Cablenet Communication Systems plc - Updated Financial Analysis Summary

On 10 May 2021, Cablenet Communication Systems plc published an updated Financial Analysis Summary (“FAS”) providing an overview of the company’s financial results in 2020, a comparison of the 2020 actual results with the forecasts published in the previous FAS dated 21 July 2020, as well as the forecasts for 2021.

The following are the main highlights of the expected financial performance and financial position of Cablenet Communication Systems plc in 2021:

  • Revenues are anticipated to increase by 13% to €53.1 million on the back of further subscriber gains across all segments (both B2C and B2B) and deeper market penetration across existing and new areas.
  • Total operating costs are expected to increase almost 24% to €37.8 million (2020: €30.5 million) reflecting the impact of the additional investments especially in TV and Sports content as well as mobile services with a view of extending outreach, increase customer subscriptions and improve product offering.
  • In view of the sharper increase in operating costs, EBITDA is expected to decline by 7.1% to €15.3 million whilst the EBITDA margin is projected to contract to 28.8% compared to 35% in 2020.
  • The financial performance of Cablenet is also expected to be dented by higher depreciation and amortisation charges to €18.2 million (2020: €17.7 million) whilst net finance costs will remain relatively unchanged at €1.86 million.
  • Overall, Cablenet is forecasting to report a net loss of €4.49 million which will also lead to a contraction in the equity base to €8.13 million compared to €13.1 as at the end of 2020.
  • Cash balances are anticipated to drop significantly to €4.35 million (31 December 2020: €14.4 million) as Cablenet will utilise the remaining funds from the bond proceeds in line with its investment strategy. Coupled with the increase in total borrowings to €59 million (largely due to higher levels of football rights liabilities), the gearing ratio (calculated as total debt divided by total debt plus equity) is expected to increase to just under 88% (31 December 2020: 79.5%) whilst the net debt to EBITDA multiple is forecasted to deteriorate to 3.58 times compared to 2.23 times in 2020. Likewise, the interest cover is expected to drop to 8.22 times from 9.09 times in 2020.

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Cablenet Communication Systems plc – Financial Analysis Summary dated 10 May 2021.

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