the Committee will use the policy as set out in the table below.
Non-Executive Directors
The appointments of each of the Chairman and the Non-Executive Directors are for a fixed term of 3 years,
and subject to one third retirement by rotation and re-election at the AGM. Their letters of appointment set
out the terms of their appointment and are available for inspection upon request. They are not eligible to
participate in the Executive annual bonus scheme, nor do they receive any additional pension or expenses
(other than nominal travel expenses) on top of the fees disclosed below. They do however have eligibility to
participate in the Company’s Share Schemes and Management Incentive Plans. Non-Executive Directors
appointment may be terminated at any time upon written notice or in accordance with the articles and receive
no compensation on termination.
Non-Executive
Director
Role
Appointment date
Re-appointment
date
Term of
appointment
Michael Tobin
Chairman
September 2015
May 2022
Paul Howard
Non-Executive Director
September 2015
May 2023
Christopher Mills Non-Executive Director
May 2019
Philip Moses
Non-Executive Director
May 2020
May 2023
May 2021
3 years
3 years
3 years
3 years
Executive Directors
The Executive Director entered into a service agreement with the Company as follows.
Executive
Director
Role
Contract date
Re-appointment
Notice period
date
Frank Waters
Chief Executive Officer
May 2015
May 2021
12 months
64
Bigblu Broadband plc
Governance
Corporate Governance Statement (continued)
For the year ended 30 November 2023
Annual statement of the remuneration committee chairman (continued)
Executive Directors (continued)
The Employer is entitled to terminate an Executive Director’s employment by payment of a cash sum in lieu
of notice, and other entitlements equal to (i) the basic salary and bonuses that would or could have been
payable, (ii) the cost that would have been incurred in providing the Executive Director with medical
insurance and other benefit entitlements such as Pensions, enhanced statutory pay, DIS, CIC that form part
of their remuneration package. 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 and other 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
17 May 2024
65
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc
For the year ended 30 November 2023
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 2023 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated
and Company Statements of Cash Flows, the Consolidated and 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
Financial Reporting 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 2023 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 line 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.
66
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2023
Audit risk
How we responded to the risk
Impairment of goodwill
Our audit work included, but was not restricted to, the following:
The group recognised goodwill of £3,381,000 as at
30 November 2023 (2022: £5,661,000).
There is a risk that goodwill is impaired and therefore
materially overstated.
For
the year ended 30 November 2023,
management performed an impairment review for
each of the cash-generating units (CGUs) to which
goodwill relates.
The assessment was based on the future cash flows
of each CGU using either discounted cash flow
models or fair value assessments.
Significant management judgement and estimation
uncertainty is involved in this area, where the
primary inputs are:
• Estimating future cash flows or fair values
associated with the CGUs;
• Selecting an appropriate discount rate and
variables with the cash flow model; and
• Selecting appropriate valuation methodologies
and relevant market-based valuation multiples.
• 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
impairment models.
• We reviewed management’s forecasted cash flows that fed
into discounted cash
flow models and challenged
assumptions around these with reference to historic results,
market trends and future expectations.
• We assessed the appropriateness of the growth and
discount rates used by management and challenged
management on those that fell outside of our expectations.
• We considered the basis from which fair values were
derived and considered whether they were reasonable.
•
In respect of Brdy AS Infra and Brdy AS Nordics, we
considered
the valuation assessment prepared by
management which incorporated both enterprise and equity
valuation assessments effective as at 30 November 2023.
Impairment of parent company
valuation
investment
Our audit work included, but was not restricted to, the following:
The parent company holds investments in wholly
trading subsidiaries, Skymesh Pty Ltd
owned
(“Skymesh”), Brdy AS Infra and Brdy AS Nordics.
There is a risk that these investments are impaired
and therefore materially overstated.
the year ended 30 November 2023,
For
management considered whether
indicators of
impairment existed for each investment in subsidiary
held at cost less impairment.
Where
performed by management
to determine
recoverable value of each investment balance.
relevant, valuation assessments were
the
Significant management judgement and estimation
uncertainty is involved in this area, where the
primary inputs are:
67
• 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
methodologies and assessed and challenged
appropriateness of the assumptions used within them.
fair value assessment
the
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2023
Audit risk
How we responded to the risk
Impairment of parent company
valuation (continued)
• 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.
investment
• We challenged management on contradictory
evidence obtained.
• We used alternative valuation
techniques
benchmark
reasonableness.
the
client’s
assessment
to
for
• We assessed management’s assessment of Brdy as
a disposal group and discontinued operation and
impairment to fair value less costs to sell in line with
the requirements of IFRS 5.
•
In respect of Brdy AS Infra and Brdy AS Nordics, we
considered the reasonableness of the assessment
prepared by management which incorporated both
enterprise and equity valuation assessments
effective to derive a fair value position as at 30
November 2023.
Investment in Other Equity Instruments & Loan
Notes
Our audit work included, but was not restricted to, the
following:
The group holds
instruments at £2,240,000 (2022: £2,240,000).
investments
in other equity
There is a risk that shares may not be held at fair value
under IFRS 9 and therefore the materially misstated in
the group financial statements.
The group also holds loan notes with a carrying value
of £3,754,000 (2022: £3,590,000).
• We assessed management’s fair value assessment
process and performed analysis which formed the
basis
of management’s
assumptions.
challenge
our
of
• We considered the extent to which alternative
possible valuations of
investment
presented a more reliable indicator of fair value when
compared to the recognised carrying value.
the equity
There is a risk that the loan notes are not recoverable
due to impairment indicators noted at the issuer.
• We verified the arithmetical accuracy of the equity
valuation model.
For the year ended 30 November 2023, management
performed a fair value review to assess the Other
Equity Instrument fair value. The assessment was
based on the future cash flows of the equity instrument
using a discounted cash flow model.
• We reviewed management’s equity valuation model
and challenged assumptions used in the model,
particularly the multiplier used, with reference to
historic
future
expectations.
results, market
trends and
Significant management judgement and estimation
uncertainty is involved in this area, where the primary
inputs are:
• We challenged management on key assumptions
and on contradictory evidence related to the carrying
value of financial assets.
• 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.
• We assessed the appropriateness of the growth and
discount rates used by management and challenged
management on those that fell outside of our
expectations.
68
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2023
Audit risk
How we responded to the risk
Investment in Other Equity Instruments & Loan
Notes (continued)
• We considered alternative fair value indicators to
the reasonableness of management’s
the Group’s
fair value of
the
consider
assessment of
investment.
• We agreed the calculation of accrued interest
accumulated on the loan note’s carrying value.
• We assessed the recoverability of the loan notes with
reference to third party information available for the
loan note issuer.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, in evaluating the effect of
misstatements and in forming an 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 £370,000. This was determined with
reference to 1.25% 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 £277,500.
The reporting threshold to the Audit and Risk Committee was set as 5% of materiality, being £18,500. 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 £357,000. Our materiality was set at
£357,000 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, performance materiality was set at 75% of materiality, being £268,000.
The reporting threshold to the Audit and Risk Committee was set as 5% of materiality, being £18,000. If, in our
opinion, differences below this level warranted reporting on qualitative grounds, these were also reported.
Conclusions relating to going concern
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:
69
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2023
• Discussing management’s assessment of the group’s ability to remain as a going concern
• Reviewing and understanding the cash flow forecasts for a period of not less than twelve months from the
date of approval of these financial statements 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 a period of not less than twelve months from the date of approval of these financial statements;
• Considering the existence and availability of the Group’s debt facilities, including prospective covenant
compliance forecasting for a period of not less than twelve months from the date of approval of these
financial statements; and
• Performing stress tests including sensitivity analysis to model the effect of changing assumptions made or
amending key data used in management’s cash flow forecasts and considering the impact on the group’s
ability to adopt the going concern basis.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
70
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2023
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
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;
• 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.
