Bigblu disappoints, but a break-up is highly likely

Aim-traded alternative broadband services provider Bigblu Broadband (BBB:38.5p) has announced a management buy-out (MBO) of its underperforming Nordic operations alongside annual results that fell short of expectations.

News that the group’s chief executive and founder Andrew Walwyn is stepping down from his position also contributed to the 8 per cent share price fall post results, taking the price below the 42.5p level when I rated the shares a buy at the interim results ('BigBlu offers compelling value and bumper free cash flow', 30 August 2023). Walwyn will be supporting the MBO by local management, so to avoid any conflict of interest former finance director Frank Waters will take his position on the board. Bigblu is selling the Nordic business for a nominal sum of £1 and the buyer will assume £1.3mn of net working capital creditors and liabilities. In addition, there is a contingent earn-out agreement based on the company’s cash profits for the 2025 and 2026 financial years.