London, UK, 10 September 2018: Arqiva, one of the UKs leading communications infrastructure and media services providers with significant investments in essential communications infrastructure, announces its results for the financial year ended 30 June 2018. These results reflect a year of significant growth in revenue, profit and cash generation which underscore Arqiva's vital role in enabling the UK's success in the digital economy. Highlights
Continued strong growth in our core business augmented by successful delivery of significant programmes including 700MHz clearance, DAB rollout and continued delivery of smart-metering networks
Ongoing improvement in our operational base with a focus on high-margin business and building strong customer relationships
Strong performance resulted in material improvement in EBITDA during the year
Following these continued strong financial and operational results, the Group today announces its decision to launch a series of meetings with investors with the aim of refinancing the existing junior notes
Full Year Financial Results Revenue in the year was up 2.2% to £962.4m from £941.3m last year. Organic revenue growth from continuing operations, excluding the revenue of the WiFi business sold last year, was 3.0%.
Revenue in our Terrestrial Broadcast business grew 8.6% to £487.5m from £449.0m last year. This performance was driven by increased 700MHz clearance activity as well as the ramp-up in our DAB rollout programme.
Revenue in our Telecoms & M2M business grew 0.9% year-on-year to £341.4m from £338.2m last year (excluding the revenue of the WiFi business sold last year). This growth was driven by a strong performance from our telecoms towers business where new site assignments and upgrades grew revenue by £8m, and by the continued delivery of our smart-metering energy network which grew revenue by £14.4m during the year. This was partially offset by a reduction in lower margin revenues such as Installation Services.
Revenue in our Satellite and Media business decreased 9.1% year-on-year to £133.5m from £146.9m in the same period last year. This was a result of our ongoing rationalisation of these services and the ongoing transition away from low margin contracts in the division.
EBITDA, a key measure of the Group's financial performance, increased 9.3% to £517.5m during the year (2017: £473.5m). This strong performance was mainly caused by completion of our DAB radio rollout, increased 700 MHz Clearance activities and growth in Telecoms & M2M EBITDA, coupled with the effects of our transformation programme and our increasingly efficient cost base.
Net Cash inflow from operating activities during the period was £572.1m, up 16.8% from £489.7m in the same period last year, owing to the strong EBITDA performance and to working capital inflows.
Net capital expenditure during the period was £164.8m, up 2.2% from £161.3m in the same period last year, predominantly driven by significant projects like the 700MHz clearance programme, which added materially to the year's profitability.
Simon Beresford-Wylie, Chief Executive of Arqiva, commented:
These financial results demonstrate both the ongoing strength of our core business and the ability of our people to deliver complex projects that make a real impact on the UK's competitiveness in the digital economy.
Whether through spectrum clearance, smart-metering, DAB radio or digital television, Arqiva continues to underpin the country's most popular digital services. Yet we are not merely a participant. We are also helping to shape the future of our industry by introducing new technology that ensures reliable, high-quality service provision across the whole country. The response of our customers to these efforts has been extremely positive during the year and gives me great confidence in the strategy we are pursuing .
Key developments by business area Terrestrial Broadcast 700MHz clearance Arqiva continues to deliver the 700MHz clearance programme on time and to plan. The programme is designed to release the key 700MHz spectrum band for auction to MNOs for 5G use. During the summer of 2018, a 310m tall temporary steel mast was erected alongside the existing tower at Emley Moor to ensure uninterrupted service during the works which will continue until early 2020.
Transitioning to hybrid digital TV with Freeview Arqiva signed a five-year agreement with BBC, ITV and Channel 4 to accelerate Freeview's transition to a fully hybrid platform. This will see it provide the best in free-to-view live and on-demand TV, while also enabling viewers to access their favourite over-the-top subscription services at the same time. This cost-effective method will ensure viewers have terrestrial access to the live programming best delivered through that medium, while simultaneously providing access to the on-demand services they want most.
DAB rollout Arqiva continues to make strides in supporting the take-up of DAB digital radio in the UK, having completed the latest phase of network rollout for the BBC and commercial local radio. The UK's official radio listening data source confirmed during the period that more than six in 10 consumers now have a digital radio, and showed that digital listening has exceeded 50% of the UK's total for the first time.
Telecoms & M2M Helping MNOs meet UK coverage obligations During the 2018 financial year Arqiva played a key role in helping the UK's MNOs meet their obligation to provide the UK landmass with 90% voice coverage. Arqiva also supported Telefonica UK (O2) in meeting is obligation to provide a minimum 95% level of indoor data coverage to all UK premises by 31 December 2017.
As of 30 June 2018, Arqiva has completed 8,245 4G equipment upgrades as part of this effort, along with a significant number of anten
