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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cityfibre | LSE:CITY | London | Ordinary Share | GB00BH581H10 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 80.90 | 80.80 | 81.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMCITY
RNS Number : 0344S
CityFibre Infrastructure Hldgs PLC
28 September 2017
For immediate release 28 September 2017
CITYFIBRE INFRASTRUCTURE HOLDINGS PLC
('CityFibre' or the 'Group' or the 'Company')
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2017
Focusing on densification and active layer commercialisation of our 42 revenue generating cities
CityFibre (AIM: CITY), a leading designer, builder, operator and owner of duct and fibre optic infrastructure in 42 UK towns and cities, is pleased to announce unaudited financial results for the half year to 30 June 2017.
Overview
CityFibre is now the largest alternative owner of wholesale duct and fibre infrastructure outside London, having materially completed the acquisition of substantially all the major fibre related duct infrastructure available across the UK.
Following the successful finance raise and Entanet acquisition in August, the Group is now focused on the densification of its existing city networks and expanding active layer services across our footprint to accelerate value creation.
Ownership of our existing metro duct infrastructure is expected to accelerate our FTTH/P ("Fibre To The Home" residential consumer and "Fibre To The Premises" enterprise products) roll-out per city by up to 18 months and reduce the cost per home passed by up to 25%.
Financial Highlights:
-- Turnover up 36% to GBP9.0m (H1 2016: GBP6.6m); -- Gross margin improved to 88% (H1 2016: 86%); -- Adjusted EBITDA(*) up 302% to GBP1.7m (H1 2016: GBP0.4m);
-- New contracts with initial contract value ('ICV') of GBP11.0m added, taking total cumulative ICV to GBP135.9m, and unrealised ICV to GBP103.1m;
-- Period end cash and cash equivalents of GBP7.9m, with net debt of GBP57.4m.
Operating Highlights:
-- New contracts sold comprising 712 new customer connections (H1 2016: 3,702, of which 1,782 were organic), bringing cumulative connections sold to 7,993;
-- Total connected customer premises up 21% YoY, to 4,235 (H1 2016: 3,490);
-- Total core metro network route fibre kilometres increased 20% YoY, to 2,417 (H1 2016: 2,011);
-- York FTTH/P trial passed 13,582 homes at period end, with 896 customer premises connected in the period, for total penetration of 28% with several early cabinets over 40%; CityFibre remains the designer, builder, and operator of the network, anchored on our owned core 125km metro infrastructure.
*Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, also excluding share-based payments and significant non-recurring expenses.
Post-period Highlights:
-- Completion of Share Placing and Offer for Subscription on 28 July 2017, raising gross proceeds of GBP201.8m. Principal uses of proceeds include:
-- The commencement of construction of Fibre to the Home/Premises ('FTTH/P'), addressing the residential and enterprise markets in five to ten UK towns and cities during 2018;
-- The expansion of CityFibre's fibre metro networks from 42 UK towns and cities today to not less than 50 towns and cities by 2020; and
-- Acquisition of Entanet International Limited ('Entanet') for GBP29.0m on a cash and debt-free basis, completed on 2 August 2017, adding c.1,500 channel partners, 45,000 broadband customer circuits and 3,500 leased line circuits with a significant recurring revenue base. This deal supports the Company's focus on wholesale active and passive fibre services and accelerates the commercialisation of CityFibre's fibre assets.
Regulatory developments:
-- The Competition Appeal Tribunal's ('CAT') dismissal of the Business Connectivity Market Review ('BCMR') and associated dark fibre regulatory remedy, leaving CityFibre as the only willing dark fibre provider within our footprint in the near term;
-- Launches of both HM Treasury's Digital Infrastructure Investment Fund ('DIIF') and the Department for Culture Media and Sport's ('DCMS') Local Fully Fibre Networks ('LFFN') government stimulus packages of a minimum GBP1.5 billion for full fibre infrastructure investment demonstrating the government's commitment to competitive fibre-based infrastructure;
-- The introduction of 100% business rates relief on new fibre builds for five years; and
-- The launch of an in-depth review by the Advertising Standards Authority to address confusion in the full fibre market from the advertising approach of partial fibre operators.
Greg Mesch, CEO of CityFibre, commented:
"Our focus since the IPO has been on consolidating our position across the UK's second tier cities by anchoring new city builds and acquiring existing duct and fibre infrastructure. Having materially completed the acquisition of significantly all major duct infrastructure available across the UK's cities outside London, CityFibre is now the largest alternative owner of critical fibre and duct infrastructure across 42 UK towns and cities. I am pleased we have now completed a truly transformational financing and accelerative acquisition. We can now begin the next phase of delivering Gigabit Britain - driving deeper into all of our cities and preparing them for full fibre roll-outs over a period of time."
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
For further information, please contact:
Hot Features
Premium
CityFibre Infrastructure Holdings www.cityfibre.com
plc
Greg Mesch, Chief Executive Officer Tel: 020 3510
0602
Terry Hart, Chief Financial Officer
James Enck, Investor Relations Tel: 0333 150
6283
Morten Singleton, Investor Relations Tel: 0333 150
6270
finnCap (Nomad and Joint Broker) www.finncap.com
Stuart Andrews / Christopher Raggett Tel: 020 7220
(Corporate Finance) 0500
Simon Johnson (Corporate Broking)
Liberum (Joint Broker) www.liberum.com
Steve Pearce / Richard Bootle Tel: 020 3100
2000
Vigo Communications www.vigocomms.com
Jeremy Garcia / Fiona Henson / Natalie Tel: 020 7830
Jones 9703
About CityFibre:
CityFibre is the national builder of Gigabit Cities, as the UK's largest alternative provider of wholesale fibre network infrastructure. It has major metro duct and fibre footprints in 42 towns and cities across the UK and a national long distance network that connects these cities to major data-centres across the UK and to key peering points in London.
