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Aussie Broadband (ASX:ABB) share price soars 16% on solid HY24 result

The Aussie Broadband Ltd (ASX: ABB) share price is up more 16% after ASX telco share’s solid HY24 result.

Founded in 2008, the company provides a range of telco services to residential, business, enterprise and government customers. It also provides wholesale services to other telecommunications companies and managed service providers. It’s the fifth-largest provider of broadband services in Australia.

Aussie Broadband FY24 first-half result

Here are some of the highlights from the FY24 first-half result:

  • Revenue rose 17.7% to $445.9 million
  • Underlying EBITDA grew 12.7% to $46.3 million
  • Operating cashflow jumped 57.8% to $40.7 million
  • Net profit after tax (NPAT) grew by 14% to $9.8 million

The company revealed that its total broadband connections grew 20.6% to 765,800 with “strong growth across all segments”. It boasted of an increased NBN market share (excluding satellite), with a rise of 1.3 percentage points to 8.3%.

The residential business saw 15.4% residential revenue growth to $283.9 million, while wholesale (including voice) revenue jumped 52.5% to $72.3 million. The business segment revenue rose 11.1% to $48 million and the enterprise and government revenue fell 1.2% to $41.7 million.

Aussie Broadband said it’s on track to complete the Symbio acquisition, due 28 February 2024, providing cloud-based voice and messaging capabilities which is “strategically complementary” to the ASX telco share’s business.

Upgraded guidance

Based on current market conditions, the operating plan, pipeline and trading to date, Aussie Broadband decided to upgrade its FY24 EBITDA guidance to a range of between $105 million to $110 million, up from the previous guidance of between $100 million to $110 million. The mid-point of the guidance has been moved higher.

It also reduced its capital expenditure guidance to a range of $40 million to $45 million, down from between $47 million to $52 million.

Management changes

The company announced that current co-founder and Managing Director Phillip Britt will become Managing Director for the Aussie Broadband Group and be responsible for group strategy, merger and acquisition activities, and will remain an active contributor to the technology divisions across the group.

The new CEOs of Aussie Broadband and Symbio will report to Mr Britt.

Current chief financial officer (CFO) Brian Maher will be appointed CEO of the Aussie Broadband business as of today.

Current executive director Michael Omeros will be appointed CEO of the Symbio business, from 28 February 2024.

Final thoughts on the Aussie Broadband share price

The business has done very well since listing in October 2020. It has grown its subscriber base significantly, enabling much stronger revenue.

Increasing its EBITDA guidance is clearly exciting investors. Ultimately, profit (growth) is what investors are looking for.

Investors have already taken the good news into account, but if it keeps growing subscribers and profit then it could still be an attractive idea.

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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
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