BigAir released their HY14 numbers today, and while the topline numbers are growing at a steady rate (19% against PCP) the bottom line continues to accelerate with NPAT up 44% and operating cash flow up 25% to $5.6m.
My concerns around a different balance sheet profile don’t seem too big a deal now as management has indicated they will pay down debt facilities quickly using their cash flows. The acquisitions also seem to be achieving critical mass due to the cross sell opportunities between the Telco, Managed Services, and Accommodation facilities parts of the business, using BigAir’s common core and low-cost access network.
The pipeline is also strong. This should come as no surprise, in my own experience many firms are realising that managing IT infrastructure is not their core business, and they can cost-effectively outsource this job, complete with SLA. BigAir have just won their first 2 sites in the retirement facility market but have a pipeline of 70 sites. With specialist providers offering better reliability, lower cost, and still making healthy margins (due to their scale), and days of the in-house IT technician are numbered.