The company has an extensive customer base spanning service integrators, enterprise and consumer service providers and mobile operators. Providing a portfolio of active and dark fibre services, CityFibre's networks address 44,000 public sites, 7,300 mobile masts, 349,000 businesses and over 4 million homes.
CityFibre is based in London, United Kingdom, and its shares trade on the AIM Market of the London Stock Exchange (AIM: CITY). Further information on the company can be found at www.cityfibre.com
Operational Review
The six months to 30 June 2017 marked a period of continued strong growth for the Group, despite a challenging macro environment in the public sector market due to the general election and delays to government funding announcements. The post-period acquisition of Entanet, GBP201.8m fundraise, and launch of the FTTH/P initiative leave the Group extremely well-placed and well-capitalised to capture the very significant market opportunities emerging as the UK continues to transition to a digital based service economy and the rebuilding of the digital infrastructure begins to accelerate.
Contracts, connections and network enablement
CityFibre added GBP11.0m in new initial contract value ('ICV') in the period, taking gross cumulative ICV to GBP135.9m, and unrealised ICV to GBP103.1m.
Customer connections sold in the period totalled 712, taking cumulative connections sold to 7,993. In the first half of 2016 the Group added 3,702 connections sold, of which 1,920 were added through the KCOM asset acquisition.
In the public sector we added 83 connections sold in the half year versus 449 in the same period last year, largely a reflection of the effect of the snap election call, associated purdah, and the effect of the delays to the launches of the DIIF and LFFN schemes.
In the enterprise sector we added 616 connections sold in the half year versus 1,306 in the same period last year. 1,200 of these additions in H1 2016 related to launch partner contracts in the larger city networks acquired from KCOM. This year's launch deals are proportionately smaller, securing 440 additional connections sold, largely associated with the smaller city networks acquired from KCOM. During the period, the Group signed new launch partners on acquired assets in Wakefield, Exeter, Plymouth, Cambridge, Cheltenham and Gloucester, comprising 410 connections and total ICV of GBP6.2m. Additionally, in the Tier 1 carrier market, the Group also on-boarded Zayo Group, Colt Technology Services, and Gamma during H1 2017.
The order book should not be expected to fully translate into an immediate delivery of connections and associated revenues, but will come through over time:
-- Certain launch contracts include time limited exclusivity arrangements of up to 24 months in return for committed revenues over the contract term of typically 4 to 6 years, contributing significant additions to the order book. Once the exclusivity periods end the cities become open to the full wholesale channel. Our focus in the first half of this year has been on fulfilling these launch partner contracts, which required enablement of active services across our network as well as delivery to associated orders.
-- The order book includes several large dark fibre commitments, but currently relates mainly to orders for active layer services, including major call off contracts for 18 cities, of which 16 relate to KCOM acquired city infrastructure. Dark fibre services are available across all 42 of our towns and cities. 15 cities are currently enabled for delivery of active layer services with a further 6 expected to be enabled by the end of the year, and more subsequently.
-- The enablement of a city for active services requires the procurement or securing of a site for a PoP, the deployment of associated PoP electronics and the construction of a fibre connection from the PoP to our metro network. This can take up to and sometimes over a year. For several of the assets acquired from KCOM last year we additionally need to refurbish the duct and fibre network infrastructure mainly through the blow-through of incremental fibre in the core ring. We focused our attention on enabling the larger cities acquired from KCOM in 2016, leaving the smaller cities for enablement through 2017 and 2018.
Our progress has been marginally slower than we had anticipated, but we are comfortable launch partner commitments are ultimately coming through to fulfilment and we are making good progress on our active layer network enablement.
Connected customer premises and network
At the end of June 2017 the Group had 4,235 connected customer premises and a total of 3,556 route kilometres of operational ducted fibre (2,417 kilometres of metro local access and 1,139 kilometres of long distance network). This compared with 3,490 connected customer premises and 3,150 route kilometres of network at the end of the first half of 2016. Principal organic additions to the network footprint included Southend, Stirling, and the network extension in Peterborough.
Products and services
At period end, CityFibre operated dark fibre services across its entire footprint and active services (Ethernet and Internet access) across a growing proportion of the network. The Group's established track record of offering wholesale Ethernet and Internet access products to partners has seen revenues from active services grow to approximately one fifth of Group revenues in the period under review. This proportion is expected to increase. Firstly with the addition of Entanet's leased line estate and large Channel Partner ecosystem to the Group in August 2017 - significantly expanding the Group's scale and scope of operation in Ethernet and associated product sets. And secondly with an accelerated roll-out of active services across the full network.
Board and employees
On 28 February 2017 Christopher ('Chris') Stone was appointed as the Company's Non-Executive Chairman, following the departure from the Board of Peter Manning in January 2017.
Chris is a technology and services industry veteran with a strong track record of building successful, global businesses in the sector. Most notably he was responsible for leading the transformation of Northgate Information Solutions (then called McDonnell Douglas Information Systems) between 1999 to 2011 to become the world's second largest specialist HR technology and services business and the leading provider of software and services to the UK public sector.
Chris is currently Executive Chairman of NCC Group plc, a cyber security and risk mitigation solutions provider. He is also a Non-Executive Director (formerly Chief Executive Officer) of Radius Worldwide, an expansion services company offering accounting, HR, legal, tax and compliance support to companies' international operations. He led the business during its successful acquisition by private equity firm, HG Capital, in August 2013.
Chris has also previously held senior roles at Accenture, Electronic Data Systems, Digital Equipment Company, Fitness First and CSR, where he served as Non-Executive Director and Chairman of the Remuneration Committee.
Post period end the Group announced that Leo Van Doorne has stepped down from the Board as Non-Executive Director of the Company with effect from 20 September 2017. The Board would like to thank him for his immense contribution.
Also on 20 September, CityFibre appointed Spencer Lake ('Spencer') as a Non-Executive Director of the Company. Spencer was also appointed as a member of the Company's Audit Committee.
