CityFibre Infrastructure Holdings PLC Preliminary Statement of Annual Results Year Ended 31 December 2017

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RNS Number : 8546L

CityFibre Infrastructure Hldgs PLC
24 April 2018
For immediate release 24 April 2018
CITYFIBRE INFRASTRUCTURE HOLDINGS PLC

('CityFibre' or the 'Group' or the 'Company')
AUDITED FULL-YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
CityFibre (AIM: CITY), the largest alternative provider of wholesale full fibre infrastructure in the UK,
today reports audited full-year results for the Group for the year ended 31 December 2017.
Financial Highlights:
· Turnover increased 126%, to £34.8m (2016: £15.4m), of which £15.4m is attributable to the
consolidation of Entanet's results for the five month post acquisition period
· Gross profit increased 48.4% to £20.1m (2016: £13.5m), of which Entanet contributed £3.8m. Gross
profit up £2.8m (21%), excluding the contribution from Entanet
· Gross margin of 57.8% (2016: 88.1%). Excluding the impact of Entanet, gross margin of 84.5%
· Adjusted EBITDA1 of £4.5m (2016: £2.5m)
· Initial Contract Value2 ('ICV') of £26.3m added in the period, with a further minimum volume
commitment from Vodafone over the initial 10 year period expected to exceed £200m
· Net loss after tax increased to £16.6m (2016: £12.6m)
Operating Highlights:
· £201.8m fundraising to fund growth of the Group's full fibre network and the acquisition of Entanet, a
provider of wholesale fibre connectivity and communications services to business internet service
providers
· Strategic partnership with Vodafone to deliver FTTP to up to 5 million homes by 2025
· Cumulative on-net connections sold (ex-FTTP and Entanet) up 27% versus 2016, to 9,204
· Cumulative on-net connections delivered (ex-FTTP and Entanet) up 26% versus 2016, to 4,975
· Entanet's off-net leased lines estate up 14%, to 3,954 from 3,456 in 2016
· Total route kilometres of fibre infrastructure expanded to 3,740km, versus 3,383km in 2016
Post-Period Highlights:
· Milton Keynes, Aberdeen and Peterborough announced as the initial three FTTP cities under the first
phase of the Vodafone partnership
· Construction underway in Milton Keynes, with Aberdeen and Peterborough in advanced planning phase
· Debt refinancing process progressing well, closing expected H2 2018
· Coventry, Edinburgh, Huddersfield and Stirling will be the next cities to benefit from the deployment of
the full fibre broadband programme. The investment in these new cities, together with Milton Keynes,
Aberdeen and Peterborough, will bring Vodafone and CityFibre's FTTP roll-out above the half a million
premises, and brings CityFibre's committed infrastructure investment in the project to at least £315m.
1
Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, also excluding share-based payments and
significant non-recurring expenses.
2
Initial contract value ('ICV') is the total contracted customer revenues receivable up to the first contract break point.
Greg Mesch, Chief Executive of CityFibre, commented:
"I am delighted to report that CityFibre has made excellent strategic progress throughout 2017, a year in which
we moved a step closer to realising our long-held vision of a full fibre future across the UK. We continued to
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make significant headway within the public sector market and we now are well-positioned to benefit from a
more supportive public policy environment, including the DIIF and LFFN initiatives.
"We've strengthened our positioning in the business segment following the acquisition of Entanet, which brings a
well-developed wholesale channel and service delivery platform that advances us several years in our evolution.
Entanet is placing increasing volumes of new business on-net with CityFibre each month.
"We completed 2017 by signing a landmark FTTH agreement with Vodafone, which is the most significant
alternative communications infrastructure development in the UK in at least 30 years.
"CityFibre is now firing across all our key market verticals and our focus is firmly on programme delivery and
continued commercialisation."
The information communicated in this announcement is inside information for the purposes of Article 7 of
Regulation 596/2014.
For further information, please contact:
CityFibre Infrastructure Holdings plc www.cityfibre.com

Greg Mesch, Chief Executive Officer Tel: 020 3510 0602
Terry Hart, Chief Financial Officer
James Enck, Head of Investor Relations Tel: 0333 150 6283
finnCap (Nomad and Joint Broker) www.finncap.com

Stuart Andrews / Christopher Raggett (Corporate Finance) Tel: 020 7220 0500
Simon Johnson (Corporate Broking)
Liberum (Joint Broker) www.liberum.com

Steve Pearce / Richard Bootle Tel: 020 3100 2000
Vigo Communications www.vigocomms.com

