BigAir posts record growth

ASX-listed wireless broadband provider, BigAir (ASX: BGL), has record profit growth in the second half of 2009.

The ISP increased its earnings before interest, tax, depreciation and amortisation (EBITDA) to $1,448,745; a 68 per cent increase on its previous corresponding half-year period. The EBITDA margin now sits at 43 per cent revenue.

Pre-tax profit jumped by 108 per cent and net profit after tax by 122 per cent to $865,210 and $625,000, respectively. Net operating cash flow hit $1,206,921.

But the pinnacle of the company’s success is growing on-net fixed wireless revenue by 40 per cent in the second half of last year, according to BigAir managing director, Jason Ashton.

“It’s a challenging market and 2009 was a challenging year with the global financial crisis and economic uncertainty,” he said. “We’re very happy to achieve 40 per cent organic growth amid tough conditions.”

Last year marked BigAir’s expansion to Perth, Adelaide and the Gold Coast and Ashton has flagged further geographic expansion plans for 2010.

“We’re looking at some additional markets such as Canberra and potentially Hobart or even Newcastle and Wollongong,” he said. “We’re going to aggressively expand our network. We have spent over $1 million on capital expenditure in the last six months to broaden the network funded from our operational cash flow from good profit.”

This year, the ISP will also look to renew investments in the channel. With 50 wholesale and resale customers under its belt, BigAir is keen to recruit an additional 10-20 active partners. It is looking for integrators, ISPs and carriers with customers in the SMB to corporate space with at least 25 seats.

“We really want to be able to offer data services to those guys so they can have their own value-added services for their customers,” Ashton said.

With direct sales making up less than 30 per cent of overall revenue, BigAir expects that side of the business to continue to dwindle.

The ISP has noted competitor, Clever Communications, has been off-loading its BigAir shares accumulated during a failed hostile take-over 12 months ago.

Ashton predicts Clever will no longer be a substantial shareholder within the next few weeks.

“It seems to me Clever needs the cash for some reason,” he said. “I’m confused as to why it’s selling our stock given we appear to be fairly undervalued and a good growth story.

“We are a competitor and perhaps it doesn’t want to hold a position in a competition’s carrier anymore.”

Clever Communications was unavailable for comment at the time of publication.

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