71
Bigblu Broadband plc
Independent Auditor’s Report
To the members of Bigblu Broadband plc (continued)
For the year ended 30 November 2023
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
17 May 2024
10 Queen Street Place
London
EC4R 1AG
72
Bigblu Broadband plc
Consolidated Statement of Comprehensive Income
For the year ended 30 November 2023
Registered Number 09223439
Continuing Operations
Revenue from contracts with customers
Cost of sales
Notes
2
Gross profit
Distribution expenses
Administrative expenses
Operating (loss) / profit
Finance costs
(Loss) / profit before tax
Taxation credit / (charge) on operations
(Loss) / profit from continuing operations
Loss from discontinued operations
Loss for the year
Other comprehensive expense
Foreign currency translation difference
3
7
8
13
2023
£’000
25,937
(16,310)
9,627
(5,639)
(5,717)
(1,729)
(238)
(1,967)
529
(1,438)
(3,263)
(4,701)
2022
restated
£’000
27,192
(16,770)
10,422
(5,638)
(4,267)
517
(64)
453
(328)
125
(3,059)
(2,934)
(406)
206
Total comprehensive loss for the year
(5,107)
(2,728)
Total comprehensive loss for the year is all attributable to the
owners of Bigblu Broadband Plc
Earnings per share from loss 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
9
9
(8.0p)
(8.0p)
(2.5p)
(2.5p)
(5.6p)
(5.6p)
(5.0p)
(5.0p)
0.2p
0.2p
(5.2p)
(5.2p)
Adjusted earnings per share from continuing operations
attributable to the ordinary equity holders of the company (A
non-GAAP measurement)
Continuing operations - Adjusted Basic EPS
Continuing operations - Adjusted Diluted EPS
9
9
7.1p
7.1p
5.4p
5.4p
The notes on pages 80 to 115 form an integral part of these financial statements.
73
Bigblu Broadband plc
Consolidated Statement of Financial Position
For the year ended 30 November 2023
Registered Number 09223439
Notes
10
11
12
20
14
15
16
13
17
17
18
13
19
20
21
21
22
22
22
22
22
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
Assets classified as held for sale
Total current assets
Total assets
Current liabilities
Trade and other payables
Provisions for liabilities and charges
Loans
Liabilities associated with assets classified as held for
sale
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
Foreign exchange translation reserve
Reverse acquisition reserve
Listing cost reserve
Retained losses
Capital and reserves attributable to owners of Bigblu
Broadband Plc
Total equity
Approved by the Board on 17 May 2024 and signed on its behalf by:
2023
£’000
378
5,553
5,995
800
12,726
3,632
111
2,830
6,573
2,516
9,089
2022
£’000
2,881
7,433
5,830
303
16,447
4,195
1,142
2,335
7,672
-
7,672
21,815
24,119
(7,743)
(685)
(2,100)
(10,528)
(2,349)
(12,877)
-
(616)
(616)
(8,839)
(685)
-
(9,524)
-
(9,524)
(559)
(646)
(1,205)
(13,493)
(10,729)
8,322
13,390
8,783
8,608
309
26,120
(2,952)
(3,317)
(219)
(29,010)
8,322
8,322
8,763
8,589
309
26,120
(2,546)
(3,317)
(219)
(24,309)
13,390
13,390
Frank Waters
Chief Executive Officer The notes on pages 80 to 115 form an integral part of these financial statements.
74
Bigblu Broadband plc
Company Statement of Financial Position
For the year ended 30 November 2023 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
Assets held for sale
Total current assets
Liabilities
Current liabilities
Trade and other payables
Provisions for liabilities and charges
Loans
Total current liabilities
Non-current liabilities
Other payables
Net assets
Equity
Share capital
Share premium
Share option reserve
Capital redemption reserve
Listing cost reserve
Retained (losses) / profits
Total equity
Notes
2023
£’000
2022
£’000
12
14
16
17
17
18
21
21
22
22
22
67
17
30,995
31,079
354
2,138
2,492
167
2,659
(940)
(685)
(2,100)
(3,725)
113
35
32,913
33,061
768
954
1,722
-
1,722
(1,441)
(685)
-
(2,126)
-
(13)
30,013
32,644
8,783
8,608
309
26,120
(219)
(13,588)
8,763
8,589
309
26,120
(219)
(10,918)
30,013
32,644
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 £2.7m (2022: loss £13.6m).
Approved by the Board on 17 May 2024 and signed on its behalf by:
Frank Waters
Chief Executive Officer The notes on pages 80 to 115 form an integral part of these financial statements.
75
Bigblu Broadband plc
Consolidated Statement of Cash Flows
For the year ended 30 November 2023
Loss after tax from Continuing operations
Loss after tax from Discontinued operations
Loss for the year including discontinued operations
Adjustments for:
Interest charge
Amortisation of intangible assets
Impairment charges
Depreciation of property, plant and equipment - owned assets
Depreciation of property, plant and equipment - ROU assets
Tax (credit) / charge
Share based payments
Foreign exchange variance and other non-cash items
Decrease / (Increase) in inventories
Increase in trade and other receivables
Increase / (Decrease) in trade and other payables
Gain on disposals of fixed assets
Cash generated from operations
Interest paid
Tax paid
Net cash inflow / (outflow) from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of business
Purchase of other intangibles
Proceeds from sale of property, plant and equipment
Proceeds from sale of subsidiary
2023
£’000
(1,438)
(3,263)
(4,701)
287
1,676
2,558
690
712
(529)
-
218
406
(826)
1,763
(39)
2,215
(258)
(297)
1,660
(462)
(2,757)
(9)
62
-
2022
restated
£’000
125
(3,059)
(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
Notes
7
11
10 & 11
10
10
8
25
10
11
11
13
Net cash (outflow) / inflow generated from investing activities
(3,166)
200
Financing activities
Proceeds from issue of ordinary share capital
Loans received
Principal elements of lease payments
Net cash inflow / (outflow) generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Less cash held for sale
Cash and cash equivalents at end of year
39
2,100
(691)
1,448
(58)
4,195
(505)
3,632
14
-
(708)
(694)
(1,006)
5,201
-
4,195
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 adjusted net debt on page 19 of the Strategic
Report. The notes on pages 80 to 115 form an integral part of these financial statements.
76
Bigblu Broadband plc
Company Statement of Cash Flows
For the year ended 30 November 2023
Loss for the year
Adjustments for:
Interest charge
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 operations
Interest paid
Net cash outflow from operating activities
Investing activities
Proceeds from sale of subsidiary
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (used) / generated in investing activities
Financing activities
Proceeds from issue of ordinary share capital
Loans received
Principal elements of lease payments
Net cash inflow 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 80 to 115 form an integral part of these financial statements.
2023
£’000
2022
£’000
(2,670)
(13,599)
229
1,714
18
50
-
(1,184)
(479)
(2,322)
(199)
(2,521)
-
(4)
1
(3)
39
2,100
(29)
2,110
(414)
768
354
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
77
Bigblu Broadband plc
Consolidated Statement of Changes in Equity
For the year ended 30 November 2023
Share
capital
£’000
Share
premium
£’000
Note
Capital
redemption
reserve
£’000
Share
option
reserve
£’000
Retained
losses
£’000
Foreign
exchange
reserve
£’000
Reverse
acquisition
reserve
£’000
Listing
cost
reserve
£’000
Total
equity
£’000
At 1 December 2021
8,749
8,589
26,120
Loss for the year
Issue of shares
Equity settled share-
based payments
25
Other comprehensive
expense
-
14
-
-
-
-
-
-
-
-
-
-
-
-
-
309
(2,934)
-
-
-
-
-
-
206
(116)
-
-
-
-
-
-
-
-
(2,934)
14
309
90
(21,581)
(2,430)
(3,317)
(219)
15,911
At 30 November 2022
8,763
8,589
26,120
309
(24,309)
(2,546)
(3,317)
(219)
13,390
Loss for the year
Issue of shares
21
Other comprehensive
expense
-
20
-
-
19
-
-
-
-
-
-
-
(4,701)
-
-
-
-
(406)
-
-
-
-
-
-
(4,701)
39
(406)
At 30 November 2023
8,783
8,608
26,120
309
(29,010)
(2,952)
(3,317)
(219)
8,322
The notes on pages 80 to 115 form an integral part of these financial statements.