Jeremy Garcia / Fiona Henson Tel: 020 7830 9701
About CityFibre:
CityFibre is the national builder of Gigabit Cities, the UK's largest alternative provider of wholesale fibre network
infrastructure. It has major metro duct and fibre footprints in 42 cities across the UK and a national long distance
network that connects these cities to major data-centres across the UK and to key peering points in London.
The Company has an extensive customer base spanning service integrators, enterprise and consumer service
providers and mobile operators. Providing a portfolio of active and dark fibre services, CityFibre's networks
address 28,000 public sites, 7,800 mobile masts, 280,000 businesses and 4 million homes.
CityFibre is based in London, United Kingdom, and its shares trade on the AIM Market of the London Stock
Exchange (AIM: CITY). Further information on the Company can be found at www.cityfibre.com
Chairman's statement
It is my pleasure to present CityFibre's audited financial results for the year to 31 December 2017, during which
time the Company has made substantial progress in its strategy of delivering full fibre deployment across its
sizeable UK footprint.
In the past year, the UK telecommunications infrastructure market has undergone what I can only describe as a
"seismic change" with regard to "fibre adoption", with the pace of change accelerating daily. Since it was
founded in 2011, CityFibre's strategy has been focused on establishing a shared wholesale fibre infrastructure
throughout the UK, capable of serving the business community, the public sector, mobile/wireless connectivity,
and ultimately the residential broadband market.
Following decades of underinvestment, both the industry and government have at last awakened to the
importance of full fibre internet infrastructure for the future of the nation's economy, and the Directors and I
believe CityFibre has been the 'lightning rod' in driving awareness and forcing this dramatic shift.
CityFibre is a key player in driving change in the UK's digital infrastructure. The Group's achievements to date
include the delivery of the UK's first Fibre-to-the-Tower ('FTTT') solution based on dark fibre, the single largest
Fibre-to-the-Premises ('FTTP') deployment, and signing an agreement with Vodafone for a mass roll-out of Fibre
to the Home ('FTTH') to potentially 20% of the UK (c.5million homes), with the first phase being at least one
million homes across c.12 UK cities.
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In July 2017, the Group completed a £201.8m equity raise timed with the anticipation of closing a large scale
anchor agreement with one or more large service providers for FTTP deployment across our footprint, thus
allowing us to begin the rollout of FTTP across our existing cities.
Over the course of 2017, CityFibre completed three strategically pivotal transactions. In August 2017, CityFibre
acquired Entanet, a provider of wholesale communication services. CityFibre will be able to leverage Entanet's
established wholesale channel alongside its unique and compelling infrastructure proposition.
In November 2017, the Group achieved a hugely significant milestone, signing a historic agreement with
Vodafone to build full fibre infrastructure to at least one million and up to five million homes in the UK, marking
one of the most significant investments in UK communications infrastructure in the past three decades.
We remain focused and enthusiastic about the prospect of capitalising on our extensive existing network
footprint to deliver future proof full fibre connectivity to customers across all four of our key markets.
We also announced on 24 April 2018 a recommended cash offer from a consortium made up of Antin
Infrastructure Partners and West Street Infrastructure Partners for CityFibre at 81p per share.
Overview of results
Group turnover of £34.8m represents headline growth of 126% compared to the prior financial year, with a
strong contribution of £15.4m from the consolidation of Entanet from August 2017. Excluding the contribtion
from Entanet, CityFibre continued to generate strong organic annual revenue growth of 25.8% to £19.3m (2016:
£15.4m), despite a hiatus in activity in public sector procurement activities during the first three quarters of the
year.
Group Adjusted EBITDA increased 80% to £4.5m (2016: £2.5m), reflecting the strong gross margin foundation of
the business.
The Group ended the period with gross cash of £157.0m and thus remains strongly capitalised as it enters into
the first phase of FTTP deployment with Vodafone, as well as continued organic city expansion and further
development of existing city footprints.
Gross debt at period end was £65.3m. The Company currently has no intention to further draw from existing
facilities, which it intends to refinance early in the third quarter of financial year 2018.
Outlook
The Group continues to make significant progress in achieving its strategic vision, and the Directors and I
congratulate our staff on their commitment, tenacity and hard work in bringing the Group to this critical
juncture in its development. We completed 2017 with considerable momentum, delivering sizable public sector
contracts in the period, further demonstrating the demand for next generation infrastructure.
Clearly our primary focus in 2018 is on execution, delivering on our early stage commitments to Vodafone under
our joint FTTP project and continuing to generate strong organic growth through the expanded wholesale
channel. The Directors and Management continue to assess our resourcing as we move into this new phase of
delivery, against the background of a rapidly evolving UK fibre infrastructure market.
I'm pleased to report that the strong momentum generated in H2 2017 has continued into 2018. We have
begun the execution of our Vodafone committements in addition to securing new business wins through both
Entanet and additional enterprise and public sector sales traction.
The drive towards competitive supply of fibre infrastructure continues to shape the policy environment in which
CityFibre operates. CityFibre has driven positive changes to policy and regulation, and I anticipate further
investments in 2018 as the Government and Ofcom consider any further changes necessary to foster
accelerated rollout of full fibre nationwide.
Chris Stone
Non-executive Chairman
24 April 2018
CEO Review
Operating review
CityFibre delivered another year of strong operational progress in 2017, including the acquisition of Entanet, the
signing of our largest-ever public sector contract in Glasgow, and the landmark agreement with Vodafone to
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kick-start FTTH deployment to up to 5 million homes. We have ended the year with a vastly enhanced platform
for expansion, which is now entirely focused on execution and delivering full fibre capability to our end users.
Our progress since our IPO has been rapid and we firmly believe CityFibre's highly distruptive approach to fibre
investment has delivered a lightning bolt that the UK market has been waiting for.
We are now firmly at the centre of almost unstoppable momentum as the UK finally wakes up to the gigabit
revolution and remain keenly focused on executing our growth objectives.
Entanet acquisition
In July 2017, the Group announced the proposed acquisition of the entire issued share capital of Entanet
Holdings Limited ('Entanet') for a cash consideration of £29.0m (on a debt free cash free basis and subject to
adjustments).
Entanet is a wholesale communications provider which uses third party networks owned by other suppliers to
deliver a wide range of connectivity and telecommunication products and services to Channel Partners,
including broadband, Ethernet, private and wide area networks, IP and PSTN telephony, colocation, hosting and
associated services.
The Directors believe the Entanet acquisition brings together two complementary wholesale capabilities:
CityFibre's national wholesale fibre infrastructure and Entanet's established wholesale product portfolio and
commercial relationships with Channel Partners. Entanet has become the primary route for CityFibre to market
its full fibre connectivity through Entanet's network of Channel Partners.
Entanet's business model is focused on the development and growth of wholesale communications services. It
packages data communications products, including broadband and leased line internet connectivity, IP
telephony and hosting services and makes these products and services available nationally, with approximately
1,500 Channel Partners that serve the business and residential markets.
The acquisition will enable Entanet to offer the delivery of wholesale services across CityFibre's fibre
