ASS#1 Step 3

Step 3

Term 3 2023

Assignment 1

Step 3 First Draft (before sending off to Studiosity)

Australia’s Most Trusted nbn® Internet Provider | Aussie Broadband

My initial thoughts and first Impression

I clicked on the link to my company that Maria had emailed me and my initial thoughts were great it is an Australian company and one that I had heard of before.  Now I don’t use Aussie Broadband, we use Starlink due to our remote location but will I have second thoughts on changing after reading and diving down into Aussie Broadband! 

The front page of their websites states “Join Australia’s most trusted telco, 100% Australian-based customer support.  Thousand of five-star reviews.  That’s Aussie Broadband”.  I feel like they are really pushing the Aussie theme with the green, yellow and white colours that they are using but are they Australian owned?  The statement reads “100% Australian-based customer support” not 100% Australian owned.  I wonder how many people are thinking the same thing as me? 

As I scroll down the page I see that they offer a number of different services to both personal and business customers and even have bundles with the convenience of having these all on the one single monthly bill but do they offer services to my home address?  I go to the “Enter your address to see what plans are available” tab and enter my home address.  Unable to service the address! Looks like I am staying with Starlink.  Now to have a look at the financial statements

Annual Report KCQ’s

Reading the Directors Report for FY23 I have seen that they talk about integration of two businesses in FY23 and continuing through out FY24.  I wonder which two business they are referring to.  First thoughts that I have are that their targeted market was the residential broadband business, and they are now branching out into other internet pipelines.  I will have to go back and read the other financial reports and see if this is something that they are doing or if it is some other kind of business. 

After having a quick look at the last couple of financial reports I can see that Aussie Broadband has diversified from a largely residential provider to a telecommunications and technology provider of not only residential but also business, wholesale, which I am not really sure what customers fall into this category and government sectors. 

Arears of the business that seem most important or critical to them?   

It appears that one of the most important parts of the business was the acquisition and integration of Over the Wire and Ausie Broadband in FY23 which has enabled them to restructure their operations.  This has seen an increase of 47% revenue for FY23 as this reflects the full 12 months’ ownership of Over the Wire.  Reading their 2021 and 2022 Annual Reports it shows the company making a profit and increases each year in all areas including EBITDA and their gross margin. 

Their cashflow alone has had a significant increase from $37.8m in FY22 to $116.7m this year, and as Martin has said in our lecture that if a company doesn’t have cashflow then the company will not be able to survive. 

With such a large increase in cashflow Aussie Broadband appears to me to be financially secure and I wonder if I will still think this after looking at all of their financial statements and entering them into my spreadsheet.  The increase in cashflow tells me that the company is improving and thriving, and it won’t be long before they hit their targeted growth goal of 1 million broadband services by FY25. 

One area that they are invested in is growing their business development team with a focus on the enterprise and government segment.  With investing in growth will this mean that their expenses will be higher this year compared to other years?  

Key challenges and Aussie Broadband’s apparent strategy?

Growth with recruitment remains a challenge in FY23 and attracting ands securing talent and the right people to fit the business. Employee expenses as a percentage were up to the previous period but they are saying that recruitment remains a challenge.

Aussie Broadband knows that they are in a competitive market with concentrated top 4 large companies all focusing on competitive price, quality product and how other companies offering incentives can have an impact on their new customers however in FY23 they were named the most trusted telco in Australia and have received numerous awards.

Do I have any concerns at this stage?

The only concern that I have at this stage is the financial statements have Consolidated (restated) reports in the notes and I am wondering if these will have any impact on the financial statements when entering the figures into my spreadsheet.  I am happy with my company and look forward to learning more about the reality of the business through financial statements.