Telecoms regulator Ofcom is proposing to foster "network-based competition" to help speed up the UK's migration to fibre optic broadband cables. For CityFibre Infrastructure (CITY) - one of just two rivals outside of London to BT's (BT) dominant Openreach - this is good news. Chief executive Greg Mesch thinks that the attractive regulatory environment will help the company achieve its target of laying broadband cable in 100 cities in the UK.
In 2016, CityFibre made big strides towards this goal. It now has a presence in 42 UK cities having increased its total number of connected customer premises from 1,200 to 3,962. Nearly two-thirds of this came from organic expansion, with the remainder from connections added via the acquisitions of KCOM and Redcentric. The outlook is also good, with a further 3,558 connections already under contract.
This expansion helped the group swing into an adjusted cash profit position of £2.5m (from a £2.9m loss in 2015), after excluding big depreciation and amortisation costs and £1.9m of one-off charges relating to acquisitions. Broker finnCap expects the group's first adjusted pre-tax profit to come in 2018, although losses of £4.8m are expected in the current year (from an £8.5m loss in 2016).
CITYFIBRE INFRASTRUCTURE (CITY | ||||
|---|---|---|---|---|
| ORD PRICE: | 55.5p | MARKET VALUE: | £147m | |
| TOUCH: | 55-56p | 12-MONTH HIGH: | 73p | LOW: 43p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 41p | NET DEBT | 40% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.7 | -6.5 | na | nil |
| 2013 | 1.9 | -6.3 | na | nil |
| 2014 | 3.8 | -7.1 | -0.09 | nil |
| 2015 | 6.4 | -6.4 | -0.06 | nil |
| 2016 | 15.4 | -12.6 | -0.05 | nil |
| % change | +140 | - | - | - |
Ex-div:na Payment:na | ||||
