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Arqiva Q3 FY18 financial results
Double-digit EBITDA growth reflects improved sales mix and strong performance from Terrestrial Broadcast business. FutureFit programme savings embedded and delivering operating efficiency across the Group.
London, UK, 17 May 2018: Arqiva, one of the UK’s leading communications infrastructure and media services providers with significant investments in essential communications infrastructure, announces its results for the nine-month period ended 31 March 2018.
- Group revenue in the period was up 2.9% to £722.1m (9M 2017: £701.8m)
- EBITDA increased 10.2% during the period to £386.8m (9M 2017: £350.9m)
- Revenue in the Terrestrial Broadcast business grew 8.1% to £363.6m (9M 2017: £336.2m)
Revenue in the period was up 2.9% to £722.1m from £701.8m in the same period last year. Revenue from like for like continuing operations, which accounts for last year’s WiFi business disposal, increased 4.0%.
- Revenue in our Terrestrial Broadcast business grew 8.1% to £363.6m from £336.2m in the same period last year. This performance was driven by increased activity in relation to our 700MHz clearance programme as well as strong performance from our DAB business.
- Revenue in our Telecoms & M2M business grew 1.3% year-on-year to £258.0m from £254.8m in the same period last year. Revenue growth from like for like continuing operations in the Telecoms & M2M business was 4.2%. This growth was principally driven by a 6.2% increase in revenue from our telecoms towers business.
- Revenue in our Satellite and Media business decreased 9.3% year-on-year to £100.5m from £110.8m in the same period last year. This was a result of our planned exit from a number of low-margin contracts and was partly offset by the rollout of new, higher margin services including new HD channels within the UK DTH business.
EBITDA, a key measure of the Group’s financial performance, increased 10.2% during the period to £386.8m (9M 2017: £350.9m). This pleasing performance was mainly caused by the combination of an improving sales mix and a lower cost base resulting from our FutureFit programme becoming embedded across the Group.
Net Cash inflow from operating activities during the period was £465.1m, up 11.9% from £415.6m in the same period last year.
Net capital expenditure during the period was £123.4m, up 9.0% from £113.2m in the same period last year, predominantly driven by the 700MHz clearance programme.
“Arqiva continues to play a key role in the delivery of Britain’s digital future. With exciting projects like 700MHz clearance and the ongoing rollout of our smart meter network, we are ensuring the best possible connectivity is made available to the UK’s consumers, broadcasters, network operators and service providers. The progress we have made during the first nine months of this year is testament to the efforts of our people and gives me tremendous confidence in our ability to deliver our targets for the long term.
The Company’s continued revenue growth and strong operating cash generation demonstrate the success of the work we have done to improve the quality and efficiency of our operations. As we move into the final quarter of the year, we will continue to focus in these areas to ensure we finish the year as strongly as possible.”
Q3 Developments by business area
700MHz Clearance and DTT Spectrum
The Group continues to work closely with the major broadcasters and Ofcom to clear the 700MHz spectrum band for auction to the UK’s mobile network providers in advance of future 5G technology. Arqiva is progressing well in this important project with all planned clearance events currently being completed on time.
Digital Radio (DAB) rollout
Arqiva completed the delivery of its Commercial Local DAB expansion programme as at 31 March 2018, delivering 221 new transmitters at local sites and taking local DAB coverage to over 91%. The Group’s long-term strategy of supporting DAB digital radio take-up continues to show strong results with more than six in ten people in the UK now having a DAB digital radio.
Telecoms & M2M
Smart Metering Rollout
Arqiva’s smart-metering network rollout now covers 93% of premises in the North of England and Scotland, in line with the Group’s delivery plan. The Group is also making strong progress in the Thames Water London region, where there are now over 282,000 meters installed (an increase of circa 27,000 since the previous quarter) and communicating with our network. Arqiva is now targeting full network coverage across the entire Thames Water London region by the end of 2018.
The UK’s four Mobile Network Operators (MNOs) continue to increase their 4G network coverage using Arqiva’s infrastructure. Since rollout began in 2014, Arqiva has completed 7,933 4G equipment upgrades to ensure that MNOs achieve their coverage requirements.
The Group will continue to invest in its core telecoms and broadcast infrastructure markets with a continued focus on operating these businesses more efficiently in order to deliver sustained growth in earnings. Net Capital Investment is anticipated to reduce in line with the phasing of expenditure on the Group’s major capital programmes.
Figures quoted within this release are for the Arqiva Broadcast Parent Limited Consolidated Group