78
Bigblu Broadband plc
Company Statement of Changes in Equity
For the year ended 30 November 2022
Share
capital
£’000
Share
premium
£’000
Note
Capital
redemption
reserve
£’000
Share
option
reserve
£’000
Listing
cost
reserve
£’000
Retained
profits/
(losses)
£’000
Total
equity
£’000
8,749
8,589
26,120
-
14
-
21
25
-
-
-
-
-
-
-
-
-
309
(219)
2,681
45,920
-
-
-
(13,599)
(13,599)
-
-
14
309
8,763
8,589
26,120
309
(219)
(10,918)
32,644
-
20
-
19
-
-
-
-
-
-
(2,670)
(2,670)
-
39
8,783
8,608
26,120
309
(219)
(13.588)
30,013
At 30 November
2021
Loss for the year
Issue of shares
Equity-settled share-
based payments
At 30 November
2022
Loss for the year
Issue of shares
21
At 30 November
2023
The notes on pages 80 to 115 form an integral part of these financial statements.
79
Bigblu Broadband plc
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 2023 were authorised for issue by the Board on 17 May 2024 and the balance sheets signed
on the Board’s behalf by Frank Waters.
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 (IASB) and Interpretations (collectively IFRSs). The financial statements have been
prepared on the historical cost basis.
The consolidated financial statements are for the 12 months to 30 November 2023. 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
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 3 to 32. The financial position of the Group, its cash
flows and liquidity position are described in the Finance Review on pages 10 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.
80
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Going concern continued
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 16, of £4.5m (2022: £4.1m), and with cash
inflow from operations before interest, tax and capital expenditure, of £5.3m (2022: inflow of £0.7m). Net
cash at 30 November 2023 was £2.0m (FY22: £4.2m) after the payment of £2.5m following the acquisition
of the customers of Harbour (Uniti) in February 2023. The Group also has a undrawn RCF of £7.9m with
Santander as at 30 November 2023, from an agreed facility of £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.
Following a full market exercise undertaken by independent advisors the Board agreed a Management
Buy Out (MBO) of the business by local management. In arriving at this decision the Board recognised
the early stage of the turnaround of the Norwegian business as well as the potential need for further cash
investment to grow the business far less support any further demounting and migration projects as the
Norwegian operations sought to continue its transition to an asset light business. In addition, the disposal
of the Norwegian business allows the Board to reduce annual central costs by c.£0.4m and focus on
realising value from the Australian Operations and the retained stake in Quickline.
Revenue
Revenue is recognised at an amount that reflects the consideration to which the entity expects to be
entitled in exchange for transferring goods or services to a customer net of sales taxes and discounts.
The Group principally obtains revenue from providing the following telecommunications services: airtime
usage, rental of equipment and other service charges, connection fees, and equipment sales and IP
address sales. IP sales are recognised as revenue, and not other income, due to the IP address being
part of the original purchase price of activated customers, which is consistet with prior year. 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.
81
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (Continued)
Service charges include rental of equipment where the customer has not purchased it outright. The
performance obligation is fulfilled by ongoing availability of the equipment in a working condition and is
accounted for over the contracted period during which the customer has the right of use. Usually, rental
charges are made monthly in advance. Where the period charged for includes a number of days after the
end of the accounting period, we treat the revenue for those days as being deferred, calculated on a
prorated daily basis. Other service charges also include sundry fees, such as charges for non-return of
rental equipment, all of which are accounted for at a point in time when the relevant performance obligation
is satisfied by an identified action (see below in this section for further detail).
Connection fees refer to the installation of Satellite or Fixed Wireless receiving equipment charged to our
customer, plus revenue received from our third-party satellite providers in the form of an activation rebate
for every new connection. Distinct performance obligations apply to each of these charges, and we
account for the revenue at a point in time when the relevant action to satisfy these obligations is
performed. The primary driver of this revenue is the activation of the services on our suppliers’ networks.
Equipment sales primarily refer to the purchase of all hardware purchased by the customer and typically
includes such items as satellite dishes, modems, transmit and receive integrated assemblies (“TRIA’s”),
poles and routers or other similar equipment. The performance obligation is to deliver the product or
products to the customer as distinct from activating a customer to the broadband service. Such products
are typically despatched same day or within 24 hours and so we account for these despatches as revenue
at the point in time when delivery to the customer is performed and the performance obligation is complete.
However, note that in the majority of the group’s contracts equipment is supplied to customers in
exchange for a periodic rental, which is subject to a different performance obligation as described above.
Foreign currency
For the purpose of the consolidated financial statements, the results and financial position of each Group
company are expressed in Pounds Sterling, which is the functional currency of the Group, and the
presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than
the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on
the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-
monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary
items, are included in profit and loss for the year.
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.
82
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Property, plant and equipment
Property, plant, and equipment are stated at cost less accumulated depreciation and impairment losses,
if any.
Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets
over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle
or is retired from active use unless the asset is fully depreciated.
Land
Building improvements
Fixtures, fittings & infrastructure 10% - 25% on cost
IT hardware and software
Motor vehicles
Rental Stock
25% on cost
25% on cost
25% on cost
0% on cost
20% on cost
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at
the end of each reporting year to ensure that the amounts, method and years of depreciation are
consistent with previous estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of the property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred, and it is probable that the future economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying
amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant
and equipment are recognised in profit or loss as incurred. Gains or losses on disposal are included in
Statement of Comprehensive Income.
Goodwill
Goodwill on acquisitions comprises the excess of the aggregate of the fair value of the consideration
transferred, the fair value of any previously held interests, and the recognised value of the non-controlling
interest in the acquiree, over the net of the acquisition date amounts of the identifiable assets acquired
and liabilities assumed.
Goodwill is carried at cost less accumulated impairment losses. Goodwill is tested for impairment annually
or more frequently if events or changes in circumstances indicate a potential impairment and using
discount cashflow valuations based on future operating profits. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold.
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
83
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Intangible assets recognised in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date.
Amortisation is charged to profit or loss on a straight-line basis (Within administration expenses) over the
estimated useful lives of the intangible asset unless such lives are indefinite. These charges are included
in other expenses in profit or loss. Intangible assets with an indefinite useful life are tested for impairment
annually. Other intangible assets are amortised from the date they are available for use. The useful lives
are as follows:
• Customer Contracts – 2 years
Intellectual Property – 3 years
•
Investments
Investments are recorded at cost. Investments are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be fully recoverable. Investments in subsidiaries
are stated at cost and reviewed for impairment on an annual basis. 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, demand deposits, funds held in escrow 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.
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.
84
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Impairment of Non-Financial Assets
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.
Where share options and warrants are issued to providers of other services or financing, the fair value
ascribed to such services or financing is attributed to the options and recognised over the provision of the
relevant obligation.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can
be made of the amount of the obligation.
Where it is considered possible, rather than probable, that the Group will be required to settle an obligation
arising from a past event, or the amount required to make settlement cannot be reliably estimated, a
contingent liability is disclosed but no associated amount is recognised in the Balance sheet. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the Balance Sheet date, taking into account the risks and uncertainties surrounding the obligation, its
carrying amount is the present value of those cash flows (when the effect of the time value of money is
material).
