Manx Telecom PLC – Final Results

Manx Telecom PLC – Final Results

Manx Telecom Plc (AIM:MANX), the leading Isle of Man-based communications solutions provider, announces its results for the year ended 31 December 2018, showing good progress with its strategy of strengthening its on-island telecoms business, while investing for growth in the international business Vannin Ventures.

Financial Highlights

  • Revenues of £81.5m (2017: £78.5m)
    –  Fixed Line, Broadband and Data revenues stable at £30.8m (2017: £31.5m).
    –  Mobile revenues increased 11.9% year on year.
    –  Continued growth in Global Solutions with revenue increasing 5.4% year on year.
    –  Data Centre revenues consistent at £4.7m (2017: £4.7m).
    –  Other revenues increased by 7.4% to £6.3m (2017: £5.9m), driven primarily by non-mobile kit sales.
  • Underlying EBITDA increased slightly to £27.2m (2017: £27.1m). Reported EBITDA, including the final costs related to the Transformation Programme and investment in Goshawk Communications (“Goshawk”), increased to £23.3m (2017: £23.1m).
  • Underlying Profit Before Tax reduced slightly to £14.8m (2017: £15.1m) due to increased interest payments, with reported Profit Before Tax of £11.6m (2017: £11.9m).
  • Strong underlying Free Cash Flow (FCF) at £18.0m (2017: £20.0m) with 2017 being exceptionally high having the benefit of cash from the completion of a very popular share save scheme. Reported FCF up 5.1% at £9.5m (2017: £9.1m) due to improvements in working capital.
  • An increase in net debt to £63.0m at the year end (2017: £56.9m) was driven by cash investment in our Transformation Programme and growth initiatives across the business, including Goshawk, resulting in a net debt/underlying EBITDA ratio of 2.3x (2017: 2.1x).
  • Final dividend of 7.9p (2017: 7.5p) making 12.0p for the full year (2017: 11.4p).

Operational Highlights

  • In the Group’s domestic business, the roll-out of Fibre to the Premise (“FTTP”) has continued, with over 10% of the Island’s premises passed by year end. There has been a 13.5% take up of the service to date.
  • Successful year for Vannin Ventures, our international growth business, including the launch on the Isle of Man of Goshawk Communications’ innovative proposition, “MT clearSound”, a new personal mobile phone service which dramatically improves the clarity of mobile phone calls for those with hearing loss. Goshawk recently announced the brand name for the mobile phone proposition it will launch in the UK market in the summer of 2019 as “Audacious”.

Gary Lamb, Chief Executive Officer, said:

“2018 was another year of robust performance for Manx Telecom. Thanks to the hard work of our people, our on-island telecoms business has remained stable – with a solid performance in Fixed Line, Broadband and Data Services, and growth in Mobile – while our international growth business, Vannin Ventures, has seen growth in Global Solutions and has put down strong foundations for the future. Goshawk Communications has made good progress, not least with our recently branded UK proposition “Audacious”.

We remain positive in the outlook for the Group due to the solid underlying revenue, EBITDA and cash flow performance during the year, and are continuing to explore potential growth opportunities with the aim of identifying new products and services for a global audience.”

Underlying results2

Reported results

2018

2017

Change

2018

2017

Change

£m

£m

£m

£m

Revenue1

81.5

78.5

3.8%

81.5

78.5

3.8%

EBITDA3

27.2

27.1

0.4%

23.3

23.1

0.9%

Margin

33.4%

34.5%

28.6%

29.4%

Operating Profit

17.5

17.4

0.6%

13.7

13.4

2.2%

Margin

21.5%

22.1%

16.8%

17.1%

Operating Cash Flow

24.5

26.5

(7.5%)

20.5

20.0

2.1%

Capital Expenditure (excl. intangibles)

8.9

8.5

10.0

8.9

Free Cash Flow3

18.0

20.0

(10.0%)

9.5

9.1

5.1%

Profit before and after tax

14.8

15.1

(2.0%)

11.6

11.9

(2.5%)

Basic earnings per share

12.88p

13.28p

(3.0%)

10.45p

10.50p

0.5%

Diluted earnings per share

12.82p

13.15p

(2.5%)

10.40p

10.40p

0.0%

Final dividend per share

7.90p

7.50p

5.3%

7.90p

7.50p

5.3%

Total dividend per share

12.00p

11.40p

5.3%

12.00p

11.40p

5.3%

1 Results for the year ended 31 December 2018 are on an IFRS 15 basis unless indicated. Results for the year ended 31 December 2017 are on an IAS 18 basis. The implementation of IFRS 15 accounts for £1.3m in revenue. EBITDA effect for the full year 2018 has remained at H1 levels of £0.5m.

2 Underlying results are alternative performance measures which are relevant to an understanding of the Group’s financial performance which are not defined in IFRS and are therefore termed ‘non-GAAP’ measures. Underlying results are adjusted for specific items, a full list of which is provided in note 5. See note 5 for further details, including definitions of terms and for reconciliations to the most comparable GAAP measure.

3 EBITDA and Free Cash Flow are non-GAAP measures and are defined in note 5.

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