Spencer has built a 29-year career in investment banking, most recently as Vice Chairman of HSBC Global Banking & Markets, a role he held until 2016. During his decade-long tenure with HSBC, Spencer held several global senior roles in areas such as running Debt Capital Markets and Acquisition Finance for four years; Global Markets (including FICC, equities and research) for three years; and Capital Financing (structured and unstructured lending, financing and investment banking products) for three years. Prior to HSBC, Spencer spent 17 years at Merrill Lynch in senior roles spanning real estate finance, investment banking, and debt capital markets in New York, Hong Kong and London. Before Merrill Lynch, Spencer worked for two years at JP Morgan in real estate investment banking.
Earlier this year, Spencer was appointed as Vice Chairman of Fenergo, a client lifecycle management software provider for financial services companies. Spencer is also a senior advisor to nCino (cloud-based bank operating system), Callsign (AI-based identity authentication), Astuta (data management), and the International Capital Market Association (ICMA).
In addition to the Directorate changes, the Group added 20 new employees and contractors during the period, ending the first half with 163 full-time equivalent staff (FTEs).
Post period developments
Focusing on network densification and active layer roll-out
On 5 July 2017 CityFibre announced both a GBP201.8m equity finance raising, through a combination of a placing and an offer for subscription, and the acquisition of Entanet International Limited. A Prospectus containing full details of the Capital Raising was published on 11 July 2017 and a General Meeting in connection with the Capital Raising was held on 27 July 2017, with all resolutions duly passed and the finance raising completed at 55p per share on 28 July.
The finance raising enables the Group to move on to the next phase of our development focusing on the densification and active commercialisation of our existing city networks.
The proceeds of the Placing and the Offer for Subscription will be used as follows:
1. The commencement of construction of Fibre to the Home/Premises ('FTTH/P'), addressing the residential and enterprise markets in five to ten UK towns and cities during 2018;
2. The expansion of CityFibre's metro networks from 42 UK towns and cities to no fewer than 50 towns and cities by 2020. This expansion of our metro model includes the extension of active layer services across our fibre network, where demand and economics justify this; and
3. The acquisition of Entanet, a provider of wholesale communications services, for a consideration of GBP29 million in cash (on a cash-free, debt-free basis and subject to adjustments). This deal supports the Company's focus on wholesale active and passive fibre services and accelerates the commercialisation of CityFibre's fibre assets. Entanet adds c.1,500 channel partners that will be enabled to sell across our 42 towns and cities.
1. FTTH/P and densification of cities
We have announced that we will commence FTTH/P roll-outs in five to ten cities and we now are working on city selection, enabling these cities to support full FTTH roll-outs and arranging service provider agreements to effect this critical step. These will be in conjunction and consultation with our service provider customers. Accordingly, we are in the advanced stages of discussions with major service providers across public sector, business, mobile and consumer markets.
One critical component of these discussions is the pricing for consumer FTTH/P services, which we believe can be equal or lower, depending on volume commitments, to the existing copper-based infrastructure pricing of the incumbent. So we aim to offer a superior product at a competitive price, without the need for service providers to pay incremental fees for the recovery of investments made relatively recently in outdated legacy infrastructure.
Our focus on network densification follows CityFibre's successful participation in the FTTH/P trial in York. The trial demonstrated strong demand from ISPs and consumers for gigabit speed FTTH/P services, and showed the propensity for consumers to switch to FTTH/P connections. York was chosen as the site of the trial roll-out specifically because it is considered to be representative of a typical UK city, including in terms of its market demographics, home density and partial (39%) Virgin cable presence. This remains the largest wholesale trial of its kind in the UK. The trial demonstrated the commercial viability of FTTH/P in the UK, with deployment costs in line with expectations and penetration in some cabinet areas already above 40% after less than two years in commercial production.
In addition to the demand dynamics, the York trial also provided proof points around the cost estimates for FTTH/P roll-out. Having existing core network and PoP facilities infrastructure in the cities in which we initially plan to roll-out FTTH/P we estimate we will save up to 18 months of deployment time per city. We expect this to also save up to 25% on the total costs of rolling out the network. The rollout of FTTH/P will also enhance the value of our associated metro networks by providing us with a far greater network capillarity which puts us in a better position to win incremental public sector, small cell, macro cell and smart city connections. Furthermore, FTTH/P will enable CityFibre to offer fibre-based services to SMEs which are significantly cheaper than point-to-point fibre leased lines, by deploying dense GPON based architecture covering entire business parks, for example. There is also significant scope to flex both speeds and reliability of the FTTH/P roll-out through adding better splitter ratios to GPON deployment selectively and relatively inexpensively through a straight-forward re-patching exercise.
One further benefit of a full-fibre network to homes and businesses is the dramatically lower fault rates typical of such networks, which we estimate are significantly less than those of a typical copper-based network, perhaps as much as 1/20(th) the fault rate.
2. Expansion of Metro footprint from 42 towns and cities to 50
CityFibre will continue to extend its current metro footprint selectively, ensuring that each new metro project is anchored by long term contracts that deliver a satisfactory return on the initial capital investment required while also covering a substantial portion of projected capital expenditure. The same policy will apply to the extension or expansion of existing town and city networks to serve public sector, business and mobile customers.
3. Entanet acquisition
On 5 July 2017, the Group announced the proposed acquisition of Entanet International Limited ('Entanet') for GBP29.0 million on a cash-free and debt-free basis, net of a deferred element of GBP4.7 million. The acquisition completed on 2 August 2017.
Entanet is a wholesale communications provider that uses third party networks owned by other suppliers such as BT Wholesale, Openreach, Virgin, Vodafone, TalkTalk Business and others, to deliver a wide range of connectivity and broadband products and services to Channel Partners, including Ethernet, private and wide area networks, IP and PSTN telephony, colocation, hosting and associated services.
The Entanet acquisition brings together two complementary wholesale capabilities: CityFibre's national wholesale fibre infrastructure and Entanet's established wholesale Ethernet product portfolio and commercial relationships with Channel Partners. Entanet will become the primary route for CityFibre to market its full-fibre connectivity through Entanet's network of Channel Partners.