85
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1. Accounting Policies (continued)
Financial Instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a financial
asset, a financial liability, or an equity instrument in accordance with the substance of the contractual
arrangement. Financial instruments are recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial instruments are recognised initially at fair value plus transactions
costs that are directly attributable to the acquisition or issue of the financial instrument, except for financial
assets at fair value through profit or loss, which are initially measured at fair value, excluding transaction
costs (which is recognised in profit or loss). Financial assets are de-recognised when the rights to receive
cash flows from the investments have expired or have been transferred and the Group has transferred
substantially all risk and rewards of ownership.
Equity Instruments
Equity instruments issued by the Group are recorded at the value of proceeds received, net of costs directly
attributable to the issue of the instruments.
Leases
As a lessee
The Group leases various offices, warehouses, items of equipment and vehicles. Bigblu Norge also lease
space for locating equipment for their fixed wireless network infrastructures and fibre comprising part of
their backbone networks.
As indicated above the Group 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.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the
commencement date, discounted by using the rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate
is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar
terms, security and conditions.
86
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Leases (continued)
Lease payments included in the measurement of the lease liability comprise:
•
•
Fixed lease payments (including in-substance fixed payments), less any lease incentives.
variable lease payment that are based on an index or a rate, initially measured using the index or
rate as at the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that
option.
•
•
•
The lease liability is included in payables in the Statement of Financial Position under either Current or
Non-Current Liabilities according to when the future lease payments fall due.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and by reducing the carrying amount to reflect the
payments made.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term
on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset’s useful life.
The right-of-use assets are included in Property, plant and equipment in the Statement of Financial
Position.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets
are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with
a lease term of 12 months or less. Low-value assets comprise rental of small amounts of space for locating
network infrastructure equipment and small items of office equipment. During 2023 the amount accounted
for as low value assets was £25k (2022: £25k) 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.
87
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of
Comprehensive Income, except that a charge attributable to an item of income and expense recognised
as other comprehensive income or to an item recognised directly in equity is also recognised in other
comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or
substantively enacted by the reporting date in the countries where the Group operates and generates
income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not
reversed by the Statement of Financial Position date, except that:
• The recognition of deferred tax assets is limited to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other future taxable profits; and
• Any deferred tax balances are reversed if and when all conditions for retaining associated tax
allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of
business combinations, when deferred tax is recognised on the differences between the fair values of
assets acquired and the future tax deductions available for them and the differences between the fair
values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined
using rates and laws that have been enacted or substantively enacted by the reporting date.
Employee Entitlements
Liabilities for wages and salaries, including non-monetary benefits for annual leave, which is expected to
be settled within 12 months of the reporting date are recognised in other payables in respect of employee’s
services up to the reporting date and are measured at the amounts expected to be paid when the liabilities
are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable. The liabilities for employee entitlements are carried at the present
value of the estimated future cash flows.
Pensions
The Group operates a defined contribution scheme, the pension cost charge represents the contributions
payable.
Research & Development
Expenditure incurred at the research stage is written off to the income statement as an expense when
incurred. An intangible asset arising from development is capitalised when the Company demonstrates
technical feasibility of completing the intangible asset, intention to complete and use or sell the asset,
ability to use or sell the asset, existence of a market or, if to be used internally, the usefulness of the asset,
availability of adequate technical, financial, and other resources to complete the asset and the cost of the
asset can be measured reliably.
88
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
1.
Accounting Policies (continued)
Critical accounting judgements and key areas of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectation of future events that are believed to be reasonable under the circumstances
(a) Property, plant and equipment
Depreciation is derived using estimates of its expected useful life and residual value, which are
reviewed annually. Management determines useful lives and residual values based on experience
with similar assets.
(b) 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 loss 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.
The judgement required for treatment of a discontinued business is based on the Board's assessment
of whether the conditions laid out by IFRS 5 were met at the balance sheet date, in particular if a
disposal transaction was considered highly probable at that point in time.
(c) 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.
(d) Forecasting
The Group prepares medium-term forecasts based on Board approved budgets and 3-year financial
models. These are used to support judgements in the preparation of the Group’s financial statements
including the decision on whether to recognise deferred tax assets and for the Group’s going concern
assessment.
(e) 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 discounted cash flow performance against the carrying value
of the Goodwill. In addition goodwill is valued with reference to the assessed fair value of the cash
generating unit to which it relates. During the year there was a material impairment of goodwill due to
the result of estimates made and judgements applied (Note 11). 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
89
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
Accounting Policies (continued)
Critical accounting judgements and key areas of estimation uncertainty (continued)
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.
(f) 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.
(g) 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.
(h) Recoverable value of investments in subsidiaries and amount due from group undertaking
If expected future cash flows cannot be reliably measured or are lower than the assessed fair value
of investments in subsidiaries and amounts owed from group undertakings, then the fair value amount
is recognised as the carrying value. The assessment of fair value (less costs to sell) is made with
reference to assumptions around enterprise value and any adjustment to derive an equity value. Such
estimations are inherently uncertain and may ultimately materially differ from carrying values
recognised in the financial statements.
(i) 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. The extent of tax losses and timing of release is an estimate and
may materially differ.
(j) 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.
90
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
A key judgement made by the Directors is in assessing the degree of reliability of valuation indicators. In
making a determination of the appropriate fair value at which to recognise equity investments, valuation is
based on the most reliable indicators identified
2. Continuing Operations Revenue
Recurring revenue - airtime
Recurring revenue - other
Other non recurring revenue
2023
£’000
23,962
220
1,755
2022
£’000
25,367
101
1,724
25,937
27,192
Other non recurring revenue includes the sale of stock, routers, service recharges and the sale of IP
addresses. Such service recharges are set out in note 24. Given the changing nature of the new products
in the Group, from time to time, the Group will have retained IP addesses from churned customers that
result in being sold, but less regularly. These IP address are in general purchased with new customers,
when activated, which in part represent the cost base to serve the customers, and is normal on-going
trading
Segmental split of Continuing Operations Revenue:
The Group’s continuing operations are located in Australia 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 Executive
Officer. The Group’s revenue from external customers, and the non-current assets by geographical
location is detailed below:
United Kingdom
Rest of World
External revenue by
location of customer
Non-current assets by
location of assets
2023
£’000
534
25,403
2022
£’000
681
26,511
2023
2022
£’000 £’000
8,691
5,300
6,078
6,128
13,991
In order to present relevant information, non-current assets by location have been re-presented for the
purposes of this note only, so as to compare the continuing revenue as analysed by region.
25,937
27,192
12,206
91
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
3.
Profit from Group Operations
Continuing operations
2022
£’000
2023
£’000
Discontinued operations
2023
£’000
2022
£’000
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)
Impairment charges
Share based payments (Note 25)
Wages & salaries and social security costs (Note 5)
Profit on disposal of Fixed Assets
Impairment of Fixed Assets
Foreign exchange movement
Pension costs (Note 5)
338
259
1,515
147
-
4,033
(32)
-
233
235
771
285
425
-
309
4,065
-
-
(206)
242
352
453
161
2,083
-
1,358
(7)
328
-
23
544
476
277
-
-
1,565
-
966
-
27
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
5. Staff Costs
2023
£’000
2022
£’000
81
8
89
77
7
84
The aggregate remuneration of all employees (including directors), for continuing and discontinued
operations comprised:
Wages and salaries
Social security costs
Pension costs
Continuing operations
2023
£’000
2022
£’000
Discontinued operations
2022
£’000
2023
£’000
3,763
270
235
4,268
3,738
327
242
4,307
1,184
175
23
1,382
1,420
146
27
1,593
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:
Operating staff
Sales Staff
Management and administrative staff
Continuing operations
2022
39
9
19
67
2023
38
8
14
60
Discontinued operations
2023
10
4
4
18
2022
14
4
5
23
92
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
6.
