Third Quarter 2011
- Acquired TeraGate AG Storage Optical Network
- Completed rights issue with net proceeds of more than €72m
- Total revenue of €24.1m, up 117% from 3Q 2010
- Gross profit of €15.8m, up 98% from 3Q 2010
- Gross margin of 65.6%, down from 72.1% in 3Q 2010
- Adjusted EBITDA of €4.3m, improving from €0.8m in 3Q 2010
- Net loss of €(2.2)m, improving from €(3.8)m in 3Q 2010
- 43 new customers gained in the quarter
London, UNITED KINGDOM – 11 November 2011 – euNetworks Group Limited, announced strong third quarter results, with a further acquisition, a successful rights offering and continued sustained growth of the business.
Following the acquisition of LambdaNet Deutschland Communications AG (“LambdaNet”) in 2Q 2011, euNetworks completed the acquisition of TeraGate AG Storage Optical Network (“TeraGate”) on 29 July 2011. The results announced today include a full quarter of LambdaNet financials and two months of TeraGate financials.
In connection with the LambdaNet acquisition in May 2011, the Group announced the intention to undertake a rights issue. That was completed on 6 September 2011, raising more than €72m. The proceeds have repaid shareholder loans and the accumulated interest associated with funding recent acquisitions. The balance will support customer oriented capital expenditure, working capital and fund further growth opportunities.
euNetworks delivered significant growth in the quarter, both excluding and including the financials of the two acquired companies. Total revenues grew by 117% year on year, from €11.1m in 3Q 2010 to €24.1m in 3Q 2011. Recurring revenues were €21.2m, up 114% from 3Q 2010. Network revenues continued to grow, up 146% to €19.2m in 3Q 2011. Excluding LambdaNet and TeraGate, network revenues grew 38% year on year and by 27% from 2Q 2011. Gross profit in the quarter increased by 98% to €15.8m, up from €8.0m in 3Q 2010. Gross margin declined to 65.6%, largely reflecting the addition of LambdaNet and TeraGate to the Group. As euNetworks continues to integrate these businesses, leveraging euNetworks’ network, the Group anticipates improvement in gross margin. Adjusted EBITDA1 was €4.3m for the quarter, indicating further improvement as the business scaled. Excluding acquisition costs of €0.2m relating to TeraGate and €0.3m of one-off restructuring costs, which were expensed in the period, underlying Adjusted EBITDA was €4.8m.
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