Entanet's strategy is focused on the development and growth of wholesale communications services. It packages data communications products, including broadband and leased line internet connectivity, IP telephony and hosting services and makes these products and services available nationally, with approximately 1,500 Channel Partners that serve the business and residential markets having conducted business with Entanet in the 12 months ended 31 December 2016. The Directors believe that the Entanet acquisition will significantly enhance the Group's wholesale fibre capability and accelerate its future growth. By combining CityFibre's fibre infrastructure with Entanet's established Ethernet and other wholesale products, systems and relationships with Channel Partners, the Group expects to realise the following synergies and benefits, estimated by the Directors to deliver cost synergies of over GBP3 million per annum within three years of completion of the acquisition:
-- Increase Relationships with Channel Partners - The acquisition is expected to give CityFibre access to new Channel Partners due to Entanet's existing position as a wholesale provider with approximately 1,500 Channel Partners having conducted business with Entanet in the 12 months ended 31 December 2016. This represents a significant potential increase in CityFibre's indirect routes to market;
-- Achieve Synergies - Entanet's services operate on the networks of a number of suppliers, including BT Wholesale, Openreach, Virgin Media, Colt Technology, TalkTalk Wholesale and Vodafone. It currently services over 45,000 broadband connections and over 3,500 leased lines. A proportion of these connections originate and/or terminate in CityFibre's existing or expanded city footprint, giving rise to the opportunity to migrate these connections to the Company's fibre infrastructure over time;
-- Trading and Support Interfaces - The acquisition is expected to give CityFibre access to Entanet's wholesale systems that provide a layer of automated order and billing capabilities as well as customer portals and support systems;
-- Complementary Products - The acquisition is expected to enable CityFibre to utilise Entanet's wholesale product portfolio enhancing CityFibre's own wholesale fibre capabilities;
-- National Ethernet Capability - The national networks leased by Entanet from other suppliers support the end-to-end Ethernet capabilities that are required as part of CityFibre's product development. The acquisition is expected to accelerate both the timescale and scope of CityFibre's Ethernet strategy, enabling faster take up of the Group's fibre connectivity by national Channel Partners. The acquisition is expected to enable Entanet to offer the delivery of wholesale services across CityFibre's fibre infrastructure in both existing and future metro towns and cities, providing differentiated gigabit speed full-fibre connectivity services through its established base of Channel Partners.
We have already commenced the engineering and resourcing required to enable Entanet to fully leverage the CityFibre suite of products and services across all 42 towns and cities. Enablement of Entanet active layer services on CityFibre infrastructure requires the lighting up of our LDN, city PoPs and cable links in several cities between CityFibre and Entanet PoPs. Edinburgh has already been connected with an order sold, ordered and delivered. A further 11 cities are planned for enablement this year, and 11 more in 2018.
Debt refinancing process
As the Group evolves and matures, management expects that the debt capacity of the business will increase and the cost of debt will become significantly lower than those of its existing facilities. Generally, infrastructure businesses are well-suited to long-term debt structures and are anticipated to form a material proportion of our optimised mature capital structure. Following the recent equity raise, Management is in the early stages of reviewing the Group's near term capital structure requirements and has begun a process to assess its options for refinancing its existing debt facilities in 2018. It is expected that this should bring down the cost of debt significantly from the early stage facilities secured with Proventus (when the business was EBITDA-negative) and will provide further capital for our development of the FTTH/P opportunity.
Market environment and outlook
Momentum in the Public Sector market was affected by the snap general election call, and associated purdah, as well as the delays to the announcement of both the DIIF and LFFN stimulus programmes. These caused public sector customers to defer infrastructure investment decisions. Two material public sector opportunities have now shifted into 2018 which will cause revenue for this segment to fall marginally below our initial expectations. Despite this backdrop, the pipeline of opportunities in public sector networks has actually increased significantly. Though we did not close any major PSN deals in H1, none have been lost. The creation of the LFFN stimulus programme by the DCMS has provided further impetus for cities to commission the creation of more core gigabit fibre networks to serve their own estate and local businesses, and we welcome this new catalyst to the development of the market.
The Group continues to develop significant commercial opportunities in the mobile connectivity segment, to improve economics and performance for macro cell sites. Although there have been no major signings in H1, we now have near-term regulatory clarity around dark fibre. The CAT's rejection of Ofcom's BCMR findings this summer means CityFibre is now left as the only major willing provider of dark fibre into the UK market outside London. This is an ideal position for CityFibre as mobile operators look to future-proof their macro and micro site networks for both existing and future 5G services, and we remain excited by the scale of the opportunity here.
The Business segment continues to develop in line with our previously stated five-year penetration target of 7.5% to 10% per city. A number of our key cities now stand at more than 5% penetration in terms of connections sold, and we believe the Entanet acquisition will accelerate the introduction of a broader range of products and price points into the Business segment and will drive further continued incremental sales.
Our organic progress to date in signing up channel partners has been significantly enhanced by the acquisition of Entanet, which we closed in August. Our combined offering, now leveraging Entanet's c.1,500 channel partner network and service provision platform and CityFibre's extensive network footprint, is already showing early signs of accelerating the take-up of our services. Overall Group revenue for the financial year will be significantly increased as Entanet begins to contribute.
Having completed the raising of significant funds the main focus for CityFibre is now on the densification of its existing cities and the incremental investment in FTTH/P deployment. The exact timing and quantum remains under discussion with potential ISP partners and, as set out previously, we are in advanced discussions with ISPs. In anticipation of the fund raising we committed investment during H1 on detailed planning, engineering work and construction contracting for FTTH/P roll-outs across several of our cities and further resources are now being applied to detailed city designs, construction planning, colocation facilities and construction firm contracting. Over GBP0.3m of costs were incurred in H1 in relation to FTTH/P roll-out activities, and these costs are expected to increase into the second half of 2017, and 2018.
