What: Innovative internet provider BigAir Group Limited (ASX: BGL) today reported underlying EBITDA of $15.1 million on $41.7 million of revenue for the 2014 financial year.
Notably, a strong end to the financial year contributed a disproportionately higher amount of profits ($8.5 million) in the second-half year versus the first half ($6.6 million). The chief executive attributing this to organic growth and the consolidation of strategic acquisitions made during the year.
The dividend was also lifted 10% to 1.1 cents per share fully franked. Despite a strong outlook and impressive profit growth the stock has been sold off this morning perhaps reflecting disappointment over the underwhelming dividend lift.
Now what: The fixed wireless provider's business model is continuing to prove successful as corporate clients and community or public-sector based organisations continue to take up its WiFi services.
The group is also focused on providing additional internet-technology services, with plenty of opportunity to expand its core fixed wireless services into new markets. Growth can come via increased spends per existing customer, acquisitions, and winning new business.
As a technology stock having an excellent management team is especially important and the group reported that it made four key hires during the second half of the financial year. BigAir is also a founder-driven business with chief executive Jason Ashton plotting its route to success. This means shareholders can rest assured the best management team possible is working to grow the business over the long term.
What of the outlook? As the owner of Australia's largest fixed wireless broadband network BigAir looks well placed to continue its growth trajectory into FY 2015 and beyond.
As BigAir grows the general risk of it being subjected to competitive pressures from bigger rivals such as Telstra Corporation Ltd (ASX: TLS) or TPG Telecom Ltd (ASX: TPM) diminishes, and the general upside proposition grows commensurately.
At 94 cents BigAir is only trading on 25 times 2014's trailing earnings with a strong growth outlook. I think it looks a very solid opportunity given the inherent potential and when the market wakes up to this BigAir could be a big mover.
BigAir's not the only business that looks good value based on future potential, in fact The Motley Fool has identified another business which pays a much larger franked dividend and has a great valuation. Like BigAir its carving out a big growth runway in a sector that looks likely to see growing demand into the future.