Directors’ Remuneration
Salaries
Benefits
Pension costs
2023
£’000
2022
£’000
768
13
22
975
11
20
803
1,006
The highest paid director’s aggregate remuneration was £326k (2022: £421k) including pension
contributions of £11k (2022: £9k). Details of directors’ remuneration, including pension contributions, are
set out in the Directors’ Report on page 37. The salaries include bonuses of Nil (FY22: £50k) charged to
discontinued operations.
7. Finance Costs
Bank interest payable
Other interest
Lease interest expense
Total interest payable
Other finance costs
Total finance costs
2023
£’000
2022
£’000
227
4
6
237
1
238
38
6
18
62
2
64
Interest payable on the Revolving Credit Facility is 3.40% (FY22: 3.40%) + SONIA (Sterling Overnight
Index Average) (FY22: SONIA). Interest paid in the year amounts to £0.23m (FY22: £0.04m)
93
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
8.
Taxation
a) Tax (credit) / charge for the year
UK Corporation tax
Overseas corporation tax
Deferred tax (credit) / charge
Current tax (credit) / charge
b) Tax reconciliation
2023
£’000
-
-
(529)
2022
£’000
-
554
477
(529)
1,031
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 23.01% (2022: 19%)
Tax effect of expenses that are not deductible in determining taxable profit
Adjustment for prior periods
Temporary timing differences
Deferred tax not recognised 1
Foreign tax rate differences
Changes in deferred tax rate
2023
£’000
2022
£’000
(5,230)
(1,783)
(1,203)
404
-
(98)
738
(370)
-
(339)
194
-
1,185
(9)
-
Tax (credit) / charge at effective tax rate for the year
(529)
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 20, is as follows:
Deferred tax asset
Deferred tax liability
Factors affecting future tax charges
2023
£’000
800
(616)
184
2022
£’000
303
(646)
(343)
The UK Finance Act 2022 received royal assent on 24 February 2022. This legislation maintained the UK
corporation tax rate at the same level as in the year commencing at 19% for the years commencing 1 April
2021 and 1 April 2022, increasing the rate to 25% in the year commencing 1 April 2023.
There were unused tax losses of £12.1m at 30 November 2023 (£11.6m at 30 November 2022). A deferred tax
liability relating to timing differences has been recognised. A deferred tax asset of £0.8m has been recognised
in Australia which includes carried forward tax losses at the applicable local tax rate of £0.5m (2022: £nil). See
note 20 for further details. No deferred tax asset recognised in the UK due to the uncertainty surrounding
utilisation of existing tax losses against future taxable profits.
94
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
9.
Earnings / (Loss) Per Share
Basic earnings per share is calculated by dividing the profit / (loss) attributable to shareholders by the
weighted average number of ordinary shares in issue during the year.
30 November 2023
Profit/(Loss)
£’000
Weighted
Average
Number of
Shares
Per Share
Amount
Pence
Basic EPS - Loss attributable to shareholders
(4,701)
58,524,645
(8.0)
Add back loss from discontinued operations
Add back exceptional costs
Adjusted Profit attributable
continuing operations
to shareholders
from
Add back amortisation and impairment of intangible assets
Adjusted EPS – Adjusted Profit attributable to shareholders
from continuing operations1
3,263
3,929
2,491
1,662
4,153
58,524,645
Diluted EPS – Loss attributable to shareholders
(4,701)
58,820,176
7.1
(8.0)
Adjusted Diluted EPS – Adjusted Profit attributable to
shareholders from continuing operations as above1
4,153
58,820,176
7.1
30 November 2022
Weighted
Average
Number of
Shares
Per Share
Amount
Pence
Profit/(Loss)
£’000
(2,934)
58,376,211
(5.0)
Basic and diluted EPS
Basic EPS - Loss attributable to shareholders
Add back loss from discontinued operations
Add back exceptional costs
Add back share based payments
Adjusted Profit attributable to shareholders from
continuing operations
Add back amortisation
Adjusted EPS – Adjusted Profit attributable to shareholders
from continuing operations1
3,059
2,271
309
2,705
444
3,149
58,376,211
Diluted EPS – Profit attributable to shareholders
(2,934)
58,828,959
5.4
(5.0)
Adjusted Diluted EPS – Adjusted Profit attributable to
shareholders from continuing operations as above
3,149
58,828,959
5.4
1 Non-GAAP alternative performance measurement, the profit attributable to shareholders from continuing
operations is £4.2m (2022: £3.2m profit) after adding back exceptional costs £3.9m (FY22: £2.3m), share
based payments (FY22: £0.3m), impairment of Fixed Assets £0.1m (FY22: Nil) and amortisation £1.5m
(FY22: £0.4m). Adjusted EPS and adjusted diluted EPS are alternative non-GAAP performance
measures.
95
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
10.
Property, Plant & Equipment – Group
Land
&
Buildings
£’000
Fixtures,
Fittings &
IT
Hardware
Motor
Infrastructure & Software Vehicles
£’000
£’000
£’000
Cost
At 1 December 2021
Exchange Differences
Additions
Disposals
Reclassification as
intangible assets
1,139
13,250
1,081
61
275
(614)
-
321
1,157
(436)
-
36
490
(59)
(368)
At 30 November 2022
861
14,292
1,180
Exchange Differences
Additions
Disposals
Reclassification as assets
(62)
2
(49)
(2,756)
739
(2,396)
held for sale
(158)
(9,690)
At 30 November 2023
594
189
Accumulated Depreciation
At 1 December 2021
745
10,406
Exchange Differences
Depreciation charge
Asset impairment
Disposals
Reclassification as
intangible amortisation
43
224
-
(545)
-
270
1,527
966
(433)
-
At 30 November 2022
467
12,736
Exchange Differences
Depreciation charge
Assets Impairment
Disposals
Reclassification as assets
(42)
225
-
(44)
(2,598)
810
328
(2,158)
held for sale
(110)
(8,980)
At 30 November 2023
496
138
Net book value
At 30 November 2023
98
51
At 30 November 2022
394
1,556
96
(76)
20
(1)
(130)
993
453
13
295
-
(58)
(71)
632
(53)
313
-
(1)
(92)
799
194
548
Rental
Stock
£’000
Total
£’000
217
15,699
3
152
-
421
2,108
(1,109)
-
(368)
372
16,751
(41)
78
(89)
(2,936)
841
(2,580)
(237)
(10,217)
83
1,859
-
11,609
-
9
-
-
-
9
(1)
41
-
-
326
2,076
966
(1,036)
(71)
13,870
(2,695)
1,402
328
(2,241)
(1)
(9,183)
48
1,481
35
378
12
-
34
-
-
46
(1)
2
(45)
(2)
-
5
-
21
-
-
-
26
(1)
13
-
(38)
-
-
-
20
363
2,881
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
10. Property, Plant & Equipment – Group (continued)
Right of Use assets
Group Property, Plant & Equipment includes the following values for Right of Use assets
Cost
At 1 December 2021
Exchange Differences
Additions
Disposals
At 30 November 2022
Exchange Differences
Additions
Disposals
Reclassification as assets
held for sale
At 30 November 2023
Accumulated Depreciation
At 1 December 2021
Exchange Differences
Depreciation charge
Disposals
At 30 November 2022
Exchange Differences
Depreciation charge
Disposals
Reclassification as assets
held for sale
At 30 November 2023
Net book value
At 30 November 2023
At 30 November 2022
IT
Hardware
& Software
£’000
57
-
149
(58)
148
(18)
-
-
Total
£’000
5,054
116
771
(1,107)
4,834
(411)
379
(2,316)
(130)
(1,798)
-
688
42
-
62
(58)
46
(10)
56
-
(92)
-
-
3,801
86
761
(1,036)
3,612
(310)
712
(2,173)
(1,276)
565
123
102
1,222
Land
&
Fixtures, Fittings
&
Buildings
Infrastructure
£’000
3,914
58
355
(435)
3,892
(334)
379
(2,287)
(1,510)
140
3,045
44
487
(432)
3,144
(261)
444
(2,148)
(1,074)
105
35
748
£’000
1,083
58
267
(614)
794
(59)
-
(29)
(158)
548
714
42
212
(546)
422
(39)
212
(25)
(110)
460
88
372
97
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
11.