Overall the Board is very comfortable with the outlook for the Group and confident in CityFibre's strong strategic position.
Regulatory Developments
Since we last reported there have been a number of significant developments that have continued the trend towards a more supportive evolution of the regulatory environment towards CityFibre and UK broadband infrastructure investors more generally.
BCMR
On 6(th) July 2016 CityFibre lodged an appeal against Ofcom's 2016 Business Connectivity Market Review ('BCMR') on concerns that the regulation could harm competitive investment in full fibre infrastructure to businesses. TalkTalk and BT also lodged appeals with the Competition Appeal Tribunal ('CAT').
In August 2017 the CAT issued its ruling in relation to the market definition issues arising in the BCMR. The CAT found unanimously in favour of the appellants' arguments, and against Ofcom, effectively annulling the 2016 BCMR and remitting it back to Ofcom for reconsideration.
The BCMR had been the foundation for the pricing controls of all leased lines and the basis for Ofcom's Dark Fibre Access ('DFA') remedy. As a result of the CAT ruling, these remedies cannot now be introduced in the form prescribed in the BCMR. Ofcom must now undertake a new review in consultation with the industry, likely to delay implementation of a dark fibre remedy for perhaps 18 months. Consequently, CityFibre remains the only wholesale provider of scale of dark fibre services into the UK market.
Digital Infrastructure Investment Fund
On 3 July 2017 the UK Government officially launched the Digital Infrastructure Investment Fund ('DIIF'). The fund, initiated with GBP400m of HM Treasury funds and expected to be at least matched by other institutional investors, has been set up to incentivise and accelerate full-fibre deployment across the UK by alternative providers.
The exact details of the DIIF are still to be finalised, but three fund managers have been appointed to allocate the fund's investments, and CityFibre is already engaged in early stage discussions with them to scope out how the DIIF might serve as a potential source of additional future funding for future CityFibre projects.
Local Full Fibre Networks ('LFFN') programme
In the Spring budget the DCMS announced its intent to engage with both communications providers and local bodies to develop delivery approaches and incorporate these into a first wave of investment projects totalling GBP200m. The aim is to fund locally-led projects across the UK to leverage local and commercial investment in full fibre. By harnessing public sector internet demand, upgrading connections to schools and other public sector buildings, and offering new full fibre connection vouchers to increase business take-up, the LFFN aims to incentivise substantial new commercial investment to connect homes and businesses with full fibre networks, such as those developed by CityFibre.
Business rates relief
On 4 July 2017 the Telecommunications Infrastructure Bill was introduced to Parliament, delivering on the Government's promise to introduce 100 per cent relief on non-domestic business rates on investments in new fibre for a period of five years. This should act as another accelerator for full-fibre deployment in the UK.
Advertising standards
On 10 July 2017 the Advertising Standards Authority announced it would conduct an in-depth review of fibre advertising. This followed on from evidence presented by CityFibre and other UK full-fibre players showing that the current advertising rules on fibre broadband have the potential to mislead consumers. At present, advertising rules allow broadband products that rely on a final copper connection to the premises to be advertised as "fibre". We believe that reform of these rules, so that "fibre means fibre", is essential to empower consumers to make informed choices between copper-based and full-fibre products.
Financial review
Profit and loss
Turnover in the period was GBP9.0m, an increase of 36% over the comparable prior period driven by revenue of GBP1.9m from new contracts sold since H1 2016.
Gross margin increased to 88% from 86%, reflecting the ongoing high operating leverage characteristic of the business model as the Group continues to add new business at a gross margin above 90%.
Administrative expenses decreased to GBP9.4m, largely attributable to transaction and transition fees associated with the acquisition of KCOM assets in H1 2016. Removing the effect of these costs, the underlying administrative costs (excluding depreciation and amortisation) increased by 18%. Staff costs grew by 17% to GBP4.2m reflecting headcount growth of 24% to 163 Full Time Employees at period end. Sales, General and Administrative expenses grew by 21% to GBP2.0m.
Reported EBITDA profit was GBP0.7m, an improvement of GBP3.0m from the prior period loss of GBP2.3m, principally due to the effect of non-recurring costs from 2016.
Adjusted EBITDA was GBP1.7m, a significant improvement from the GBP0.4m profit posted in the first half of 2016. This also includes over GBP0.3m of costs incurred in H1 in relation to FTTH/P roll-out activities. A reconciliation of reported EBITDA to adjusted EBITDA appears overleaf.
Net finance costs were GBP4.3m, up from GBP3.3m in the prior period. Finance costs are based on interest costs on debt drawn down plus amortised finance costs. The difference reflects a higher level of debt drawn down this period as well as timings of the draw downs.
Net loss for the period of GBP5.9m, an improvement of GBP1.6m from 2016, reflects the improved gross margin and the reduction in administrative expenses.
EBITDA reconciliation
Six months Six months Twelve
to 30 to 30 months
Jun 2017 Jun 2016 to 31
Dec 2016
GBP'000 GBP'000 GBP'000
Operating loss per
interim accounts (1,502) (4,193) (5,141)
Add-back:
Depreciation 2,125 1,745 3,572
Amortisation 70 117 358
EBITDA* 693 (2,331) (1,211)
Fees in connection
with regulatory review 368 466 904
Share-based payments
charge 600 556 908
Operational and financing
costs in respect of
the Acquisition** - 1,722 1,884
Adjusted EBITDA*** 1,661 413 2,485
*EBITDA is a non-statutory classification, defined as earnings before interest, tax, depreciation and amortisation.
** Operational and financing costs in respect of the Acquisition include performance-related bonuses for key staff connected with the KCOM transaction.
***Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, also excluding share-based payments and significant non-recurring expenses, and serves as a proxy for the underlying financial performance of the business.
Balance sheet
The increase in net property, plant and equipment posted in the period is due to the continued expansion of the Group's metro footprint.
