The latest annual accounts from network operator and broadband ISP CommunityFibre, which has deployed a 10Gbps capable Fibre-to-the-Premises (FTTP) network to 1.32 million UK premises (mostly in Greater London), reveals that their revenue grew by 109% to £41.7m at the end of 2023. But losses before tax surged to £134.6m (2022: £50.4m).
The provider, which is currently being backed by a finance facility of £985m, has had somewhat of a rough year due to the rising cost of build, strong market competition and high interest rates (a not uncommon challenge in the current market). This was reflected by their previous slowdown in network build and related redundancies during 2023 (here and here), which resulted in CF pivoting their strategy to focus on growing customer uptake.
The latest company accounts for CF (note: we found the text in this to sometimes be barely legible), which cover the year to the end of December 2023, similarly confirm that they expected to “reach a peak network size in excess of 1.3 million residential premises and 0.2 million business premises primarily within Greater London during the first half of 2024” (fibre coverage), which was largely achieved.
The results add that the “group’s core business challenge is [now] to connect customers quickly enough, with low enough customer acquisition and connect costs and tightly controlled network maintenance and other overheads to ensure sufficient economic returns on its assets.” The good news is that CommunityFibre’s revenues and gross profit have surged, but those gains are still being overshadowed by a larger surge in losses.
Summary of Community Fibre’s 2023 Results
➤ Total committed debt facility of £685m, with £605m drawn
➤ Revenue grew by 109% to £41.7m (2022: £20m), due to customer growth
➤ Gross profit increased by 86% to £35.8m (2022: £17m)
➤ Total employees grew to 930 (2022: 788), although this doesn’t yet take account of the November 2023 redundancies (these won’t show up until their 2024 accounts)
➤ Total losses before tax grew to £134.6m (2022: £50.4m)
➤ Residential premises passed grew to 1,288,000 (2022: 780,000)
➤ Customers connected 222,000 (2022: 111,000), although the most recent figure from August 2024 puts them at 300,000 (here) and we think it may now be c.310,000.
➤ Total non-curent assets of £604m (2022: £432.9m)
➤ Total current assets of £35.9m (2022: £45.6m)
Despite the challenges, it’s worth noting that CF may not have completely given up on network expansion, and consolidation could be one option. Back in September 2024 we noted a report on Sky News, which claimed that the operator had made an offer worth around £300m to acquire rival altnet G.Network in London, but were rebuffed (here). Equally, CF could be a target for larger consolidators, such as nexfibre, CityFibre or possibly even Netomnia (Brsk).
The other bit of positive news today is that, according to a separate report in the Telegraph (paywall), CF has just managed to raise a further £125m in funding (debt raise) – taking their total to c.£1.1bn. This has come from a string of banks including JP Morgan, Barclays, Landesbank Baden-Württemberg (LBBW), Sequoia and Alpha Bank. But oddly, CF hasn’t yet put out an official press release about this.
Olaf Swantee, Chair of Community Fibre, said:
“The lenders and our shareholders share the view that Community Fibre’s momentum will further strengthen its position as the best and largest full fibre only provider in London and is a vote of confidence in its strong management team and their ability to commercialise the large London network.”
UPDATE 6:50am
Added a bit of extra detail about CF’s new £125m debt raise. The company also announced it has been EBITDA positive since April 2024.