infrastructure in both existing and future metro towns and cities, providing differentiated gigabit speed full fibre
connectivity services through its established base of Channel Partners. The Board is delighted with the progress
demonstrated by Entanet since acquisition, and confirms it is trading in line with expectations.
Fundraising
In July 2017 - in conjunction with the Entanet acquisition - the Group also announced an intention to raise up to
£185.0m in new equity via an accelerated book-build and private placement, along with up to a further £15.0m
via an Offer for Subscription, totalling up to £200.0m in gross proceeds. The accelerated book-build was
oversubscribed, generating £200.0m in gross proceeds, with a further £1.8m generated through the Offer for
Subscription, resulting in total gross proceeds of £201.8m.
Use of proceeds identified by the Group included the acquisition of Entanet, further investment in construction
of network in both new and existing cities, and initial investment in its FTTP initiative.
Vodafone FTTH partnership
On 9 November 2017, the Group announced the signing of a major strategic partnership with Vodafone. Under
the agreement CityFibre will provide full fibre connectivity in the first phase to a minimum of one million UK
homes in twelve existing CityFibre towns and cities, with the potential to extend this to up to five million UK
homes (approximately 50 towns and cities and representing 20% of the current UK broadband market) by 2025.
Vodafone has entered into a 20 year framework agreement and made a minimum volume-based commitment
for ten years, which scales over the period, maturing at 20% of homes passed. In turn Vodafone has been
granted a period of marketing exclusivity, city by city, for consumer grade FTTH services largely during the
construction period. Over 20 years the first phase of the agreement for one million homes is estimated by the
Company to be worth over £500m. The FTTP network will be fully owned by CityFibre and ultimately made
available to all service providers on a wholesale basis.
Thus far, Milton Keynes, Aberdeen and Peterborough have been identified as the first towns to benefit from full
fibre connectivity, and further cities will be announced over the coming months, with construction having
already commenced in Milton Keynes.
We expect to commence construction in the first five to ten towns and cities in 2018, with the minimum first
phase of the agreement ultimately delivering full fibre access in twelve towns and cities, passing one million UK
homes. Construction of the first phase is expected to be largely complete in around four years.
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The total capital cost of the first phase is expected to be in the range of £500m to £700m. This includes the cost
of the network rollout past one million homes, the cost to connect up homes requesting a service, the costs to
connect up business premises within the footprint of the FTTP network construction, internal capitalised labour
costs and Point-of-Presence ('PoP') costs.
The agreement includes a framework under which both parties could agree to extend the construction
programme to pass up to five million homes by 2025. At five million homes, fulfilment of the full framework
would represent c.20% of the current UK fixed residential and business broadband market and meet 50% of the
Government's target of ten million homes with gigabit-ready full fibre access.
While the agreement relates only to the delivery of FTTP, the rollout of full fibre local networks will deliver a
greater capillarity to the CityFibre network providing significant cost advantages to the Company's wholesale
services for both dark fibre and active (mostly Ethernet) services across all CityFibre's market verticals. The
Company will continue to sell, largely through third party Channel Partners, into the public sector, enterprise
and carrier verticals and directly handles mobile and consumer national service and content providers. The
extended footprint will also serve SMEs and businesses through Entanet's wholesale communications provision
to Channel Partners.
Having dense fibre networks places CityFibre's network infrastructure in closer proximity to all types of user
premises and will deliver a cost advantage to the Company's bidding on future business across all market
verticals.
Public Sector Momentum
In 2017, the Company continued to demonstrate its strength in the PSN (Public Sector Network) space, and
successfully converted a number of contracts in the second half of the year.
The Group began the year with by signing a seven-year contract with MLL Telecom, to supply a public services
network to the City of Stirling. The initial contract value ('ICV') of £1.7m required the initial construction of 20km
of new network to connect 33 sites across the council's estate.
In December, the Group announced a further agreement with Capita, the ICT provider to Aberdeen City Council,
to connect additional core public sector sites within the city boundary to CityFibre's metro network. The initial
contract is for 15 years, with a cumulative ICV of £1.7m. The contract will extend CityFibre's Aberdeen network
to an additional 57 public sector locations, with approximately 17km of incremental network extension, taking
total route kilometres of network in the city to over 100km.
This additional network extension brings the total public sector sites served in Aberdeen to 166, and total sites
sold in Aberdeen to 425. Cumulative ICV booked on the Aberdeen network now totals £6.8m, of which public
sector contract value now totals £3.7m.
Also in December, CityFibre announced its largest public sector award to date, extending its existing Gigabit City
network in Glasgow to an additional 506 Glasgow City Council ('GCC') owned sites in an agreement with a
lifetime value of up to £15.7m over 19 years. The deal represents CityFibre's largest project to date and the
largest UK public services metro network award in 2017.
The construction of an additional 243km of new core network infrastructure will be required to connect the 506
sites across the GCC estate, along with 15 BT exchange-to-exchange links. This will supplement the existing core
metro infrastructure in Central Glasgow built to satisfy existing contracts in the enterprise and public sector
market verticals.
Business customers
Over the course of 2017, the Group maintained a strong focus on the commercialisation of networks through
the conversion of business customers. With the acquisition of Entanet, the Group is now well placed to leverage
Entanet's customer base and drive greater traction across this industry vertical.
All network extensions are designed and deployed under CityFibre's Well Planned City methodology, which
provides the backbone for transformative digital initiatives across further enterprise FTTP, as well as FTTT for
mobile operators, and for a potential extensive FTTP build across the city in future.
The Company will continue to extend its current metro footprint selectively, ensuring that each new metro
project is anchored by long term contracts that deliver a satisfactory return on invested capital and that cover a
substantial portion of projected capital expenditure. Similar policies on returns and capex coverage apply to
both new-metro and densified-metro routes to network expansion.
Key operating metrics
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2017 2016
Cumulative on-net connections sold (ex-FTTP) 9,204 7,281 +27%
Cumulative on-net connections delivered (ex-FTTP) 4,975 3,962 +26%
Total km of fibre infrastructure 3,740 3,383 +11%
Off-net leased lines sold by Entanet 3,954 3,456 +14%
Employees
The Group ended the year with 303 full-time equivalent staff ('FTEs'), versus 143 as at the end of 2016. 108
employees were welcomed to the Group from Entanet on the acquisition date.
Greg Mesch
Chief Executive Officer
24 April 2018
Financial Review
Financial results for 2017 reflect a year of continued organic growth, the acquisition of Entanet and the
significant strengthening of the Group balance sheet through the completion of the £201.8m fundraising on 28
July 2018. The Group accelerated the investment in resourcing the business to commercialise its expanded
footprint and in preparation for the FTTP expansion.
Profit and loss
Revenue increased by 126.3% to £34.8m (2016: £15.4m), driven by contributions from the Entanet Group
acquired, the continued expansion in footprint and incremental revenues from both existing and new cities, as
shown in the table below. Excluding Entanet, revenue growth was 25.8% (2016: 63%). Revenue growth is largely
attributable to the full-year effect of projects signed in 2016 and new sales contracts signed in 2017.
2017 2016
£'000 £'000
Organic revenue 19,320 15,363