During the first half, the Group drew down a further GBP5.5m of its GBP100m senior secured debt facilities, leaving a total of GBP65.3m drawn at period end. Total borrowings include GBP4.1m of unamortised finance costs, giving a figure of GBP61.2m on the balance sheet. The GBP30m Revolving Credit Facility included in the facilities remains undrawn. The Board continues to review the Group's options regarding debt refinancing in the first half of 2018.
Period end cash was GBP7.9m and net debt was GBP57.4m.
Cash flow
Cash outflow from operations decreased to GBP1.2m from GBP3.8m in the prior period, although the first half of 2016 included the classification of GBP3.1m of inventory purchased as part of the asset acquisition from KCOM. Excluding this non-recurring item, there is a negative movement of GBP0.5m in the first of 2017 compared to the first half of 2016.
Total acquisition of property, plant and equipment was GBP7.7m in the period, principally comprising network capex.
consolidated statement of comprehensive income
For the Six Months ended 30 June
Six months Six months Twelve
to 30 to 30 months
June June to 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Continuing operations
Revenue 9,036 6,632 15,363
Cost of sales (1,117) (937) (1,827)
------------- ------------- -----------------
Gross profit 7,919 5,695 13,536
Administrative expenses (9,421) (9,888) (18,677)
------------- ------------- -----------------
Operating loss (1,502) (4,193) (5,141)
Finance cost (4,315) (3,311) (7,341)
Finance income 15 24 45
Share of post-tax
losses of equity accounted
Joint Venture (118) (17) (147)
------------- ------------- -----------------
Loss on ordinary activities
before taxation (5,920) (7,497) (12,584)
Income tax - 5 -
------------- ------------- -----------------
Loss for the financial
period and total comprehensive
losses attributable
to the equity holders
of the parent company (5,920) (7,492) (12,584)
Loss per share
Basic and diluted GBP(0.02) GBP(0.03) GBP(0.05)
loss per share
------------- ------------- -----------------
Consolidated Statement of Financial Position
At 30 At 30 At 31
June June December
2017 2016 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Property, plant and
equipment 163,876 141,654 155,159
Intangible assets 1,282 1,208 1,211
Investment in Joint
Venture 314 572 433
------------- ------------- -----------
Total non-current assets 165,472 143,434 156,803
Current assets
Inventory 4,002 3,336 3,986
Trade and other receivables 11,122 7,657 8,070
Investment in short-term - 10,000 -
deposits
Cash and cash equivalents 7,892 8,146 16,722
------------- ------------- -----------
Total current assets 23,016 29,139 28,778
Total assets 188,488 172,573 185,581
------------- ------------- -----------
Equity
Issued capital 2,713 2,713 2,713
Share Premium 137,943 137,943 137,943
Share warrant reserve 85 85 85
Share-based payments
reserve 2,700 1,638 2,100
Merger reserve 331 331 331
Profit and loss account (40,548) (29,537) (34,628)
------------- ------------- -----------
Total equity 103,224 113,173 108,544
Liabilities
Non-current liabilities
Interest bearing loans
and borrowings 61,157 39,897 55,280
Deferred revenue 11,305 11,233 11,091
Deferred consideration - 457 450
Total non-current liabilities 72,462 51,587 66,821
Current liabilities
Deferred revenue 3,163 2,159 2,864
Trade and other payables 9,639 5,654 7,352
------------- ------------- -----------
Total current liabilities 12,802 7,813 10,216
Total liabilities 85,264 59,400 77,037
Total equity and liabilities 188,488 172,573 185,581
------------- ------------- -----------
Consolidated statement of cash flows
For the Six Months Ended 30 June 2017
Six months Six months Twelve
to 30 to 30 months
June June to 31
2017 2016 December
2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Cash flows from operating
activities
Loss before tax (5,920) (7,498) (12,584)
Amortisation of intangibles 70 117 358
Finance income (15) (24) (45)
Finance costs 4,315 3,311 7,341
Depreciation 2,125 1,745 3,572
Share-based payments charge 600 557 908
Increase in inventory (16) (3,145) (3,797)
Increase in receivables (3,081) (2,629) (3,023)
Increase in payables 609 3,184 4,145
Right of use income 2 19 29
Share of loss from associated
company 118 17 147
Transaction Fees - 582 582
Net cash utilised in operating
activities (1,193) (3,764) (2,367)
Cash flows from investing
activities
Interest received 15 72 73
Investment in short-term - (10,000) -
deposits
Acquisition of intangibles (140) (296) (517)
Acquisition of property,
plant and equipment (7,686) (98,246) (110,560)
Costs of acquiring property,
plant and equipment - (1,077) (1,077)
Capitalised labour costs (1,438) (1,312) (2,946)
Net cash utilised in investing
activities (9,249) (110,859) (115,027)
Cash flows from financing
activities
Proceeds from issue of
share capital - 80,000 80,000
Costs of issuing share
capital - (3,555) (3,562)
Debt finance costs paid - (5,326) (5,320)
Drawdown of borrowings 5,500 44,800 59,800
Interest paid (3,888) (2,880) (6,533)
------------- ------------- -----------
Net cash received from
financing activities 1,612 113,039 124,385
Net (decrease)/ increase
in cash and cash equivalents (8,830) (1,585) 6,991
Cash and cash equivalents
at beginning of period 16,722 9,731 9,731
------------- ------------- -----------
Cash and cash equivalents
at end of period 7,892 8,146 16,722
------------- ------------- -----------
Consolidated Statement of Changes in Equity
Share Share Share Share-based Merger Retained Total
capital premium warrant payments reserve Earnings
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2016
(audited) 1,113 63,243 85 1,081 331 (22,044) 43,809
---------- ---------- ---------- ------------- ---------- ----------- ---------
Loss and total
comprehensive
income for the
period (unaudited) - - - - - (7,492) (7,492)
---------- ---------- ---------- ------------- ---------- ----------- ---------
Issue of new
ordinary shares
(unaudited) 1,600 78,400 - - - - 80,000
Share issue costs
(unaudited) - (3,700) - - - - (3,700)
Share-based payments
(unaudited) - - - 556 - - 556
Balance at 30
June 2016 2,713 137,943 85 1,637 331 (29,536) 113,173
---------- ---------- ---------- ------------- ---------- ----------- ---------
Loss and total
comprehensive
income for the
period (unaudited) - - - - - (5,092) (5,092)
---------- ---------- ---------- ------------- ---------- ----------- ---------
Share-based payments
(unaudited) - - - 463 - - 463
Balance at 31
December 2016
(audited) 2,713 137,943 85 2,100 331 (34,628) 108,544
---------- ---------- ---------- ------------- ---------- ----------- ---------
Loss and total
comprehensive
income for the
period (unaudited) - - - - - (5,920) (5,920)
---------- ---------- ---------- ------------- ---------- ----------- ---------
Share-based payments
(unaudited) - - - 600 - - 600
Balance at 30
June 2017 (unaudited) 2,713 137,943 85 2,700 331 (40,548) 103,224
---------- ---------- ---------- ------------- ---------- ----------- ---------
Notes to the Interim Financial Statements
1. ACCOUNTING POLICIES
CityFibre Infrastructure Holdings plc (the "Company") is a company registered in England and Wales. The interim financial statements for the period ended 30 June 2017 comprise the Company and its subsidiaries (together referred to as the "Group").
