BigAir full year numbers for FY11 (BGL)

BigAir confirmed earlier guidance by releasing preliminary full-year numbers.

With revenue of $15.5m, BigAir’s EBITDA of $5.4m (up 69%) exceeded guidance of $5.2M with operating cashflow of $5m up 72%.  BGL’s balance sheet is rock solid, with no debt, $2.8m cash, and more integration synergies to follow.  Another important figure to note is annualised EBITDA run rate for July 2011 – because telco services bill regularly, this is a indicative “floor” for the company’s revenue next year.  July’s annualised EBITDA run rate has already grown to $9m, compared with March’s figure of $7.5m – and I expect this increase is a combination of new services and operational synergies increasing margins.

No doubt these new figures will reinvigorate speculation of a dividend for FY12 – a 1c dividend would cost about $1.6M, comfortably funded by current cashflow, but maybe offset by BigAir’s desire to light up Canberra and Wollongong, thereby covering the 10 largest cities in Australia.

Other news is BGL’s student accommodation internet business, which benefits from low connection cost and flexible contract terms – great for users who may only want to connect for a few months.  This business unit is to be re-branded “BigAir Community Broadband”, and BGL are also looking to translate this into the mining accommodation sector, another area which has a large base of short-term customers.

Aside from these new growth avenues BigAir can continue to rely on their core Wimax access business to continue scoring runs and EBITDA growth.  With a current revenue base of $23m against FY11 actual revenue of $15.5m, BGL can expect another cracking year simply by sitting still.  With organic growth, increased penetration into the student market, and the new national opportunities available with Canberra network coverage, BGL are set up for a great FY12.

Amcom FY11 profit announcement (AMM)

Today, Amcom announced FY11 results, putting up some great numbers and confirming both strong demand for their fibre services, and strong growth for their Cloud and Voice offerings.  High level numbers (excluding IIN’s contribution) are as follows:

 

Revenue up 38%

EBITDA up 29%

NPAT up 31%

Operating cashflow up 35%

 

The Fibre business grew 22%, and Business Services (which I’m assuming encompasses Cloud and Voice) rocketed up 285% in revenue and 71% in EBITDA.  If $15.4M of this revenue is from voice, that means Amcom’s cloud business is already contributing $5M.  I would not be at all surprised to see similar growth from the Business Services division for HY12 and FY12, given the amount of cross-sell opportunities to Amcom’s fibre client base.  It’s worth noting that Amnet, the non-synergistic consumer DSL business, showed a decline in revenue and a significant reduction in EBITDA, suggesting the business needs to be offloaded to someone for whom it is core business, iiNet being an obvious buyer.

 

The decision by management not to increase Final dividend suggests they are looking at more acquisitions, although I’m not sure who else they would buy that would integrate nicely with the rest of the business, apart from a data centre operator or dark fibre assets on the east coast.

 

Given the choice of holding IIN and AMM, the decision is easy, with huge growth coming through from their fibre business, and monstrous growth anticipated in the emerging cloud and voice market segments.  The new entity is debt free and throwing off cash like the billy-o.