Why is the Aussie Broadband share price slipping on Wednesday?
A man looking at his laptop and thinking.
The Aussie Broadband Ltd (ASX: ABB) share price is in the red today.
Shares in the S&P/ASX 300 Index (ASX: XKO) telco closed yesterday trading for $3.93.
After opening higher, shares have since given back those gains and are trading for $3.90 apiece, down 0.8%.
For some context, the ASX 300 is up 0.2% at this same time.
This comes following the release of Aussie Broadband’s trading update for the three months ending 31 March (3Q FY 2024).
Here are the highlights.
Aussie Broadband share price dips despite growth
The Aussie Broadband share price is slipping today, despite the company reporting it had added 18,788 broadband services during the quarter.
The company flagged its Enterprise & Government segment as a strong performer, adding new clients across the retail, food, and local government sectors.
The quarter also saw Aussie Broadband successfully complete its acquisition of software communication network provider Symbio. The company expects Symbio will achieve its FY 2024 earnings before interest, taxes, depreciation and amortisation (EBITDA) contribution in line with prior guidance.
Over the three months, Aussie Broadband’s non-binding indicative offer to acquire 100% of the shares of Superloop Ltd (ASX: SLC) was rejected by the Superloop board. This resulted in the disposal of 37.6 million Superloop shares, which in turn resulted in a one-off gain for Aussie Broadband of $13.4 million, after transaction costs and before tax.
The ASX 300 telco reaffirmed its FY 2024 EBITDA guidance of $116 million to $121 million. This includes the four-month contribution from Symbio.
What did management say?
Commenting on the results leaving the Aussie Broadband share price on the flat side today, managing director Phillip Britt said, “We are pleased to have welcomed Symbio into the Group. This successful acquisition represents Aussie’s continued strategic investment into our Wholesale and E&G market segments.”
Britt added:
The group continues to assess other strategic investments to advance our ongoing growth ambitions. We expect to see further market consolidation and will look to participate in that where value can be created, and it makes strategic sense to do so.
While the outcome of negotiations with Origin was disappointing, I remain confident in our growth trajectory. We have a number of strategies in place to deliver on our growth agenda, which we are in the process of executing.
Britt also noted the award-winning year the company has had.
“Our customer service continues to be recognised as market leading. Aussie Broadband was the first business to win three awards in a single year from Roy Morgan,” he said.
Despite today’s dip, the Aussie Broadband share price remains up more than 27% over 12 months.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband. The Motley Fool Australia has recommended Aussie Broadband. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.