RE: Simply Wall Street30 Jun 2018 11:09
JSmith, I honestly don't understand where you're coming from.
The Simply Wall Street analysis is - as I said - hardly rocket science, but IMV it's accurate. They're simply taking a look at (and passing an opinion on) publicly available cold hard factual figures - the self-same figures that are freely available for anyone to go and look at. One would presume that any smart investor would make an examination of such audited and thus incontrovertible evidence their very first and most important starting point.
Any other information source over and above cold hard black and white figures involves speculation or assumption of some sort. Yes, director buy-ins can be viewed as a positive sign of confidence by those in the know - but they can also be viewed more cynically as attempts to shore up external investor confidence as well. It's up to each PI individual as to how they view such things.
My own view remains the same. BBB has expanded very fast over the last few years - primarily via issue-financed acquisition. My belief is that they didn't see the dramatic sea-change in Western European non-terrestrial broadband delivery technology until very late and that's currently causing them a problem.
Add to that the fact that they pretty much had to hit a self-imposed (100k customer) target by end 2017 in order to keep the market happy, and I'd suspect that in hindsight they'd think that they've paid too much for recent acquisitions.
That recent combined 21,000 customers in Germany and Italy... didn't that average out at well over 450 Euros per customer? Looking at the average monthly nett profit receivable per customer, what's the payback period going to be? I'd reckon they won't get above break-even for 3 years at a minimum, given that outlay... and that's presuming they can sustain that entire 21k customer base in the face of very aggressive churn rates, as subscribers move on over to either newly rolled-out fibre-based services or across to faster, cheaper and rapidly expanding technology such as wireless or particularly 4G.
IMO, my summary is that BBB's core traditional business in W. Europe - on which its commercial model is currently almost entirely based - is seriously and actually irretrievably under threat. And markets such as Australia, the Nordics and the old Eastern Bloc aren't (yet) big enough to fill the gap. Hence why BBB needs to morph fast into a technology-neutral alternative broadband supplier.
It has realised this - hence the Quickline acquisition, the recent hurried first moves into 4G and the plc name change all being signs of this. But the question remains, did it realise this soon enough and can it do it fast enough? There's clearly a continuing substantial Op Cost drain on the company...
AIMO.
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