Entanet Group contributions 15,448 -
Total Revenue 34,768 15,363
Gross margin decreased by 30 percentage points, to 58%, from 88% in 2016, reflecting the lower margin
revenue of Entanet Group being added in 2017. The underlying CityFibre business experienced a reduction in
gross margin to 84.5%, a slight reduction compared to 2016. The reasons for this are twofold; 1.2% is
attributable to costs of sales on asset sales, and the balance is related to enabling more cities to provide active
services resulting in higher levels of network operations, colocation, backhaul and related costs. The gross
margin per city will increase significantly over time as new customers are added to these active networks.
Administrative costs increased to £27.8m from £18.7m in 2016. Excluding non-recurring costs, depreciation and
amortisation, and share-based payments charges, underlying administrative costs were £15.6m, representing
growth of 41% from £11.1m in the prior year. Of this, Entanet contributed £2.3m; without this underlying
administrative costs were £13.3m. This was a modest increase of 19.8% largely driven by increasing the Group's
FTTP capabilities.
The movements in underlying administrative costs include:
· Staff costs, excluding share-based payments and transaction related costs in respect of the fundraising
activities and strategic transactions, increased by 30% to £10.3m (2016: £7.9m). Average headcount was
189 staff (142 excluding the impact of Entanet), up from 116 in 2016. The increase is primarily due to
the addition of Entanet staff, being £1.8m.
· The Group commenced a significant programme of investment in its FTTP capabilities; some existing
employees were refocused onto this workstream, with costs of c.£1.0m attributable to this workstream
included in the staff costs analysed above.
· Other general administrative costs increased by £0.2m as a result of the expanded number of new and
in-life projects. In particular, pursuing the Vodafone contract was a key activity.
Total non-recurring costs, depreciation and amortisation, and share-based payments charges were £12.2m
(2016: £7.6m) and are detailed below:
· Depreciation increased by £1.7m, to £5.2m, due to the full year increase in the asset base through
acquisitions and significant in-year completed construction projects.
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· During the year the Group incurred transaction costs totalling £3.6m, up from £1.9m in the prior period.
These costs were incurred primarily to execute the fundraising, Entanet Group acquisition and Vodafone
contract in 2017 and the KCOM asset acquisition in 2016.
· Non-recurring costs also included £1.1m of legal and professional fees relating to the presentation of
the Group's position on regulatory activities particularly pertinent to CityFibre, up from £0.9m in 2016.
The Group will continue to engage advisors and take actions necessary to ensure its position is properly
presented and protected.
· Share-based payment charges increased to £1.5m, up from £0.9m in 2016 due to LTIP awards in the
year and a full year's charge for share options awarded in the prior year.
· The amortisation charge for the year increased to £0.7m (2016: £0.4m), reflecting further development
of the Group's network and financial management systems and the acquisition of finite life intangible
assets as a part of the Entanet Group purchase.
Operating loss increased to £7.7m (2016: £5.1m), largely driven by increased administrative expenses of £27.8m
(2016: £18.7m), countered by the increase in gross profit of £20.1m (2016: £13.5m).
The adjusted EBITDA profit of £4.5m is in line with expectations and a significant improvement on the prior
period adjusted EBITDA profit of £2.5m. A reconciliation of operating profit to adjusted EBITDA appears below.
Loss after tax was £16.6m (2016: £12.6m), which includes financing costs of £8.7m (2016: £7.3m).
Entanet acquisition
On 1 August 2017 the Group completed the acquisition of Entanet. Under the terms of the sale and purchase
agreement, the consideration was £29.0m on a debt-free and cash-free basis with an adjustment for working
capital movements between the dates of offer and completion. Total consideration on completion was £31.7m,
of which £2.3m is expensed as compensation to employees in the 12-18 months post-completion. The
consideration, of £29.4m, comprised £19.0m cash and £10.4m of settled debt. Included in the £19.0m cash
consideration was £2.4m of deferred consideration payable in 12-24 months following completion.
The acquired assets have been recognised on the enlarged Group's balance sheet principally as Goodwill and
other Intangibles, with £2.6m attributable to property, plant and equipment (PPE).
Balance sheet
The increase in PPE, excluding those acquired from the Entanet Group purchase, totalled £25.6m, of which
£24.7m related to the construction of new network assets. These consisted primarily of the £15.3m construction
of key Gigabit City projects in Aberdeen, Edinburgh, Glasgow, Leeds, Peterborough and Southend. The
remaining £9.4m of network asset build was to support additional customer connections in existing towns and
cities, as well as enabling the assets for commercialisation.
Total amount spent on the acquisition of Entanet was £29.4m, of this, £10.4m settled loans due from the
Entanet Group to the previous owners. There were £1.4m of transaction costs, which have been expensed. Of
the consideration, £17.7m was classified as Goodwill and £6.1m other identifiable Intangibles, while £2.6m was
classified as PPE. Deferred consideration to management sellers remaining as employees is being expensed over
the period of deferral.
Intangible assets additions in the year totalled £24.7m (2016: £0.7m). This primarily reflects the acquisition
made for Entanet.
Cash flow
Operating cashflow for the period was a net outflow of £0.3m, compared to a net outflow of £2.4m in 2016. At
the year-end the cash balance was £37.0m (2016: £16.7m), with a further £120.0m held on short-term deposit
(2016: £nil); these increases are primarily as a result of the share issue. These assets are being managed in line
with the Group's treasury policy, with £137.5m on deposit at the year-end in a mix of notice and fixed-term
treasury accounts.
The Group's closing cash balance was £157.0m. This cash is being managed in line with the Group's treasury
policy, with £137.5m on deposit at the year-end in a mix of notice and fixed-term treasury accounts.
Acquisition of Entanet and £200m fundraising
On 5 July 2017, the Group announced a proposed £201.8m fundraising and the proposed acquisition of the
entire issued share capital of Entanet Holdings Limited ('Entanet') for a cash consideration of £29 million (the
'Acquisition') to be financed by a partial use of net proceeds.
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The acquisition received shareholder approval at the General Meeting on 27 July 2017, and the transaction
subsequently closed on 1 August 2017.
The fundraising provided significant cash resources for the acceleration of network deployments, in addition to
the acquisition of Entanet.
Debt refinancing process
On 14 December 2015, CityFibre Limited (as borrower) entered into the Facility Agreement with Proventus
Capital Partners III AB (as agent and security agent). The Lenders are funds managed by Proventus Capital
Management AB or Proventus Capital Partners III and affiliated funds.
As at 31 December the Group had drawn in total £65.3m from the existing facilities.
The Directors believe the Group is now at a stage in its development to achieve a lower cost of capital through
refinancing its existing debt facilities. The Company has appointed Rothschild as lead adviser in this process,
which is well-advanced. It is the intention of the Directors to complete this process in the second half of 2018.
Reconciliation of operating loss to adjusted EBITDA
Year to Year to
31 Dec 2017 31 Dec 2016
£'000 £'000
Operating loss per accounts (7,675) (5,141)
Add back:
Depreciation 5,230 3,572
Amortisation 659 358
EBITDA (1,786) (1,211)
Fees in connection with regulatory review 1,150 904

