TMCnet News

CityFibre Half-Year Revenue Jumps On New Projects, Contract Growth
[September 29, 2014]

CityFibre Half-Year Revenue Jumps On New Projects, Contract Growth


(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - CityFibre Infrastructure Holdings PLC said Monday that its first-half results came in ahead of its expectations outlined at the time of its IPO, with revenue soaring on new projects and contract growth on existing assets.



CityFibre listed on AIM in January this year with a GBP31.4 million market capitalisation. The company designs, builds and operates wholesale fibre optic infrastructure enabling gigabit connectivity in UK towns and cities.

In its half-results for the six months to June 30, the company posted a widened pretax loss of GBP3.6 million, compared to a GBP3.0 million loss in the comparable period of 2013. CityFribre said the widened loss can be largely attributed to increased resource costs as it expands the business.


Revenue, however, jumped during the first-half, up 46% to GBP1.3 million from GBP860,000, as the company secured a number of long-term contracts, largely from counterparties serving public sector end-customers with a very high propensity to renew at the end of the contract term, said the company.

The rise in revenue largely arose from expansion of existing networks, together with initial revenues from its Peterborough project - announced in November 2013 - which is being undertaken by CityFibre in partnership with Serco, IT services provider to the Peterborough City Council.

Since listing in January the company has won a spate of contracts.

In August the company signed a long-term agreement with Easynet under which it will deploy dark fibre connectivity to 176 public sector sites in Kirklees, West Yorkshire.

In April this year the company partnered with British Sky Broadcasting Group PLC and TalkTalk Telecom Group PLC to create a joint venture to establish new broadband services in the city of York, with the aim of building a competing infrastructure to rival BT PLC's Openreach. The companies will build a city-wide fibre-to-the-premise network to deliver broadband connections which it says will deliver speeds of one gigabit to homes and businesses.

As at the end of June, the total number of connected customer premises across the company's portfolio of metro fibre networks was 817, up 76% from the 465 reported at December 31, 2013.

CityFibre reports a cash balance of GBP37.2 million as of the end of June, compared to GBP286,000 at the end of December last year.

The company is encouraged by its results, "We entered this year with the objective of securing a strong capital base and delivering key projects across all our core market areas. We are on track to deliver on all of our objectives," said Chief Executive Greg Mesch.

"We are pleased with the ongoing progress which these results and the recent announcements illustrate. Not only has the Company exceeded expectations of contract wins set at the time of the IPO in January, but we have also already attained the revised full year growth expectations set at the secondary placing in May," added Mesch.

The company said its four key market segments of public sector, mobile, business and consumers remain robust consumers of fibre and that it is pleased with the progress across all these market segments so far.

Looking ahead the company said it expects the strong momentum to continue for the remainder of the year, particularly with regard to new city wins and further commercialisation of existing assets. "The Group's new business pipeline remains robust, with the Company in advanced discussions regarding a number of projects," said the company.

Last week CityFibre said the joint venture company with British Sky Broadcasting Group and TalkTalk Telecom Group had selected Fujitsu Ltd as its build partner for the first phase of the York fibre network.

Shares in CityFibre Infrastructure were Monday trading 1.47% lower at 67.00 pence per share.

Copyright 2014 Alliance News Limited. All Rights Reserved.

[ Back To TMCnet.com's Homepage ]