TIDMBBB
RNS Number : 6758H
Bigblu Broadband PLC
07 December 2020
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the
publication of this announcement, the inside information is now
considered to be in the public domain for the purposes of MAR.
Bigblu Broadband plc
('BBB' or the 'Company' or the 'Group')
GBP15m North Yorkshire Tender Secured
-- To receive GBP12.3m Subsidy from the North Yorkshire Local Authority
-- Four Broadband Grants Won This Year Valued at Over GBP27m
-- Quickline to Target 100k Premises
Bigblu Broadband plc (AIM: BBB.L), a leading provider of
alternative super-fast and ultra-fast broadband services, announces
that its subsidiary Quickline Communications Limited ("Quickline")
has won a further competitive tender to provide significantly
improved broadband speeds to premises across North Yorkshire that
are unable to access fast and reliable internet connectivity.
On behalf of the North Yorkshire Local Authority (the
"Authority") and NYnet, the Authority's wholly owned high-speed
connectivity provider, Quickline will extend its network using its
fibre-backed fixed wireless technology to a further 15,830 premises
in rural areas to connect to superfast*, ultrafast** and in some
cases gigabit speed broadband services. The contract provides for a
total network investment of GBP14.5m, leading to significantly
faster broadband speeds in the more isolated areas of North
Yorkshire.
The programme will receive a subsidy of GBP12.3m from the
Authority in partnership with the Government's broadband delivery
programme, Building Digital UK ("BDUK"). Quickline is committing
GBP2.2m of network investment to support the roll-out and deliver
and maintain the new infrastructure.
Given the limited connectivity currently available in the
contracted areas, Quickline expects to see strong take-up of
broadband services, further increasing its addressable market and
customer base. Quickline also expects to deliver at least its
targeted return on capital of c.15% over the life of the
contract.
Quickline is focussed on delivering improved broadband
connectivity in the rural areas of Northern England, where a
significant digital divide remains and hundreds of thousands of
premises are in need of increased broadband speeds. Quickline's
heritage is fixed wireless but its network includes increasing
amounts of fibre connectivity. Its aim is to be the leading UK
dedicated rural broadband infrastructure provider, delivering
innovative, flexible and hybrid solutions that can address the
millions of premises unlikely to be served commercially by full
fibre networks for many years to come.
Four BDUK contacts secured, 5G DCMS Grant, Rural Gigabit
Vouchers to target 100,000 premises
This is the fourth tender won by Quickline in quick succession
under the BDUK Superfast Programme and follows a long period of
engagement with both local authorities and BDUK regarding how best
to improve connectivity in deep rural communities. Today's
announcement follows a GBP9.1m contract, GBP7.6m subsidy, awarded
by the Combined Authority of West Yorkshire, a contract for up to
GBP8.1m of network investment with up to GBP6.1m of subsidy in
Lincolnshire and a GBP1.8m contract, GBP1.4m subsidy awarded by the
North Lincolnshire local authority. In addition, Quickline was
selected by the DCMS in February 2020 to lead a GBP6.0m 5G project
to boost rural connectivity in North Yorkshire.
The four contracts represent an opportunity to provide
significantly improved network connectivity to over 32,000 premises
within Quickline's current footprint using both fibre and fixed
wireless technologies. Quickline will make a combined network
investment of up to GBP33.5m to pass these premises with up to
GBP27.4m funded via subsidies and GBP6.1m to be invested from
Quickline's own resources. Quickline will also invest further
capital in scaling up the organisation, sales and marketing
capability and connecting customers.
The subsidies received are deferred as capital grants and
recognised as other income over a four-year period, partly
offsetting increased depreciation charges as the network investment
is increased. This will, over time, boost Quickline's reported
revenue and EBITDA as its customer numbers grow and associated
revenues and profits develop.
Finally, Quickline is already an approved supplier of Rural
Gigabit Vouchers, which provide funding for up to GBP1,500 per
residential premise and GBP3,500 per business premise for new
gigabit-capable connections in rural areas, and is quickly ramping
up its infrastructure build via this programme. Through a
combination of its current footprint, the four tenders and Rural
Gigabit Vouchers, Quickline sees scope to target over 100,000
premises.
Steve Jagger, CEO of Quickline commented: "We are thrilled to
continue being part of connecting North Yorkshire in this fourth
phase of rolling out Next Generation Access (NGA) superfast
broadband. Everyone in the UK should have access to high-speed
internet no matter where you live or work and this contract means
that up to 97 per cent of all homes and businesses in the county
will now have that ability to access Superfast broadband and in
most cases Ultrafast broadband.
"This year, more than ever, we have seen how important it is to
have online connectivity, giving people the ability to work
remotely and to stay connected to family and friends, reducing
isolation for many."
Andrew Walwyn, Chief Executive Officer of Bigblu Broadband,
commented : "The scale of this latest win highlights the potential
for Quickline to exceed initial expectations. As and when roll out,
and more importantly delivery, commences in earnest we will see
strong customer growth and the resultant impact on profitability.
In addition to competing for new tenders we are excited by the
potential impact of more government funds being utilised on
existing grants."
Funding
The speed and scale of the roll out remains in line with
management expectations following the initial delays caused by
Brexit and COVID-19. The GBP12m funding secured by Quickline in
August 2019 has afforded it the flexibility for it to tender for
these capital-intensive contracts with this latest contract
underpinning Quickline's initial 30,000 subscriber target, with
scope for further growth beyond as it seeks to target 100,000
premises.