Share-based payments charge 1,502 908
Transaction-related fees 3,619 1,884
Adjusted EBITDA 4,485 2,485
Subsequent event
On 24 April 2018 the Board recommended a cash offer from a consortium made up of Antin Infrastructure
Partners and West Street Infrastructure Partners for CityFibre at 81p per share.
Terry Hart
Chief Financial Officer
24 April 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 31 December 2017
2017 2016
£'000 £'000
Revenue 34,768 15,363

Cost of sales (14,677) (1,827)
Gross profit 20,091 13,536
Total administrative expenses (27,766) (18,677)
OPERATING LOSS (7,675) (5,141)
Finance income 72 45
Finance cost (8,743) (7,341)
Share of post-tax losses of equity accounted Joint Venture (227) (147)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (16,573) (12,584)
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Income tax - -
LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE

INCOME (16,573) (12,584)
Loss per share 2017 2016
Basic and diluted loss per share £(0.04) £(0.05)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Company number 08772997

As at 31 December 2017
2017 2016
Assets £'000 £'000
Non-current assets
Property, plant and equipment 178,135 155,159
Intangible assets 25,276 1,211
Investment in Joint Venture 204 433
Total non-current assets 203,615 156,803
Current assets
Inventory 3,784 3,986
Trade and other receivables 20,082 8,070
Investment in short-term deposits 120,000 -
Cash and cash equivalents 36,961 16,722
Total current assets 180,827 28,778
Total assets 384,442 185,581
Equity
Share capital 6,383 2,713
Share premium 328,450 137,943
Share warrant reserve 85 85
Share-based payments reserve 3,642 2,100
Merger reserve 331 331
Retained earnings (51,201) (34,628)
Total equity 287,690 108,544
Liabilities
Non-current liabilities
Interest bearing loans and borrowings 61,541 55,280
Deferred revenue 12,580 11,091
Deferred tax 723 -
Deferred consideration - 450
Total non-current liabilities 74,844 66,821
Current liabilities
Deferred revenue 4,354 2,864
Trade and other payables 17,554 7,352
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Total current liabilities 21,908 10,216
Total liabilities 96,752 77,037
Total equity and liabilities 384,442 185,581
These financial statements were approved by the Board of Directors and authorised for issue on 24 April 2018.
They were signed on its behalf by:
W G Mesch
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Share-
based
Share Share Share payments Merger Retained
warrant
capital premium reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 1,113 63,243 85 1,081 331 (22,044) 43,809

2016
Comprehensive
income
Loss and total - - - - - (12,584) (12,584)
comprehensive
income for the year
Transactions with
owners
New ordinary shares 1,600 78,400 - - - - 80,000
issued
Cost of issuing new - (3,700) - - - - (3,700)
ordinary shares
Share-based - - - 1,019 - - 1,019
payments
Balance at 31 2,713 137,943 85 2,100 331 (34,628) 108,544
December 2016
Comprehensive
income
Loss and total - - - - - (16,573) (16,573)
comprehensive
income for the year
Transactions with
owners
New ordinary shares 3,670 198,169 - - - - 201,839
issued
Cost of issuing new - (7,662) - - - - (7,662)
ordinary shares
Share-based - - - 1,542 - - 1,542
payments
Balance at 31 6,383 328,450 85 3,642 331 (51,201) 287,690
December 2017
Page 11 of 16
CONSOLIDATED STATEMENT OF CASH FLOWS

2017 2016
£'000 £'000
Cash flows from operating activities
Loss before tax (16,573) (12,584)
Amortisation of intangibles 659 358
Share-based payments 1,502 908
Finance income (72) (45)
Finance costs 8,743 7,341
Depreciation 5,230 3,572
Right of use income 1 29
Decrease/(increase) in inventory 203 (3,797)
Increase in receivables (5,827) (3,023)
Increase in payables 5,642 4,145
Transaction costs - 582
Share of loss from associated company 227 147
(265) (2,367)
Tax paid - -
Net cash utilised in operating activities (265) (2,367)
Cash flows from investing activities

Interest received 72 73
Investment in short-term deposits (120,000) -
Acquisition of intangible assets (579) (517)
Acquisition of property, plant and equipment (21,597) (110,560)
Costs of acquiring property, plant and equipment - (1,077)
Acquisition of subsidiary (net of cash acquired) (15,333) -
Capitalised labour costs (3,382) (2,946)
Net cash in investing activities (160,819) (115,027)
Cash flows from financing activities

Proceeds from the issue of share capital 201,839 80,000
Costs of issuing share capital (7,662) (3,562)
Debt finance costs paid - (5,320)
Repayment of borrowings (10,421) -
Drawdown of borrowings 5,500 59,800
Interest paid (7,933) (6,533)
Net cash utilised from financing activities 181,323 124,385
Net increase in cash and cash equivalents 20,239 6,991

Cash and cash equivalents at beginning of period 16,722 9,731
Cash and cash equivalents at end of period 36,961 16,722
ACCOUNTING POLICIES
Page 12 of 16
The financial information for the years ended 31 December 2017 and 2016 presented in this preliminary
announcement does not constitute the Company's statutory accounts for those periods. The financial
information for those periods has, however, been derived from the Company's statutory accounts. The
Company's Annual Report and Accounts for the year ended 31 December 2016 has been audited and filed with
the Registrar of Companies. The Company's Annual Report and Accounts for the year ended 31 December
2017 has been audited and will be filed with the Registrar of Companies in due course. The Independent
Auditors' Report on the Company's Annual Report and Accounts for the years ended 31 December 2017 and
2016 was unqualified and did not draw attention to any matters by way of emphasis and did not contain
statements under s498(2) or (3) of the Companies Act 2006.
The principal accounting policies applied in the preparation of these consolidated financial statements are
summarised below. They have all been applied consistently throughout the year and preceding period.
CityFibre Infrastructure Holdings PLC (the "Company") is a company registered in England and Wales.
Basis of accounting
The financial statements have been prepared on a going concern basis and in accordance with International
Financial Reporting Standards ("IFRS") and their interpretations issued by the International Accounting
Standards Board ("IASB"), as adopted by the European Union. They have also been prepared with those parts
of the Companies Act 2006 applicable to companies reporting under IFRS.
Adoption of new and revised standards

New standards and amendments to existing standards that have been published and are mandatory for the first
time for the financial year beginning 1 January 2017 have been adopted but had no significant impact on the
Group and Company. New standards, amendments to standards and interpretations which have been issued
but are not yet effective (and in some cases had not been adopted by the EU) for the financial year beginning
1 January 2017 have not been early adopted in preparing these financial statements. The implications of these
new accounting standards on the Group have been evaluated, and the main standards which may be relevant to
the Group are set out below:
IFRS 9 "Financial Instruments" - (effective for 2018 reporting)