The principal accounting policies applied in the preparation of these interim financial statements are summarised below. They have all been applied consistently throughout the current and preceding period.
Basis of preparation
The financial information presented in this preliminary announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union. The principal accounting policies adopted in the preparation of the financial information in this preliminary announcement are unchanged from those used in the annual report and accounts for the year ended 31 December 2016 and are consistent with those that the company expects to apply in its financial statements for the year ended 31 December 2017.
The financial information for the periods ended 30 June 2016 and 30 June 2017 presented in this preliminary announcement does not constitute the company's statutory accounts for those periods, and are unaudited. The company's Annual Report and Accounts for the year ended 31 December 2016 has been audited and filed with the Registrar of Companies. The Independent Auditors' Report on the company's Annual Report and Accounts for the year ended 31 December 2016 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006.
Basis of accounting
The financial statements have been prepared on a going concern basis and in accordance with International Financial Reporting Standards ('IFRS') and their interpretations issued by the International Accounting Standards Board ('IASB'), as adopted by the European Union. They have also been prepared with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The Group has not adopted any Standards or Interpretations in advance of the required implementation dates. The implications of these new accounting standards on the Group have not yet been fully evaluated.
Basis of consolidation
The interim financial statements incorporate the results of CityFibre Infrastructure Holdings plc and all of its subsidiary undertakings as at 30 June 2017. The results of subsidiary undertakings are included from the date of acquisition.
CityFibre Infrastructure Holdings PLC was incorporated on 13 November 2013, and on 11 January 2014 it acquired the issued share capital of CityFibre Holdings Limited by way of a share-for-share exchange. The latter had six wholly owned subsidiaries: CityFibre Limited, CityFibre Networks Limited, Fibrecity Holdings Limited, Gigler Limited, CityFibre Metro Networks Limited and Fibrecity Bournemouth Limited. The consideration for the acquisition was satisfied by the issue of 115,383 Ordinary Shares in CityFibre Infrastructure Holdings PLC to the shareholders of CityFibre Holdings Limited.
The accounting treatment in relation to the addition of CityFibre Infrastructure Holdings plc as a new UK holding Company of the Group falls outside the scope of the IFRS 3 'Business Combinations'. The share scheme arrangement constituted a combination of entities under common control. The reconstructed Group was consolidated using merger accounting principles as outlined in Financial Reporting Standard 6 ('FRS') Acquisitions and Mergers (UK) and treated the reconstructed Group as if it had always been in existence. Any difference between the nominal value of shares issued in the share exchange and the book value of the shares obtained is recognised in a merger reserve.
The Company has taken advantage of merger relief available under Companies Act 2006 in respect of the share for share exchange as the issuing company has secured more than 90% equity in the other entity.
Joint ventures
Joint ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
These interim financial statements include the Group's share of the total recognised gains and losses of a joint venture using the equity method, from the date that significant influence commenced, based on present ownership interests, less any impairment losses. Under the equity method, investments in joint ventures are carried in the Consolidated Statement of Financial Position at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the joint venture, less any impairment in the value of the investment and the Group's share of any gain on contribution of assets to the joint venture.
Revenue
Revenue represents network lease sales and installation sales to external customers, sales of internet services to residential customers, and recharge of work performed for the joint venture at invoiced amounts less value added tax or local taxes on sales. Where revenue arising from installation and connection services is separable from network lease services, these elements are recognised as if they were separate contracts.
Network lease revenue is recognised evenly over the period to which the services are provided, and is recognised from the date at which the network service becomes available for use by the customer.
Installation revenue is recognised on a percentage completion basis over the period of construction of the asset, from post-contract signature mobilisation to customer handover. Management apply a straight line basis as this closely approximates revenue recognised on a stage of completion basis and the effort required to deliver services to customers.
It is considered by management that the above revenue recognition policies are suitable for recognising revenue arising from the Group's key market verticals.
Revenue attributable to infrastructure sales in the form of Indefeasible-Rights-of-Use ('IRUs') with characteristics which qualify the transaction as an outright sale, or transfer of title agreements, are recognised at the later of delivery or acceptance by the customer.
Accrued income is recognised when services are provided in advance of the customer being invoiced.
Deferred revenue is recognised when services are invoiced in advance of the period over which the services are provided.
Revenue from internet services provided to residential customers is recognised on a monthly basis, commencing when services are provided.
Revenue from work performed for the JV is recognised during the period to which the work relates.