The GBP12m funding comprised GBP8m of potential new equity and a
GBP4m revolving credit facility provided by HSBC. GBP7.75m of the
equity was provided by certain funds managed by Harwood Capital LLP
(whose funds also hold a 26.4% stake in Bigblu) and GBP0.25m was
provided by Paul Howard (the Chairman of Quickline and a
Non-executive Director of Bigblu). Of the GBP8 million equity,
GBP4m was invested in August 2019 and GBP2m was invested in October
2020 when the West Yorkshire, Lincolnshire and North Lincolnshire
contracts were announced.
With the North Yorkshire contract now in place and Quickline's
investment in network development progressing, Quickline will now
draw down the final GBP2m equity commitment. This will leave a
balance of GBP4m of debt available for Quickline to draw upon. With
this final GBP2m equity drawdown, Bigblu's shareholding in
Quickline will be 56.9%. BBB will continue to fully consolidate
Quickline in its accounts whilst recognising the associated
minority interest.
Significant Government Support Ongoing
BDUK's GBP1.7bn Superfast Broadband Programme is being phased
out although new contracts can be signed before the end of December
2020 and supported through to 2026. Going forward, BDUK is adopting
an "Outside-In" approach funded by the Chancellor's GBP5bn
commitment to fund gigabit capable deployment in the hardest to
reach 20% of the UK.
The "Outside-In" approach has two main elements: a Rural Gigabit
Voucher Scheme and a Dynamic Purchasing System. Quickline is
already an approved supplier and beneficiary of the Voucher Scheme,
which provides up to GBP1,500 per residential premise and GBP3,500
per business premise for new gigabit-capable connections in rural
areas. Quickline will continue to build new network where these
vouchers are available.
The Dynamic Purchasing System (DPS) is expected to be introduced
in April 2021 and allows infrastructure providers to bid for
funding to roll-out gigabit-capable networks to underserved
regions. Quickline is part of the industry consultation into this
scheme, which is yet to be finalised. However, it is understood
that the hardest to reach areas will be divided into lots with an
average size of around 3,000 premises and an average subsidy of
around GBP1,000 per premise passed. Quickline is already registered
on the scheme and will consider lots as they become available.
Finally, we recognise the importance of gigabit capable networks
and the role that full fibre plays in delivering them. However, it
is worth noting that in many rural areas of the UK, full fibre will
remain too expensive and challenging to deploy even with government
support. Quickline's 5G DCMS backed project in North Yorkshire is
helping increase understanding as to how 5G enabled fixed wireless
could provide a gigabit solution that is both much faster and less
costly to deploy.
*Superfast defined as broadband speeds in excess of 30Mbps
** Ultrafast defined as broadband speeds in excess of
100Mbps
For further information:
Bigblu Broadband Group PLC www.bbb-plc.com
Andrew Walwyn, Chief Executive Officer Via Walbrook PR
Frank Waters, Chief Financial Officer
Dom Del Mar, Corporate Development
finnCap (Nomad and Broker) Tel: +44 (0)20 7220 0500
Marc Milmo / Simon Hicks / Charlie Beeson
(Corporate Finance)
Tim Redfern / Richard Chambers / Manasa
Patil
(ECM)
Walbrook PR (PR / IR advisers) Tel: +44 (0)20 7933 8780
or
Nick Rome/Tom Cooper/Nicholas Johnson BigbluBroadband@walbrookpr.com
About Bigblu Broadband plc
Bigblu Broadband plc (AIM: BBB), is a leading provider of
alternative super-fast and ultra-fast broadband solutions
throughout Australia, the Nordics and parts of the UK. BBB delivers
a portfolio of super-fast wireless broadband products for consumers
and businesses unserved or underserved by fibre. The Group has a
significant target market with 3m customers in the territories we
operate in with speeds of under 4 Mbps.
High levels of recurring revenue, increasing economies of scale
and Government stimulation of the alternative broadband market in
the countries we operate in provide a solid foundation for strong
organic growth as demand for alternative super-fast broadband
services increases in the territories we operate in.
Acquisitive and organic growth enabled BBB to grow rapidly since
inception in 2008 during which time the Company completed 21
acquisitions across nine different countries. In September 2020,
BBB concluded the sale of its UK and European Satellite business to
Eutelsat, offering an excellent return for shareholders. With the
remaining businesses - consisting of its Australian operations
(Skymesh Pty Limited), its majority interest in Quickline (QCL
Holdings Limited) and its Nordics business (Bigblu Norge AS) , BBB
is extremely well positioned to continue growing as it targets
customers that are trapped in the 'digital divide' with limited
fibre broadband options.
BBB continues to provide customers significant ongoing services
in the territories present including hardware supply, installation,
pre and post-sale support billings and collections, whilst offering
appropriate tariffs depending on the requirements of each end user
in each territory. BBB's range of solutions includes satellite,
next generation fixed wireless and 4G/5G delivering between 30 Mbps
and 150 Mbps for consumers, and up to 1 Gbps for businesses.
Importantly, as 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
'video-on- demand'. Its alternative broadband offerings present a
customer experience that is similar to that offered by wired
broadband and the connection can be shared in the normal way with
PCs, tablets and smart-phones via a normal wired or wireless
router.
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END
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