For the quarter ended 31 March 2015:
- solid sales and monthly incremental service revenue performance
- continued growth in recurring revenue, gross margin and adjusted ebitda
- completed delisting from the singapore stock exchange
London, UNITED KINGDOM – 26 May 2015 – euNetworks Group Limited, Europe’s provider of bandwidth infrastructure services, announced results for the three months ended 31 March 2015. Sales achieved were €789k in Q1 2015, up 7% from Q1 2014. While the value of services installed in the quarter fell, the units installed from Q1 2014 grew 28%. Disconnection management remained strong, with 44% of disconnections due to service replacements. Average churn was 1%, improving from the average 2014 level of 1.1%. Solid sales performance and low disconnections delivered €209k in monthly incremental service revenue (MISR), up 35% from Q1 2014. This positions the company well for growth in recurring revenue in quarters to come.
| (€k) |
Q1 2015 |
Q1 2014 |
% change |
Q4 2014 |
% change |
| New Sales |
789 |
737 |
7 |
784 |
1 |
| Installations |
585 |
641 |
(9) |
735 |
(20) |
| Monthly Incremental Service Revenue |
209 |
155 |
35 |
124 |
69 |
| (€m) |
Q1 2015 |
Q1 2014 |
% change |
Q4 2014 |
% change |
| Total Revenue Recurring Revenue |
27.8 27.8 |
25.4 24.5 |
9 14 |
27.2 27.2 |
2 2 |
| Gross Profit |
21.5 |
18.7 |
15 |
20.8 |
3 |
| Gross Profit Margin % |
77.5% |
73.5% |
5 |
76.6% |
1 |
| Adjusted EBITDA(1) |
7.6 |
6.5 |
16 |
7.4 |
3 |
| Capital Expenditure |
9.2 |
6.8 |
n/a |
6.1 |
n/a |
| Proxy Cash Flow(2) |
(1.6) |
(0.3) |
n/a |
1.3 |
n/a |
- Adjusted EBITDA means EBITDA before the deduction of share option expense.
- Proxy cash flow is calculated as Adjusted EBITDA less capital expenditure.
Recurring revenue was €27.8m in Q1 2015, improving 14% from Q1 2014 and 2% from Q4 2014. Gross profit was €21.5m, up 15% from Q1 2014 and 3% from Q4 2014. Gross margin continued to improve, reaching 77.5% in the quarter, up from 73.5% in Q1 2014 and 76.6% in Q4 2014. Adjusted EBITDA was €7.6m in Q1 2015, up 16% from Q1 2014 and by 3% from Q4 2014. This was despite pressures from foreign exchange movements and costs incurred associated with delisting the company. Capital expenditure was higher in the quarter at €9.2m. This contributed to lower proxy cash flow of €(1.6)m in Q1 2015. “Our sales performance continues to be solid, with our ability to deliver high bandwidth network solutions to the wholesale, content, media and finance segments driving us forward,” said Brady Rafuse, Chief Executive Officer of euNetworks. “MISR is our lead indicator for future growth in our monthly recurring revenue, with of course some lag due to installation timings. The solid Q1 growth in MISR positions us well for revenue growth in 2015.”
“The financial results reported today reflect the continued momentum we see in the business,” said Rafuse. “Our recurring revenue, gross margin and adjusted EBITDA positions continue to improve.” “On the corporate side, the company was delisted from the Singapore Stock Exchange on 20 March 2015. This followed the initiation of the mandatory general offer last year by EUN Holdings, LLP, a consortium put together by Columbia Capital, our largest shareholder. With this change we continue to develop the business, focusing on our operating region of Europe. We are excited for the opportunities ahead and thank our stakeholders for their support.”
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