Arqiva reports strong Q1 results

Delivering on the Group’s strategy to enable a vibrant digital economy.

Arqiva, the UK’s largest independent towers company and communications infrastructure group, announces strong Q1 results for the three months to 30 September 2016. The results for the Arqiva Broadcast Parent Limited group were:

• Revenue up 10.3% at £230.2 million (Q1 2015 £208.7m)
• EBITDA pre-exceptional costs were up 11.3% at £112.9m (Q1 2015 £101.4m)
• Operating free cash flow of £41.2 million, an increase of £73.1 million versus prior period

Arqiva provides critical infrastructure for use by mobile telecoms network operators, TV and radio broadcasters, satellite TV broadcasters and is a leading provider of smart metering and machine-to-machine (M2M) communications.

“We continue to be excited about our position within the UK’s vibrant digital economy. We are pleased to announce strong and sustainable growth in all our reported figures over the last quarter, and have continued to focus our investment in the right opportunities and projects such as small cells to support 4G and, in the future, 5G growth. We are encouraged by recent government announcements regarding digital infrastructure.

“It is clear that the UK population continues to demand a mix of media delivery services – Digital Terrestrial Television (DTT), cable, satellite and internet - as TV and radio consumption habits evolve with advances in technology.  We at Arqiva are more convinced than ever that fast download speeds for some people some of the time is not good enough for networks which are to support a true digital economy.  What is needed are networks which deliver high upload speeds and ultrafast download speeds to everyone at all times, securely and reliably.”

Recent developments since June 2016 include:

In Terrestrial Broadcast, Arqiva is continuing to work on the 700 MHz clearance and DTT spectrum as required by Ofcom’s plans to clear this spectrum to allow it to be auctioned to mobile network providers. Arqiva is responsible for the spectrum planning, network design, programme management, infrastructure changes, service continuity, asset replacement and retuning broadcast transmitter to enable broadcaster to move into a lower frequency. This will generate cash flows from 2016 to around 2021.

  • The Group is also progressing with the delivery of Commercial local DAB. The programme is part of an initiative to meet the local DAB coverage threshold of 90% set by the UK Government in 2010. Arqiva is required to deliver new transmitters or upgrades at 220 sites and as at 30 September 2016 work had been completed at 185 sites. The remainder of the work will be completed in the new calendar year.

In Telecoms and M2M, Arqiva completed the sale of the WiFi business to Virgin Media. Arqiva remains focused on growing its small cells and Distributed Antennae Systems (DAS) solutions for indoor and outdoor communication.

The four UK Mobile Network Operators (‘MNOs’) continue to increase their 4G network coverage. Arqiva is carrying out large volumes of antenna and feeder upgrade projects resulting in a significant increase in installation services revenues. By 30 September 2016 Arqiva had completed 4,150 4G upgrades and is looking at a further c3,800 upgrades to be completed in the next 15 months.

As part of a longer term strategy to prepare the way for higher capacity mobile networks, Arqiva has been developing its outdoor small cells proposition using low power base station to provide street level network capacity to MNOs, particularly in dense urban areas. Trials are underway in Hammersmith and Fulham.

In M2M, Arqiva is rolling out smart energy metering as part of a 15-year contract signed in September 2013 with the Data and Communication Company (DCC). The Group is earning recurring revenues under the contract and additional streams of revenue will be triggered as it approaches go-live.

Arqiva has completed two major programme implementation phases with Thames Water for the provision of smart meters. The service is live with more than 100,000 meters now installed. This contract was signed in March 2015 for an initial six-year term that is extendable up to a total of 16 years. The service is expected to cover 3 million homes once fully deployed.

In July 2016 Arqiva won a multi-year contract with Anglian Water to deliver a trial smart water metering network of 7,500 meters. The first phase of coverage network build is nearing completion.

The Group has also successfully completed its refinancing within the last week, extending the maturity of its facilities and simplifying its financing arrangements.

ENDS

About Arqiva:

Arqiva is a leading UK communications infrastructure and media services provider dedicated to connecting people wherever they are through the delivery of TV, radio, mobile and the Internet of Things (IoT). We are an independent provider of telecom towers, with circa 8,000 active sites across Great Britain, and are also the only supplier of national terrestrial television and radio broadcasting services in the UK. Our advanced networks support the exponential growth of connected devices and the ever-increasing demand for data from smartphones to tablets, connected TVs, smart meters, cars and medical devices.

Customers include major UK and international broadcasters such as the BBC, ITV, Sky Plc., Turner Broadcasting, the independent radio groups, major telco providers – including the UK's four mobile network operators – and retail, leisure, energy and water companies.

For further information, please contact:

Charlie Harrison or Liz Morley

Bell Pottinger

+44 (0)203 772 2595

PRArqiva@bellpottinger.com

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