Aussie Broadband Ltd (ASX: ABB) shares have cruised to a record all-time high of $2.97 on Thursday. The Aussie Broadband share price has surged by 10% this week despite no market-sensitive news from the company. The last significant announcement from Aussie Broadband was its half-year results on 17 February.
Let’s take a closer look at what’s been happening for the Aussie telco.
Aussie Broadband share price ignoring the noise
The Aussie Broadband share price is ignoring the recent market volatility, including the sharp selloff of tech shares amid fears over rising bond yields. Its shares have pushed higher on Thursday to retest previous record highs set on 27 January.
Aussie Broadband shares are up there as one of the best performing initial public offerings (IPOs) of 2020. The company had an IPO offer price of $1.00 per share with an indicative market capitalisation of approximately $190 million.
Aussie Broadband is a licensed carrier that provides NBN subscription plans and bundles to residential homes, small businesses, not-for-profits, corporate and managed services providers.
Despite there being 189 direct and indirect NBN service providers as at June 2020, 92% of market share is concentrated among four main companies, Telstra Corporation Ltd (ASX: TLS), TPG Telecom Ltd (ASX: TPG), Optus and Vocus Group Ltd (ASX: VOC).
While there might be somewhat of an oligopoly in the Australian telecommunications market, Aussie Broadband has managed to grow its NBN market share from 1.09% in June 2017 to 3.51% as at June 2020.
The company aims to continue growing its market share by leveraging its customer loyalty to deliver new products and pursuing initiatives to acquire more customers.
Solid half-year results
Aussie Broadband delivered an impressive half-year result with revenues up 89% to $157.4 million and earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 87% to $7.3 million. The company cited strong organic growth across both its residential and business segments. Its strong results translated to an improvement in market share to 4.2%.
The company is currently still loss-making, with its half-year results delivering a net loss after tax of $1.4 million. This represents a significant improvement against the $10.5 million loss from the prior corresponding period. Aussie Broadband’s prospectus forecast that FY21 results should deliver a maiden profit of ~$529,000.
One of few successful IPOs from 2020
The Aussie Broadband share price represents one of the few IPO success stories (excluding mining exploration companies) from 2020.
IPOs that hit the ground running last year included Douugh Ltd (ASX: DOU), COSOL Ltd (ASX: COS), Credit Clear Ltd (ASX: CCR) and Dusk Group Limited (ASX: DSK) which have delivered respective returns of around 550%, 220%, 95% and 50%.
Meanwhile, the likes of Youfoodz Holdings Limited (ASX: YFZ), Plenti Group Ltd (ASX: PLT), Payright Ltd (ASX: PYR), DUG Technology Ltd (ASX: DUG), Adore Beauty Group Ltd (ASX: ABY), and Zebit Inc (ASX: ZBT) have yet to deliver any value to shareholders who participated in their IPOs.