IFRS 9 is applicable retrospectively and includes revised requirements for the classification and measurement of
financial instruments, as well as recognition and de-recognition requirements for financial instruments. Key
changes to accounting requirements under IFRS 9 which may be relevant to the Group include the requirement
to apply a new impairment model based on expected loss in recognising impairment of financial assets including
current receivables and loans to related parties. This may result in the recognition of additional impairment
losses against the carrying values of these financial assets, at a point in time which is earlier than under the
current accounting policies.
The Group plans to adopt the new standard on the required effective date and will not restate comparative
information. During 2017, the Group has performed a detailed impact assessment of all three aspects of IFRS 9.
This assessment is based on currently available information and may be subject to changes arising from further
reasonable and supportable information being made available to the Group in 2018 when the Group will adopt
IFRS 9.
The Group does not expect a significant impact on its balance sheet or equity on applying the classification and
measurement requirements of IFRS 9. Furthermore, the Group does not expect a significant impact on the
revised impairment requirements of IFRS 9 given the low level of historical incurred losses and the nature of the
Group's customers.
The new standard also introduces expanded disclosure requirements. These are expected to change the nature
and extent of the Group's disclosures about its financial instruments particularly in the year of the adoption of the
new standard.
IFRS 15 "Revenue from Contracts with Customers" - (effective for 2018 reporting)
IFRS 15 establishes a five-step model to be applied to all contracts with customers and is based on the principle
that revenue is recognised when control of a good or service transfers to a customer. Under IFRS 15, revenue is
recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for
transferring goods or services to a customer. Furthermore, it provides new guidance on whether revenue should
be recognised at a point in time or over time. The standard also introduces new guidance on costs of fulfilling
and obtaining a contract, specifying the circumstances in which such costs should be capitalised. Costs that do
not meet the criteria must be expensed when incurred, or accounted for in line with any other standard that they
fall within the scope of.
The actions needed to implement IFRS 15 in the organisation have been finalised and the quantitative impacts
determined, except for the determination of the final IFRS 15 disclosures to be included in the Annual Report for
2018. These will be finalised in the coming year. This quantitative assessment is based on currently available
information and may be subject to changes arising from further reasonable and supportable information being
made available to the Group in 2018 as the Group adopts IFRS 15. The following main impacted areas were
identified:
(i) Installation services

Currently the Group recognises revenue from installation services, which is normally generated based upon a
percentage of construction performed. Under IFRS 15, installation revenues will not be considered a separate
performance obligation, and as such no installation service revenues will be recognised; these are considered
part of the main promise to provide network services and hence will be recognised over the period during which
such service is granted. Installation services are not considered a separate performance obligation due to the
more detailed guidance IFRS 15 provides on the nature of a distinct good or service.
Page 13 of 16
As a result, under IFRS 15 such revenues will be recognised in the statement of comprehensive income later
and over the longer network service period, as opposed to the shorter installation period. This change will only
materially impact the Build and management of transformational fibre optic infrastructure segment.
The overall impacts of these changes are outlined below under (ii).
(ii) Network services

Currently the Group recognises revenue from network services over time, from the time that the service
becomes available for use by the customer. In future periods, there will not be a material change from the
current accounting treatment. However, now that revenues previously allocated to installation services are now
considered part of the main promise to provide network services, the amount of revenue recognised over the
network service period will increase, as noted above.
The expected impacts of the changes outlined in (i) and (ii) are:
- An additional amount of £2,218,000 of deferred revenue will be recognised, and a reduction of
£3,835,000 in accrued revenue will be recognised; the combined effect will be reflected as a decrease in
retained earnings at the date of transition being 1 January 2017.
- Revenue for the year ended 31 December 2017 will decrease by the amount of £4,108,000.
- An additional amount of £692,000 of deferred revenue, and a reduction of £3,416,000 in accrued
revenue, will be recognised at 31 December 2017.
- The net impact in equity at 31 December 2017 will be a £10,162,000 reduction.
(iii) Finance costs on upfront payments from customers

Deferred revenue is currently recognised within liabilities when customers are invoiced by the group in advance
of services being provided. Under IFRS 15, there is a requirement to recognise a finance cost in connection with
payments received up front from customers ahead of services being provided.
The expected impacts of the change are:

- Finance cost for the year ended 31 December 2017 will increase by £181,000.
- Revenue for the year ended 31 December 2017 will increase by £181,000.
(iv) Accounting for certain costs incurred in fulfilling and obtaining a contract
Under IFRS 15, the incremental costs of obtaining a contract with a customer are recognised as an asset if the
entity expects to recover them.
In 2017, the Group expensed costs of £496,000 related to sales commissions paid to employees. These costs
qualify as incremental costs of obtaining a contract and are expected to be recovered. They will therefore be
eligible for capitalisation under IFRS 15 and recognised as a contract asset and amortised over the average
contract term.
The expected impacts of the change are:

- A contract asset will be recognised amounting to £976,000 and reflected as an increase in retained
earnings at the date of transition being 1 January 2017.
- Expenses for the year ended 31 December 2017 will decrease by £360,000 in respect of expensed
sales commissions in 2017.
- The net impact in equity at 31 December 2017 will be a £1,112,000 increase.
(v) Presentation
The presentation and disclosure requirements in IFRS 15 are more detailed than under current IFRS. The
presentation requirements represent a significant change from current practice and significantly increases the
volume of disclosures required in the Group's financial statements. Many of the disclosure requirements in IFRS
15 are new and the Group has assessed that the impact of some of them will be significant. In particular, the
Group expects that the notes to the financial statements will be expanded because of the disclosure of
significant judgements made; primarily, how the transaction price has been allocated to the performance
obligations, and where there is a significant financing component.
(vi) Transition
IFRS 15 must be applied for periods beginning on or after 1 January 2018 and it is fully endorsed by the EU. The
Group decided to adopt IFRS 15 in its consolidated financial statements for 2018 reporting, using the full
retrospective transition approach which means that the cumulative impact of the adoption will be recognised in
retained earnings as of 1 January 2017 and all comparatives presented will be restated. The standard will only
be applied to contracts that are not completed as of the 1 January 2017.
The Group intends to use the following practical expedients on transition:

- completed contracts that begin and end within the same annual reporting period will not be revised; and
- for all reporting periods presented before the 1 January 2017, the Group will not disclose the amount of
the transaction price allocated to the remaining performance obligations or identify when it expects to
recognise that amount as revenue.
IFRS 16 "Leases" - (effective for 2019 reporting)

IFRS 16 was issued in January 2016. It will result in almost all leases being recognised on the balance sheet, as
the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to
use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term
and low-value leases.
The accounting for lessors will not significantly change.
Page 14 of 16
The Group is still in the process of quantifying the implications of this standard. However, we expect the
following indicative impacts:
- There is expected to be an increase in total assets, as leased assets which are currently accounted for
off balance sheet (i.e. classified as operating leases under IAS 17) will be recognised on balance sheet.
- There is expected to be an increase in debt, as liabilities relating to existing operating leases are
recognised. This is still under review. The increase in total debt will have an impact on gearing ratios.
- Operating lease expenditure will be reclassified and split between depreciation and finance costs,
therefore EBITDA will increase. Future depreciation and finance costs for our historic leases are also
affected by our choice of transition method, which is still under review.
- Operating cash flow will increase under IFRS 16 as the element of cash paid attributable to the
repayment of principal will be included in financing cash flow. The net increase/decrease in cash and
cash equivalents will remain the same.
- There may be a corresponding effect on tax balances in relation to all of the above impacts.
Basis of consolidation
The consolidated financial statements incorporate the results of CityFibre Infrastructure Holdings PLC and all of
its subsidiary undertakings as at 31 December 2017. The results of subsidiary undertakings are included from
the date of acquisition.
CityFibre Infrastructure Holdings PLC was incorporated on 13 November 2013, and on 11 January 2014 it
acquired the issued share capital of CityFibre Holdings Limited by way of a share-for-share exchange. The latter
had five wholly owned subsidiaries: CityFibre Networks Limited, Fibrecity Holdings Limited, Gigler Limited,
CityFibre Metro Networks Limited and Fibrecity Bournemouth Limited. The consideration for the acquisition was
satisfied by the issue of 115,383 Ordinary Shares in CityFibre Infrastructure Holdings PLC to the shareholders of
CityFibre Holdings Limited.
The accounting treatment in relation to the addition of CityFibre Infrastructure Holdings plc as a new UK holding
Company of the Group falls outside the scope of the IFRS 3 'Business Combinations'. The share scheme
arrangement constituted a combination of entities under common control. The reconstructed Group was
consolidated using merger accounting principles as outlined in Financial Reporting Standard 6 ("FRS")
Acquisitions and Mergers (UK) and treated the reconstructed Group as if it had always been in existence. Any
difference between the nominal value of shares issued in the share exchange and the book value of the shares
obtained is recognised in a merger reserve.
The Company has taken advantage of merger relief available under Companies Act 2006 in respect of the share
for share exchange as the issuing company has secured more than 90% equity in the other entity.
On 1 August 2017 it acquired the issued share capital of Entanet Holdings Limited by way of a cash purchase.
Entanet Holdings Limited had one wholly owned subsidiary: Entanet International Limited. The consideration for
the acquisition was satisfied by the transfer of £19,019,000 from CityFibre Infrastructure Holdings PLC to the
shareholders of Entanet Holdings Limited and £10,421,000 in settlement of debt acquired.
Revenue
Revenue represents network lease sales and installation sales to external customers, sales of internet services
to residential customers, and recharge of work performed for the joint venture at invoiced amounts less value
added tax or local taxes on sales. Where revenue arising from installation and connection services is separable
from network lease services, these elements are recognised as if they were separate contracts.
Network service revenue is recognised evenly over the period to which the services are provided, and is
recognised from the date at which the network service becomes available for use by the customer.
Installation revenue is recognised on a percentage completion basis over the period of construction of the asset,
from post-contract signature mobilisation to customer handover. Installation revenues are a proportion of the
total contract value; management assess this and give appropriate consideration to a range of factors in
determining installation revenues on a contract by contract basis. Factors include contract length, technical
challenges in delivering the contract and assessment of any associated local economic issues. Management
apply a straight-line basis as this closely approximates revenue recognised on a stage of completion basis and
the effort required to deliver services to customers.
It is considered by management that the above revenue recognition policies are suitable for recognising revenue
arising from the Group's key market verticals.
Revenue attributable to infrastructure sales in the form of Indefeasible-Rights-of-Use ("IRUs") with

characteristics which qualify the transaction as an outright sale, or transfer of title agreements, are recognised at
the later of delivery or acceptance by the customer.
Accrued income is recognised when services are provided in advance of the customer being invoiced.
Deferred revenue is recognised when services are invoiced in advance of the period over which the services are
provided.
Revenue from internet services provided to residential customers is recognised on a monthly basis, commencing
when services are provided.
Revenue from work performed for the JV is recognised during the period to which the work relates.
All revenue streams are wholly attributable to the principal activity of the Group and arise solely within the United
Kingdom.
Page 15 of 16
Property, plant and equipment

Property, plant and equipment are stated at cost, net of depreciation and any provisions for impairment. Where
network assets are acquired as part of a contract including a provision of services, the asset is initially
recognised at fair value to include the value of these services. Depreciation is calculated so as to write off the
cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:
Leasehold property 5 years

Network assets - Duct 40 years
Network assets - Cabling 20 years
Plant and machinery 5 years
Fixtures and fittings 3 years
Motor vehicles 3 years
Useful economic lives and residual values are assessed annually. Any impairment in value is charged to the
statement of comprehensive income.
Intangible assets
Customer contracts, which have arisen through business combinations, are assessed by reviewing their net
present value of future cash flows. Customer contracts are amortised over their useful life not exceeding nine
years.
Software costs that are directly attributable to IT systems controlled by the Group are recognised as intangible
assets and the costs are amortised over their useful lives not exceeding five years.
Brand assets, which have arisen through business combinations, are assessed by reviewing their net present
value of future cash flows. Brands are amortised over their useful life not exceeding fifteen years.
Amortisation is included in general administrative costs in the statement of comprehensive income.
Goodwill, which has arisen through a business combination, is measured at cost less any accumulated
impairment losses.
Impairment of non-current assets

Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be
recoverable an asset is reviewed for impairment. An asset's carrying value is written down to its estimated
recoverable amount (being the higher of the fair value less costs to sell and value in use) if that is less than the
asset's carrying amount.
The carrying values of property, plant and equipment and intangible assets other than goodwill, within a cash
generating unit, are reviewed for impairment only when events indicate the carrying value may be impaired.
Impairment indicators include both internal and external factors. Examples of internal factors include analysing
performance against budgets and assessing absolute financial measures for indicators of impairment. Examples
of external considerations assessed for indications of impairment include wider economic factors.
Where impairment indicators are present, the recoverable amounts of assets are measured. Asset recoverability
requires assessment as to whether the carrying value of assets can be supported by the net present value of
future cash flows derived from such assets, using cash flow projections which have been discounted at an
appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to
be made in respect of uncertain matters. In particular, management has regard to assumptions in respect of
revenue mix and growth rates.
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first
in, first out basis. Inventory includes equipment necessary to install fibre optic networks and also include the cost
of specific network assets allocated for sale under IRU agreements, rather than for use in the group's network
service provision business.
Net realisable value is based on estimated selling price less additional costs to completion and disposal.
Finance costs
Finance costs are charged to the profit and loss account over the term of the debt so that the amount charged is
at a constant rate on the carrying amount. Finance costs include issue costs, which are initially recognised as a
reduction in the proceeds of the associated capital instrument.
Financial liabilities and equity

Financial liabilities, including trade payables and bank loans, are recognised when the Group becomes party to
the contractual arrangements of the instrument and are recorded at amortised cost using the effective interest
method. All related interest charges on loans are recognised as an expense in 'finance cost' in the statement of
comprehensive income.
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual
obligations, rather than the financial instrument's legal form.
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the
definition of a financial liability. The Group's ordinary shares are classified as equity instruments. Incremental
costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any
tax effects.
Financial assets
Page 16 of 16
Trade and other receivables are initially recorded at their fair value and subsequently carried at amortised cost,
less provision for impairment.
A provision for impairment of trade receivables is established when there is objective evidence that the Group
will not be able to collect all amounts due according to the original terms of the receivable. Bad debts are written
off when identified.
Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and cash in hand, and short-term highly liquid investments
with an original maturity of three months or less.
Short term deposits

Short-term deposits comprise investment amounts placed on deposit with major banks for either fixed terms or
maturity notice periods which exceed 3 months and are less than 12 months.
Key judgements and sources of estimation uncertainty

The preparation of the financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect application of policies and reported amounts in the financial statements.
The areas involving a higher degree of judgement or complexity, or where assumptions or estimates are
significant to the financial statements are detailed below.
Revenue recognition of installation revenues

Installation revenues are a proportion of the total contract value; management assess this and give appropriate
consideration to a range of factors in determining installation revenues on a contract by contract basis. Factors
include contract length, technical challenges in delivering the contract and assessment of any associated local
economic issues.
Classification of network assets as inventory

Certain network assets have been classified as inventory assets during the prior year. Management believes
this classification continues to be appropriate given that the Group intends to sell network capacity assets on a
regular basis where it is considered to be a strategically viable product.
Assessment of useful economic lives of property, plant and equipment

The Group depreciates the property, plant and equipment, using the straight-line method, over their estimated
useful lives. The estimated useful life reflects management's estimate of the period that the Group intends to
derive future economic benefits from the use of the Group's property, plant and equipment. Changes in the
expected level of usage and technological developments could affect the useful economic lives of these assets
which could then consequentially impact future depreciation charges. Details of the change in useful economic
life of duct assets in the prior reporting period and the carrying amounts of the Group's property, plant and
equipment at 31 December 2017 will be disclosed in the Company's statutory accounts.
Impairment of non-current assets

Where impairment indicators are present, the recoverable amounts of assets are measured. Asset recoverability
requires assessment as to whether the carrying value of assets can be supported by the net present value of
future cash flows derived from such assets, using cash flow projections which have been discounted at an
appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to
be made in respect of uncertain matters. In particular, management has regard to assumptions in respect of
revenue mix and growth rates.
This information is provided by RNS

The company news service from the London Stock Exchange
END
FR FKNDDNBKBAQB

CityFibre Infrastructure Holdings PLC Preliminary Statement of Annual Results Year Ended 31 December 2017

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CityFibre Infrastructure Holdings PLC Preliminary Statement of Annual Results Year Ended 31 December 2017

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Page 1 of 16

RNS Number : 8546L

For immediate release 24 April 2018

CITYFIBRE INFRASTRUCTURE HOLDINGS PLC

AUDITED FULL-YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017

significant non-recurring expenses.

Greg Mesch, Chief Executive of CityFibre, commented:

For further information, please contact:

CityFibre Infrastructure Holdings plc www.cityfibre.com

finnCap (Nomad and Joint Broker) www.finncap.com

Liberum (Joint Broker) www.liberum.com

Vigo Communications www.vigocomms.com

Vodafone FTTH partnership

Public Sector Momentum

Key operating metrics

Profit and loss

Organic revenue 19,320 15,363

Total Revenue 34,768 15,363

The movements in underlying administrative costs include:

Acquisition of Entanet and £200m fundraising

Debt refinancing process

Reconciliation of operating loss to adjusted EBITDA

Fees in connection with regulatory review 1,150 904

Adjusted EBITDA 4,485 2,485

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Year Ended 31 December 2017

Revenue 34,768 15,363

Total administrative expenses (27,766) (18,677)

OPERATING LOSS (7,675) (5,141)

LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (16,573) (12,584)

LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE

Loss per share 2017 2016

Basic and diluted loss per share £(0.04) £(0.05)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Company number 08772997

Total assets 384,442 185,581

Total current liabilities 21,908 10,216

Total liabilities 96,752 77,037

Total equity and liabilities 384,442 185,581

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Balance at 1 January 1,113 63,243 85 1,081 331 (22,044) 43,809

CONSOLIDATED STATEMENT OF CASH FLOWS

Cash flows from investing activities

Cash flows from financing activities

Net increase in cash and cash equivalents 20,239 6,991

Adoption of new and revised standards

IFRS 9 "Financial Instruments" - (effective for 2018 reporting)

(i) Installation services

(ii) Network services

(iii) Finance costs on upfront payments from customers

The expected impacts of the change are:

The expected impacts of the change are:

The Group intends to use the following practical expedients on transition:

IFRS 16 "Leases" - (effective for 2019 reporting)

The accounting for lessors will not significantly change.

Revenue attributable to infrastructure sales in the form of Indefeasible-Rights-of-Use ("IRUs") with

Property, plant and equipment

Leasehold property 5 years

Amortisation is included in general administrative costs in the statement of comprehensive income.

Impairment of non-current assets

Financial liabilities and equity

Cash and cash equivalents

Short term deposits