For the quarter ended 31 March 2016:
London, UNITED KINGDOM – 11 May 2016 – euNetworks Group Limited, a provider of bandwidth infrastructure services in Europe, announced results for the three months ended 31 March 2016. New sales reached €970k in Q1 2016, up 23% from Q1 2015 and up 18% from Q4 2015. Service installations were high at €706k in the quarter, increasing from Q1 2015 and Q4 2015. The level of disconnections was lower than prior quarters, with average churn at 0.7%, an improvement from 1.0% in Q1 2015 and 0.9% in Q4 2015. Total monthly incremental service revenue (MISR) was €381k in Q1 2016, up from €209k in Q1 2015 and €197k in Q4 2015. While underlying MISR performance was strong in the quarter, foreign exchange headwinds had a c€350k impact on reported revenue.
|(€k)||Q1 2016||Q1 2015||% change||Q4 2015||% change|
|Monthly Incremental Service Revenue||381||209||82||197||93|
|(€m)||Q1 2016||Q1 2015||% change||Q4 2015||% change|
|Total Revenue Recurring Revenue||30.6 30.6||27.8 27.8||10 10||30.6 30.6||0 0|
|Gross Profit Margin %||78.0%||77.5%||1||77.6%||0|
|Proxy Cash Flow(2)||(1.7)||(1.6)||n/a||(1.0)||n/a|
Recurring revenue was €30.6m in Q1 2016, growing 10% from Q1 2015 and in line with Q4 2015. Gross profit was €23.9m, up 11% from Q1 2015 and 0.4% from Q4 2015. Gross margin improved to 78.0% in Q1 2016, from 77.5% in Q1 2015 and from 77.6% in Q4 2015. Adjusted EBITDA was €9.8m in Q1 2016, improving by 29% from Q1 2015 and in line with Q4 2015. Capital expenditure supporting revenue growth was €11.5m in the quarter as euNetworks continues to invest for growth. This contributed to proxy cash flow of €(1.7)m in Q1 2016.
“Q1 2016 was a strong quarter for the business in terms of growth, operating performance and delivering significant, customer driven network development projects,” said Brady Rafuse, Chief Executive Officer of euNetworks. “Sales reached a new level in performance and service installations were high, partly assisted by the delivery of euTrade services in the quarter. Disconnection management delivered an average churn of 0.7%, well below the industry average. The growth we achieved in our resulting incremental service revenue is a strong start for 2016.” “For the quarter, our financial performance remained solid, with 10% growth in recurring revenue despite the impact of foreign exchange. Gross profit increased by 11% and Adjusted EBITDA by 29% from Q1 2015,” said Rafuse. “Our capital expenditure was higher than Q4 2015 and Q1 2015, in line with our continued strategy of investing in our network in support of customers and our organic growth.
Following the announcement of two new long haul fibre routes to Marseille we have also reconstructed and expanded our long haul DWDM solution to Stockholm, adding diversity, unique routes and directly connecting further data centres in the process. There are a number of additional strategic network investments projects that we will announce in due course, which are closely aligned with our customers’ bandwidth demands in 2016.”
Further review and discussion of the performance of the Group for Q1 2016 can be found in the accompanying results supplement available to download.
euNetworks is a bandwidth infrastructure company, owning and operating 17 fibre based metropolitan networks connected with a high capacity intercity backbone covering 51 cities in 15 countries. The company leads the market in data centre connectivity, directly connecting over 430 today. euNetworks is also a leading cloud connectivity provider, directly connecting to all key cloud platforms with access to additional platforms. The company offers a targeted portfolio of metropolitan and long haul services including Dark Fibre, Wavelengths, and Ethernet. Wholesale, finance, content, media, data centre and enterprise customers benefit from euNetworks’ unique inventory of fibre and duct based assets that are tailored to fulfil their high bandwidth needs.