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U.K. altnet adds metro fibre assets in three cities; first-half net loss more than doubles on higher costs.
U.K. altnet CityFibre extended its reach on Monday with the acquisition of network assets from managed services provider Redcentric.
The £5 million deal gives CityFibre metro fibre networks in Cambridge, Portsmouth and Southampton – growing its network coverage to 40 cities in total. It also bolsters CityFibre’s presence in Derby, Northampton, and Nottingham.
The transaction will see Redcentric become a major new customer of CityFibre, with the company agreeing a long-term dark fibre leasing deal from CityFibre worth £4.5 million. Redcentric has also agreed a framework deal covering the use of CityFibre’s infrastructure in other cities.
"Once again we’ve shown that underutilised legacy fibre assets can find a new home in which to flourish within CityFibre’s wholesale shared infrastructure model. We’re very pleased to have secured a deal structure which benefits both our new partner and us, and we look forward to working with Redcentric across our broader national footprint," said CityFibre CEO Greg Mesch, in a statement.
CityFibre said it aims to make its new network assets available to wholesale customers.
The announcement was made the same day that CityFibre published its interim financial results.
For the six months to 30 June, the company’s revenue surged to £6.63 million from £2.69 million in the corresponding half of 2015.
"We have had a very strong six months underpinned by an excellent performance by our commercial and operations teams, in which we have amassed a significant new business pipeline," said Mesch, in a separate statement.
"Our business now sits at the forefront of transforming the U.K.’s digital infrastructure and remains well placed to capitalise on a number of significant near term commercial opportunities," he said.
However, administrative expenses almost doubled to £9.9 million, driven by costs related to CityFibre’s £90 million acquisition of network assets from Kcom in January.
As a result, CityFibre’s first-half operating loss widened to £4.19 million from £2.78 million, while its EBITDA loss increased to £2.33 million from £1.9 million.
CityFibre’s net loss more than doubled to £7.49 million from £2.84 million.