Intangible Assets -
Group
Customer
Cost
At 1 December 2021
Additions
Acquisition of customer base
Reclassification of PPE
Exchange Difference
At 30 November 2022
Additions
Acquisition of customer base
Exchange Difference
Reclassification as assets held
for sale
Goodwill Contracts Software
£’000
£’000
£’000
5,523
-
-
-
138
5,661
-
-
(197)
3,935
-
907
-
177
5,019
-
2,455
(478)
53
241
-
368
(7)
655
9
-
(74)
Intellectual
Property
£’000
Total
£’000
-
-
985
-
-
985
-
-
(65)
9,511
241
1,892
368
308
12,320
9
2,455
(814)
(2,083)
-
(537)
-
(2,620)
At 30 November 2023
3,381
6,996
53
920
11,350
Accumulated Amortisation
At 1 December 2021
Amortisation
Reclassification of PPE
Exchange Differences
At 30 November 2022
Amortisation
Impairment charges1
Exchange Differences
Reclassification as assets held
for sale
At 30 November 2023
Net book value
At 30 November 2023
At 30 November 2022
-
-
-
-
-
-
2,083
-
3,935
378
-
182
4,495
1,491
-
294
71
(3)
362
179
(398)
(53)
-
30
-
-
30
6
147
(10)
3,935
702
71
179
4,887
1,676
2,230
(461)
(2,083)
-
(452)
-
(2,535)
-
5,588
3,381
5,661
1,408
524
36
17
293
173
747
955
5,797
5,553
7,433
1Impairment charges are recognised in the discontinued operations.
98
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
Acquisition of customer base
The fully owned Australian subsidiary of the Company, SkyMesh PTY LTD, completed the acquisition of
customers and certain business assets from Harbour ISP PTY LTD, a subsidiary of Uniti Group LTD in
December 2022. This has not be treated as a business combination as the acquisition was specific to the
purchase of only a customer base.
Customer Contracts
Total consideration
Satisfied by:
Cash
Annual test for impairment
Cost of Addition
£’000
2,455
-------------
2,455
======
2,455
======
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 by considering value-in-use
calculations, or fair value assessments. The value in use 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 FY24 and FY25. 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 8.2% (FY22: 8.3%). This discount rate was calculated using a pre-tax rate based on the
weighted average cost of capital for the Group.
The Directors consider that there are no reasonably foreseeable changes in performance of discount rate that
would eliminate goodwill.
As at 30 November 2023 the carrying amount of goodwill is its recoverable amount, being £nil (FY22: £2.1m) in
respect of Brdy AS, which was held for sale at the reporting date, this was determined using a deemed fair value
less cost to sell assessment and £3.4m (FY22: £3.6m) in respect of SkyMesh, calculated by considering value-
in-use. Recognition of impairment losses was £2.1m (FY22: £nil). Impairment charges for Brdy are included in
the discontinued loss in the Statement of comprehensive income.
99
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
12. Investments
Subsidiaries
Other equity investments
Loan notes
Opening balance
Movements during the year:
Investment in subsidiary
Loan note interest
Impairment charge
Reclassified as held for sale
Group
2023
£’000
-
2,240
3,755
5,995
Group
2022
£’000
-
2,240
3,590
5,830
Company
2023
£’000
Company
2022
£’000
25,000
2,240
3,755
27,083
2,240
3,590
30,995
32,913
5,830
5,672
32,913
44,201
-
165
-
-
-
158
-
-
4,040
165
(5,956)
(167)
-
158
(11,446)
-
5,995
5,830
30,995
32,913
During the year the balance of £4.0m due to the Company by Brdy Infrastructure AS was capitalised thereby
increasing the investment by the Company in its existing subsidiary.
The carrying value of the investment in Brdy Infrastructure AS held by the Company at 30 November 2023
was reduced by an impairment charge of £2.1m (FY22: £11.4m). The carrying value as at the 30 November
2023 was £0.2m (FY22: £2.1m). There were no 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.
100
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
______________________________________________________________________________________
12. Investments (continued)
Subsidiary Undertakings
Address & Country of
Incorporation
Class of
Share
Brdy AS
Rosenholmveien 25, 1414
Trollåsen, Norway
Ordinary Bigblu Broadband
plc
Brdy Nordics AS
Rosenholmveien 25, 1414
Trollåsen, Norway
Ordinary Bigblu Broadband
plc
SkyMesh Pty Ltd
51 Alfred Street, Fortitude Valley
QLD 4006, Australia
Ordinary Bigblu Broadband
plc
BorderNET
Internet Pty Ltd
51 Alfred Street, Fortitude Valley
QLD 4006, Australia
Ordinary SkyMesh Pty Ltd
Brdy Broadband
Limited
Tompkins Wake, Level 11, 41
Shortland Street, Auckland,
1140, New Zealand
Ordinary SkyMesh Pty Ltd
13. Discontinued operations
Parent Company
No of Shares % held
by
parent
100%
100%
100%
100%
100%
1,700,412 of
1.40 Nok
each
30,000 of
1Nok each
20,898,680 of
£0.196 each
2,863,105 of
£0.09 each
100 of NZ$1
each
Following a full market exercise undertaken by independent advisors the Board announced a Management
Buy Out (MBO) of the Norwegian business, Brdy AS and Brdy Nordics AS, by local management,
supported by Andrew Walwyn. The Board believe that this disposal was in the best interests of
shareholders. In arriving at this decision, the Board recognised the challenges being faced in the
turnaround of the Norwegian business as well as the potential need for further cash investment to grow
the business far less support any further demounting and migration projects as the Norwegian operations
sought to continue its transition to an asset light business. In addition, the disposal of the Norwegian
business allows the Board to reduce annual central costs by c.£0.4m (including the costs associated with
Andrew’s position as CEO).
The Board considers that the sale process commenced prior to 30 November 2023 and at the balance
sheet date, it was considered highly probable it would complete within 12 months of this date.
Consequently, Brdy AS and Brdy Nordics AS are classified as a disposal group and discontinued
operations for the year ended 30 November 2023.
The Disposal Group
Group financial information for 2023 is set out below for the disposal group. 2022 comparative information
in the Financial Statements has been adjusted to reflect the revised split of activities between continuing
and discontinued operations.
101
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
________________________________________________________________________________________
__________________________________________________________________________________
13. Discontinued operations (continued)
Financial performance and cash flow information
Revenue
Expenses
Loss before tax
Taxation on operations
Loss after tax of discontinued operations
Loss on sale of the subsidiary after tax (see below)
Loss from discontinued operations
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net cash outflow from discontinued operations
Details of sale of subsidiary
Expenses of sale
Loss on sale after tax
Group
2023
£’000
4,157
(7,420)
2022
£’000
4,028
(6,264)
(3,263)
-
(3,263)
-
(3,263)
830
(424)
(408)
(2)
-
-
(2,236)
(703)
(2,939)
(120)
(3,059)
1,668
(1,058)
(557)
(53)
(120)
(120)
In 2022 additional expenses of sale in respect of the disposal of Quickline in 2021 were incurred.
As at 30 November 2023 the operations of Brdy AS and Brdy Nordics AS were classified as held for sale
and therefore no details of their sale are included here since no sale was concluded as at the date of
signature of these accounts. The carrying value of Goodwill was impaired by £2.1m in the year, with a
remaining carrying value as at 30 November 2023 of £nil. There was also an impairment of Fixed Assets
for £0.3m in the year.
