Fibre optics specialist added 3,700 connections and completed £90m acquisition
Companies: Cityfibre Infrastructure
CityFibre (LSE: CITY), the fibre optic infrastructure specialist, announced half-year results this morning for the six months to 30 June 2016, reporting a huge revenue increase of 147% year-on-year, (up from £2.7m in H115 to £6.6m in H116), and a positive adj EBITDA of £0.4m up from a £1.8m loss for the same period last year.
The AIM-listed company said during the period, it had signed new contracts with an initial contract value of £53.8m, versus £23.2m for FY15 and £8.1m for H115. CITY added 3,702 new customer connections, over eight times the 458 it added in H115, and completed the £90m acquisition of KCOM's 2,200km national duct and fibre assets covering 24 cities across the UK.
Stockbroker Liberum said the interim results highlighted the transformation in CityFibre's business model over the last twelve months:
"The acquisition of the KCOM assets and the acceleration in organic growth, place CityFibre at the head of the pack in providing an alternative to truly high speed broadband access in the UK."
finnCap said:
"Typically strong interims demonstrate the benefit of the 230% increase in the number of dark fibre metro network cities, 48% growth in service provider customer base, and 243% growth in connected endpoints, to 3,490. With a further pipeline of over 2,500 endpoints contracted, visibility of growth and multi-year revenue are key features of the model with the organic addition of initial contract value of £28.8m in 1H16 alone, on top of the £25m associated with KCOM* network asset acquisition (announced December, completed January). EBITDA having turned sustainably positive, the model is demonstrably successful, and gaining increasing momentum through initiatives such as KCOM deal and the subsequent addition of Southampton, Portsmouth, Cambridge and other network assets acquired from Redcentric*, announced today."
CEO Greg Mesch said the strong six months were underpinned by excellent performance by its commercial and operations teams:
"In less than three years we have created a highly competitive business underpinned by a dense fibre network across 40 UK cities. Moreover, we've completed two transformational projects that demonstrate the future potential direction of the UK fibre market, a dark fibre mobile project (FTTT) with Three and EE and the completion of the trial of gigabit speed Fibre-to-the-Home (FTTH/P) with Sky and TalkTalk.
"Our business now sits at the forefront of transforming the UK's digital infrastructure and remains well placed to capitalise on a number of significant near term commercial opportunities."
