I have been keeping an eye on the Vaughn Bowen insider trading court case. Even though it is a side issue to the UWL buisness, I could see it having a pretty negative impact on sentiment and short/medium term share price. It doesn't really inspire confidence when a director goes to criminal court!

The good news though is that the committal hearing is now set for 5 days from the 28th November 2022 and I am fairly confident that the Morrison bid for $5 /share will get over the line before this date. Its really just a matter of whether $5 is the final price or whether we have a new bidder emerge or Vocus come back again. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-245mr-melbourne-man-charged-with-insider-trading/

Today (15th march) is when the insider trading allegations against Vaughan Bowen are before the court. I wonder if the 15% spike on opening price is due to people in the court room knowing what is going on. I am not sure what the legal priocess is but this is a committal hearing that was previouslyly postponed from Feb. Timing seems awfully coincidental if unrelated.

It also looks like they have run out of powder for there share buyback no shares have been bought back since the 6/3 - they bought back a total of 8,845,794 shares at prices between $2.99-3.48, Worth a total of $28,915,090.18. Based on todays opening price jump ($3.80, although slid back to $3.60 at trading halt) and what looks to be a momentum shift in supply/demand a pretty savvy buyback program overall.

A good sign of confidence that the shares are now undervalued when management start there buyback program after sitting on it for the last 3 months. Official start date was the15th November, blue line shows share price during the period when no shares were purchased. They made a comment in the results call that they didn't want to start it during the immediate period before they released their results (21-2) and that they were having a capital allocation meeting to decide on how to spend their cash. It looks like they currently see more immediate value in a share buyback than potential acquisitions. I expect this buyback will continue whiloe the price is below $3.75

• shares bought to date
• 1.1M (22/2/22)
• 1.5M (23/2/22)

A pretty outstanding set of results. Good organic growth and the addition of opticom has made them a much bigger and better buisness than a year ago. They have delivered on everything they said they would do last year and the commentary from the investor briefing was very positive. Despite this the market hated this result and sold it down by 12% after a similiar sell off yesterday. Its now trading around 3.26 down from $4 last week. Maybe market was expecting more immediate growth? To me its a pretty crazy reaction to a vertically integrated telecomunications infrastructure buisness that is profitable, has low maintenance costs on its long life infrastructure and has great cashflow generating capabilities. It wasn't cheap last week but I think it is becoming cheap now given the growth runway this buisness still has.

The only miss was a delay in construction revenue which has been delayed due to the covid shutdowns in Q2, they made it clear that this revenue has just been deferred not lost. Comentary around outlook was positive and they expect to meet full year guidance (145M EBITA - 70M for H1), but didn't want to go on record to exceed the current full year record, but my reading was as they are very happy with the way the buisness is running and the amount of revenue contracted into the future.

91% of their revenue is now recurring. In the call they did a very good job of explaining there competitive advantage around owning their own fibre network, the multiple revenue options this generates and how they are able to capitalise on this and how they still have a ways to go on extracting the full value out of there networks. The mentioned the high demand for high speed internet and how they are robust to inflationary environment and expect to pass along costs if inflation starts to impact. Currently not much inflation in there buisness but they can see some signs of it coming.

Not much talk about capital management, but they did say they have identified several opportunities (only in Australia) that they are exploring that would be valuable assests to there buisness but nothing material yet to be disclosed. It suggests to me that a buyback will probably not happen if they get keen on an aquisition. If they buy something it can be funded from cash reserves and debt (they paid 40M down t. They are meeting this week to discuss capital allocation. No plans to pay a dividend. No detail around any buyers for the company and I think this annoucement was more to support the shareprice than any real activity.

I think this graph from the report gives a pretty clear story on how front end revenue gets converted into cashflow.

Uniti group has been hit with some controversy, with a director Vaughn Bowen being accused of insider trading from when he was involved with Vocus communications several years ago. In response Uniti's share price has had a sharp setback setting around 10% down from recent highs. This is a well managed business and this setback looks temporary and is a good opportunity to grab a bargain while mr market is worried about a problem that won't have a direct impact on the business. This business has been in takeover mode for the last 2yrs and has now consolidated into a high cash generating entity that still has a long growth runway.