All revenue streams are wholly attributable to the principal activity of the Group and arise solely within the United Kingdom.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any provisions for impairment. Where network assets are acquired as part of a contract including a provision of services, the asset is initially recognised at fair value to include the value of these services. Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:
Leasehold property 5 years Network assets 40 years - Duct Network assets 20 years - Cabling Plant and machinery 5 years Fixtures and 3 years fittings Motor vehicles 3 years
Useful economic lives and residual values are assessed annually. Any impairment in value is charged to the statement of comprehensive income.
Intangible assets
Customer contracts, which have arisen through business combinations, are assessed by reviewing their net present value of future cash flows. Customer contracts are amortised over their useful life not exceeding six years.
Software costs that are directly attributable to IT systems controlled by the Group are recognised as intangible assets and the costs are amortised over their useful lives not exceeding three years. Amortisation is included in general administrative costs in the statement of comprehensive income.
Impairment of non-current assets
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable an asset is reviewed for impairment. An asset's carrying value is written down to its estimated recoverable amount (being the higher of the fair value less costs to sell and value in use) if that is less than the asset's carrying amount.
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis. Inventory includes equipment necessary to install fibre optic networks and also includes the cost of specific network assets allocated for sale under indefeasible right of use (IRU) agreements.
Net realisable value is based on estimated selling price less additional costs to completion and disposal.
Certain network assets were classified as inventory assets during 2016. The Group intends to sell these network capacity assets on a regular basis where it is considered to be a strategically viable product.
Finance costs
Finance costs are charged to the profit or loss over the term of the debt so that the amount charged is at a constant rate on the carrying amount. Finance costs include issue costs, which are initially recognised as a reduction in the proceeds of the associated capital instrument.
Operating leases
Rentals paid under operating lease commitments are charged to the profit or loss on a straight line basis over the lease term.
Financial liabilities and equity
Financial liabilities, including trade payables and bank loans, are recognised when the Group becomes party to the contractual arrangements of the instrument and are recorded at amortised cost using the effective interest method. All related interest charges on loans are recognised as an expense in 'finance cost' in the statement of comprehensive income.
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.
Financial assets
Trade and other receivables are initially recorded at their fair value and subsequently carried at amortised cost, less provision for impairment.
A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. Bad debts are written off when identified.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and cash in hand, and short-term highly liquid investments with an original maturity of three months or less.
Share based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of the grant. The fair value at the grant date is determined using two different models. For share options that include market-based vesting criteria, the Monte Carlo model has been used, with the expense recognised over the expected vesting period of the options. For all other options the Black-Scholes model has been used, with the calculated value expensed over the vesting period. The value of the expense is dependent upon certain key assumptions including the expected future volatility of the Group's share price at the date of the grant.
The Group also issues cash-settled share-based payments to certain employees. The payments are measured at fair value at the date of the grant, and are subsequently revalued at each balance sheet date, using the Monte Carlo model.
Taxation
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the date of the statement of financial position.
Deferred taxation is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred taxation liabilities are recognised on all taxable temporary differences. Deferred taxation assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred taxation is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted at the statement of financial position date. The carrying value of deferred taxation assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which taxable temporary differences can be utilised. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Pension Costs
Contributions to the Group's defined contribution pension scheme are charged to the statement of comprehensive income in the period in which they become payable.
Key judgements and sources of estimation uncertainty
The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or where assumptions or estimates are significant to the financial statements are detailed below.
Assessment of useful economic lives of property, plant and equipment
The Group depreciates the property, plant and equipment, using the straight-line method, over their estimated useful lives. The estimated useful life reflects management's estimate of the period that the Group intends to derive future economic benefits from the use of the Group's property, plant and equipment. Changes in the expected level of usage and technological developments could affect the useful economic lives of these assets which could then consequentially impact future depreciation charges.
Impairment of non-current assets
Property, plant and equipment is recorded at historical cost less accumulated depreciation and any accumulated impairment losses. Network assets comprises assets purchased at cost and fair value and built at cost, together with capitalised labour directly attributable to the cost of construction.
The carrying values of property, plant and equipment and intangible assets other than goodwill, within a cash generating unit, are reviewed for impairment only when events indicate the carrying value may be impaired. Impairment indicators include both internal and external factors. Examples of internal factors include analysing performance against budgets and assessing absolute financial measures for indicators of impairment. Examples of external considerations assessed for indications of impairment include wider economic factors.
Where impairment indicators are present, the recoverable amounts of assets are measured. Asset recoverability requires assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets, using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of uncertain matters. In particular, management has regard to assumptions in respect of revenue mix and growth rates.
Classification of network assets as inventory
Certain network assets were classified as inventory assets during 2016. Management believes this classification is appropriate given that the Group intends to sell network capacity assets on a regular basis where it is considered to be a strategically viable product.
Revenue recognition of installation revenues
Installation revenues are a proportion of the total contract value; management assess this and give appropriate consideration to a range of factors in determining installation revenues on a contract by contract basis. Factors include contract length, technical challenges in delivering the contract and assessment of any associated local economic issues.
2. SHARE CAPITAL
As at As at
30 Jun 31 Dec
2017 2016
GBP'000 GBP'000
Authorised, called up, allotted
and fully paid
265,672,644 (unaudited) ordinary
shares of GBP0.01 each (31 December
2016 (audited): 265,672,644) 2,656 2,656
5,653,865 (unaudited) deferred
ordinary shares of GBP0.01 each
(31 December 2016 (audited): 5,653,865) 57 57
--------- ---------
2,713 2,713
3. SUBSEQUENT EVENTS
Equity Raise
On 28 July 2017 the Group raised gross proceeds of GBP201.8m from an equity placing and an offer for subscription. This capital raising required the allotment of 366,978,818 new shares, which were funded at 55p per share.
Acquisition of Entanet
On 2 August 2017 the Group completed the acquisition of 100% of Entanet International Limited, for GBP29.0m on a cash and debt-free basis. This is being treated as a business combination as per IFRS 3.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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