Aim-traded shares in BigBlu Broadband (BBB:118p), a satellite internet service provider offering an alternative high-speed broadband service and one formerly known as Satellite Solutions Worldwide, have drifted 10 per cent since I last advised buying (‘Strategic acquisitions’, 9 May 2018) at 130p (prices adjusted for a 15-for-one share consolidation).
Newly appointed non-executive chairman Christopher Mills obviously sees value as he has snapped up 258,334 shares around the current offer price. This means that both Mr Mills and parties related to him (North Atlantic Smaller Companies Trust, Harwood Capital and Oryx International Growth Fund) now control 23.5 per cent of BigBlu’s issued share capital. Three other non-executive directors have recently made purchases totalling almost 28.000 shares. A bullish pre-close trading update ahead of half-year results explains why the directors have been actively buying.
In the six months to the end of May 2018, BigBlu increased its recurring revenue by 20 per cent to £23m, accounting for 91 per cent of turnover in the period. The eye-catching performance was driven by the combination of 7 per cent like-for-like sales growth and bolt-on acquisitions that have helped boost the customer base by a fifth to 123,000 prior to last month’s disposal of 11,000 non-core and lower margin fibre customers of its Australian SkyMesh business. It’s profitable business as an improving sales mix nudged up gross margins to 37.4 per cent.