Assets and liabilities of disposal group held for sale
Assets classified as held for sale
Property, plant and equipment
Intangible assets
Inventory
Cash
Trade receivables
Other receivables
Total assets of disposal group held for sale
Liabilities directly associated with assets classified as held for
sale
Trade payables
Lease liabilities
Other payables
Total liabilities of disposal group held for sale
2023
£’000
1,034
85
615
505
67
210
2,516
(1,066)
(573)
(710)
(2,349)
2022
£’000
-
-
-
-
-
-
-
-
-
-
The cumulative foreign exchange losses recognised in other comprehensive income in relation to the
discontinued operation as at 30 November 2023 were £0.7m (FY22: £0.5m).
102
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
___________________________________________________________________________________________
14. Cash and cash equivalents
Cash and bank accounts
Cash in escrow – restricted cash
Group
Company
2023
£’000
2,782
850
3,632
2022
£’000
4,195
-
4,195
2023
£’000
354
-
354
2022
£’000
768
-
768
Escrow cash was held by a third party as at 30 November 2023 on behalf of the
Group for a completed sales transaction relating to the sale of IP address. These
funds were remitted on 1 December 2023 as cleared funds.
15.
Inventory
Finished goods
Group
2023
£’000
111
2022
£’000
1,142
There is no material difference between the amounts stated above and replacement cost.
Write down of inventories to net realisable value amounted to £29k (2022: £43k) all related to discontinued
operations. £11k (FY22: £18k) was recognised as an expense during the year, included in expenses of
the disposal group. There were no such write downs in the parent company.
103
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
_____________________________________________________________________________________________
16. Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued
income
Amounts due from group
undertakings
Group
2023
£’000
1,432
830
568
-
2022
£’000
773
506
1,056
Company
2023
£’000
2022
£’000
112
-
230
-
1,796
52
-
80
822
2,830
2,335
2,138
954
Movement in provision for impairment of receivables
Individually impaired
As at 1 December 2022
Charged to Income statement – continuing business
Charged to Income statement – discontinued operations
Utilised
As at 30 November 2023
2023
£’000
124
483
66
(508)
165
2022
£’000
28
238
-
(142)
124
The average credit days taken on sales of goods and services is 14 days (2022: 9 days). No interest is
charged on receivables. Trade receivables are provided 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 balances with a carrying amount of £452k (2022:
£378k) which are past due at the reporting date. The directors consider that the amount of trade receivable
carried are approximate to their fair value.
As at 30 November 2023
Gross trade receivables
Loss provision
Expected loss rate
As at 30 November 2022
Gross trade receivables
Loss provision
Expected loss rate
Current
£’000
0-3
months due
£’000
3-6
months
due £’000
Over 6
months due
£’000
757
0
0%
495
0
0%
538
14
3%
183
15
8%
227
113
50%
170
85
50%
75
38
50%
49
24
50%
Total
£’000
1,597
165
897
124
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 2023 or 1 December 2023 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.
104
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
____________________________________________________________________________________________
17. Trade and other payables
Current
Trade payables
Other taxes and social security
Other payables
Accruals and deferred income
Lease liabilities
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
5,790
564
233
1,013
143
7,743
4,223
924
534
2,363
795
8,839
127
259
-
541
13
940
124
370
-
918
29
1,441
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The
average creditors days taken for trade purchases is 70 days (2022: 77 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. Discussions around specific claims and warranties from previous disposal transactions
are still ongoing. As in 2022, the provisions as at 30 November 2023 are uncertain, however 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
Total provisions
Group
and Company
2023
£’000
685
685
Group
and Company
2022
£’000
685
685
Group
and Company
2023
£’000
685
-
685
Group
and Company
2022
£’000
685
-
685
105
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
18. Loans
Bank loan received during the year
Balance at year end
Group
and Company
2023
£’000
2,100
2,100
Group
and Company
2022
£’000
-
-
During 2022 the unsecured Revolving Credit Facility (RCF) was increased from £5m to £10m. As at 30
November 2023 the company drawdown £2.1m against the RCF, 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.
Interest payable on the Revolving Credit Facility is 3.40% (FY22: 3.40%) + SONIA (Sterling Overnight
Index Average) (FY22: SONIA). Interest paid in the year amounts to £0.23m (FY22: £0.04m).
The facility with Santnader runs until October 2025.
19.
Non-current liabilities
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
Lease liabilities
Total
-
-
559
559
-
-
13
13
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
Group
2023
£’000
-
-
Group
2022
£’000
377
182
-
559
106
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
____________________________________________________________________________________________
_
20.
Deferred Taxation
2023
£’000
2022
£’000
At 1 December
Deferred tax arising on acquisition
Exchange differences
Charged/(Credited) to the Statement of Comprehensive Income
At 30 November
Deferred tax is provided as follows:
Accelerated capital allowances
Arising on business combinations
Pensions and accruals
Tax losses
Geographical split of deferred tax asset/(liability):
Rest of the World deferred tax asset
Rest of the World deferred tax liability
343
-
2
(529)
(184)
-
(615)
291
508
184
800
(616)
184
(696)
562
-
477
343
225
(568)
-
-
(343)
303
(646)
(343)
21.
Share Capital
At 30 November 2022
Shares issued in the year
Shares issued at 15p each
No. of
Shares
No.
58,422,072
Share
Capital
£
8,763,309
Share
Premium
£
8,589,117
129,415
19,412
19,147
At 30 November 2023
58,551,487
8,782,721
8,608,264
All shares issued during the year were as a result of share option exercises generating a total value of
£39k. Split as follows:
In December 2022 Andrew Walwyn purchased 26,549, and Paul Howard purchased 66,666 shares for a
consideration of £33,135, relating to Share Capital £13,988 and Share premium £19,147
In June 2023 a previous employee purchased 36,160 shares, for a consideration of £5,424 relating to
Share Capital.
All issued share capital is fully paid up. All ordinary shares have a par value of £0.15.
107
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
_________________________________________________________________________________________________
22. 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.
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.
Share premium
Share premium represents the excess consideration over nominal value net of issue costs and amounts
to £8.6m (2022: £8.6m).
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.
23. Lease Arrangements
The Group as Lessee
Depreciation of ROU assets
Land & buildings
Fixtures, fittings & infrastructure
Interest expense (included in finance cost)
Continuing operations
2023
£’000
2022
£’000
142
117
259
20
163
122
285
20
The total cash outflow for leases in the continuing operations was £222k (2022: £208k).
108
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
24. Related Party Transactions
Management charges from Parent to the other Group companies
During the year the Company made management charges on an arm’s length basis to its subsidiaries
amounting to £1.6m (FY22: £2.2m) receivable, which eliminates on consolidation.
As part of the reductions in the headcount within the plc during the course of the year, the Company
entered into certain service contracts with Bigblu Operations Limited (“BBO”), a company of which Andrew
Walwyn is a director (the “BBO Contracts”). At the Balance Sheet date there was a receivable of £0.1m
(FY22: £nil) associated with the BBO Contracts. The BBO Contracts are summarised below:
Licence Agreement
The Company has agreed to grant a licence over certain trademarks to BBO in relation to the Brdy brand.
In consideration for the rights granted by the Company to BBO, BBO has agreed to pay the Company a
notional annual license fee for each period of usage for £12k (FY22: £nil).
Service Agreement – Company to BBO
The Company has entered into a service agreement with BBO. The services provided by the Company
to BBO include legal and corporate finance support, IT, marketing, and certain Executive support services
(the “Services”). Costs and expenses are charged on a time and material basis based on the time spend
by individuals performing the Services. This equated to £118k in the last financial year (FY22: £nil).
Service Agreement – BBO to Company
In addition, the Company has entered into a further service agreement with BBO. The services provided
by BBO to the Company primarily include finance, IT and tech support (the “BBO Services”). Costs and
expenses are charged on a time and material basis for the time spend by individuals performing the BBO
Services. This equated to £73k in the last financial year (FY22: £nil).
