For most of us, speedy access to the internet is a given. We happily stream films, send and receive videos, phone relatives via Skype and make super-fast online purchases.
But 1.4 million households in the UK suffer from broadband speeds of less than ten megabits per second, including 250,000 homes on less than 2Mbps.
The pattern is repeated across Europe, where 20 million homes are on speeds of less than 2Mbps, making even routine online browsing difficult.
Flying high: Andrew Walwyn’s firm helps with slow internet access
Satellite Solutions Worldwide (SSW) aims to fix the issue, providing high-speed internet access for remote, rural communities and households.
Midas recommended the shares at 4.35p in January 2016. Today, they are 8.7p and are expected to move considerably higher over the next few years.
The company joined the London Stock Exchange’s junior Aim market in May 2015 when it had 10,000 customers. Today, it has more than 100,000 and the numbers are rising every month. The firm has grown both organically and via acquisition, including two deals last month in Italy and Germany.
SSW boss Andrew Walwyn funded those transactions via a £12 million share placing, which leaves the firm with £3 million of cash for small acquisitions and general investment in the business.
Encouragingly, the new shares were priced at a premium to the prevailing price, suggesting large investors believe the firm has strong growth potential. Renowned investor Christopher Mills also participated in the placing, so he now has a 22 per cent stake and a seat on the board. His record of successful investment is encouraging.
The group has government policy on its side too. Governments across Europe are exercised about the so-called ‘digital divide’ – where some people have precious little broadband access. Not only is it inconvenient but it increasingly disadvantages poorly connected homes and businesses. So the European Union has said that everyone must have access to speeds of up to 30Mbps by 2020.
Work is afoot to make that happen, including the launch of a new super-speed satellite, which should give households across Europe speeds of up to 100Mbps and unlimited access to data.
Scheduled for launch in 2020, that should turbo-charge SSW’s growth, especially as the company is already in a joint venture with the firm behind the satellite – a leading player in the US.
Following the share placing, SSW intends to change its name to Bigblu Broadband and there will be a 15-for-one share consolidation so investors will receive one new share for every 15 held. This has no financial impact – it simply reduces the number of shares in issue and will make each share worth about 120p.
Midas verdict: SSW has grown rapidly in the past two years and the shares have almost doubled in price. But the best is yet to come. Existing investors should hold while new investors could still see value at today’s price.