Products
In the normal course of events the Company has entered into reseller agreements with BBO for certain
broadband products sold by the Company (the “Products”). This equated to £10k in the last financial year
(FY22: £nil).
Post the disposal of the Norwegian operations we anticipate these services to reduce alongside further
plc rationalisations.
Remuneration of key management personnel
The remuneration of the directors, and the key management personnel of the continued 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
109
2023
£’000
781
22
-
803
2022
£’000
986
20
309
1,315
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
____________________________________________________________________________________________
25. 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:
2023
2022
Number of
Share Options
Weighted
Average
Exercise price
Number of
Share
Options
Weighted
Average
Exercise
price
Outstanding at beginning
of year
Exercised during the year
Cancelled during the year
Outstanding at end of year
685,050
(129,415)
(36,831)
518,804
Exercisable at end of year
518,804
35.74p
24.66p
32.24p
38.54p
38.54p
1,567,659
(95,922)
(786,687)
685,050
24.06p
15.00p
15.00p
35.74p
685,050
35.74p
The options outstanding at 30 November 2023 had a weighted average exercise price of 38.54p (2022:
35.74p), and a weighted average remaining contractual life of 4.0 years (2022: 4.7 years).
No new options were granted during the year (2022: Nil).
Long Term Incentive Plan
During 2018 an executive long-term incentive plan (LTIP) was put in place following consultation with a
number of shareholders with performance criteria based on 2 key metrics: 50% based on how the BBB
share price performs and 50% based on how BBB performs against a basket of similar companies. It was
agreed that awards would be considered annually by the Remuneration committee and post the Disposal
all such schemes including Management Incentive Plans would be reviewed for appropriateness.
Awards are granted annually as part of a formal, annual, grant policy:
• within six weeks following the announcement of results; or
• when exceptional circumstances exist (e.g. the normal grant is delayed for some reason or an out of
policy award needs to be granted).
The maximum term of options granted under the LTIP is 10 years from grant date. Expiry dates range
from May 2028 to October 2029. At 30 November 2023 there were a total of 295,531 options outstanding,
with an exercise price of 15p, of which 295,531 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
110
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
____________________________________________________________________________________________
25. Share-Based Payments (continued)
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.
Other Employee Options
The maximum term of options granted under other schemes is 10 years from date of grant, with the
average term remaining 3 years. This term applies to all of the 223,273 options vested as at 30 November
2023 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 Nil (2022: £309k), related to equity-settled share-based
payment transactions as follows:
Share option charge (all related to LTIP)
Total share option expense
Non-Employee Options
2023
£’000
-
-
2022
£’000
309
309
As at 30 November 2023, BGF own c.4.5m shares in BBB, as well as options over 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.
26.
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:
111
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
26.
Financial Risk Management (continued)
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to meet their financial
obligations as they arise while maximising the return to stakeholders. The capital structure of the Group
consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained earnings as disclosed in Notes 20 to 21.
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables and
investments. The Group’s exposure to credit risk is primarily attributable to its trade receivables. Credit
risk is managed locally by the management of each business unit. Prior to accepting new customers,
credit checks are obtained from reputable external sources. The amounts presented in the balance sheet
are net of allowance for doubtful receivables (see note 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 17.
Market risk
Market risk arises from the Group’s use of interest bearing and foreign currency financial instruments. It
is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in interest rates (interest rate risk) or foreign exchange rates (currency risk).
Interest rate risk
The Group finances its operations through a mixture of retained profits, equity capital and bank facilities,
including hire purchase and lease finance. The Group borrows in the desired currency at floating or fixed
rates of interest and may then use interest rate swaps to secure the desired interest profile and manage
exposure to interest rate fluctuations.
Borrowings contractual maturities and effective interest rate analysis
In respect of interest bearing financial liabilities, the table in note 18 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
112
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
26.
Financial Risk Management (continued)
of convenant compliance reporting, which monitors actuals performance by a number of specific monetary
measurements.
Non-interest bearing liabilities
Details of trade and other payables falling due within one year are set out in Note 18.
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.
27. 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
Loans
Total
Group
2023
£’000
3,632
1,432
-
830
5,894
5,790
233
2,100
8,123
Group
2022
£’000
4,195
773
-
506
5,474
4,223
540
-
4,763
Company Company
2022
£’000
2023
£’000
354
112
2,051
-
768
52
822
34
2,517
1,676
127
-
-
127
124
-
-
124
The carrying value of financial instruments is a reasonable approximation of fair value due to the short-
term maturities of these instruments. In additon, there was is a loan note instrument with QCL held at a
fair value of £3.8m.
113
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
28. 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
2023
£’000
(342)
(342)
2022
£’000
(787)
(787)
Revenue recognised during 2023 that was included in the contract liability balance at the beginning of the
year amounted to £0.8m (2022: £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.
29. Post Balance Sheet Events
Starlink
The Company signed a distribution contract with Starlink in December 2023 to provide high-speed internet
to businesses, as well as small office / home office workers. This alongside the One Web contract allows
BBB to offer customers an extended suite of products covering all their needs. To accommodate the
investment of c£2.5m for Starlink post year end we have drawn down further on the Revolving Credit
Facility.
Quickline
Have been awarded 2 contracts under the government’s £5bn Project Gigabit programme. The deal will
subsidise the rollout of a full fibre network to more than 43,000 hard-to-reach rural homes and businesses
across the West Yorkshire and York area, including communities in North and East Yorkshire, which have
been left behind by commercial rollouts. The contracts have been secured by Quickline following
competitive public procurement processes and totals £104m of government subsidy. Quickline will make
further private investment alongside Project Gigabit to roll out its full fibre network to an additional 99,000
premises.
Australia
We are very pleased to announce the appointment of a CFO in Australia, Ray Vaughan. Ray previously
worked with the business between 2016 and 2019 and spent the last 5 years as CFO of Ion Group in
Sydney.
Norway Operations
On the 17 May 2023 the Company completed the disposal of the Norwegian Operations comprising Brdy
AS and Brdy Nordics AS (the “Brdy Group”) to Brdy Holding AS (under construction), a company owned
by the Norwegian Management Team and Andrew Walwyn (the “Buyer”).
Headquartered in Oslo, Norway and established over 15 years ago, Brdy Group provides a range of
Broadband services to both consumers and businesses across the Nordic region. The announced
Enterprise Value of the business units being sold as at 17 May 2024 is £1.3m and the company will write
off intercompany balances as a consequence of the Buyer assuming certain existing net working capital
creditors and contingent liabilities within the Brdy Group amounting to approximately £1.3 million. As a
result, the Equity value of the
114
Bigblu Broadband plc
Notes to the Financial Statements (continued)
For the year ended 30 November 2023
29. Post Balance Sheet Events continued
business units being disposed is £1, being the Initial Consideration. In addition, BBB will be entitled to a
Contingent Consideration as follows: If the Brdy Group,
•
•
in the period between 17th May 2024 and 16th May 2025, achieves an Adjusted EBITDA of five
hundred thousand pounds (£500,000) or more, BBB will receive twenty (20) percent of the Adjusted
EBITDA for that period, within six months of the period.
In the period between 17th May 2025 and 16th May 2026, achieves an Adjusted EBITDA of one
million pounds (£1,000,000) or more, BBB will receive twenty (20) percent of the Adjusted EBITDA
for that period, within six months of the period.
A Deferred Consideration is also payable of up to NOK 2.3m (c£0.2m) on the return, or release of the
deposit held with networks, or a Trigger Event.
In addition, and on the occurrence of a Trigger Event, including a listing an, an additional Consideration
shall be payable of 20% of the proceeds less costs.
30. Ultimate Controlling Party Note
No one shareholder has ultimate control over the business.
115