Arqiva revenues down 11.2%
September 22, 2020
By Chris Forrester
Broadcast facilities company Arqiva, reporting its end-of-year numbers (to June 30th), says its revenues were down 11.2 per cent although much in line with expectations.
The company has sold its Telecoms business to Cellnex (for £2 billion) which “will sharpen [our] focus on broadcast and utilities sectors,” says Arqiva.
The decline in group revenues (to £879.9 million) is largely down to the expected ending of one off contractual fees and the end of legacy contracts, the managed exit of the Occasional Use satellite distribution, and reductions on the 700MHz Clearance programme as the programme neared completion. Revenue from continuing operations declined 10.0 percent year-on-year to £677.5 million, stated Arqiva.
Paul Donovan, CEO of Arqiva, commented: “Having delivered solid financial performance in 2020, Arqiva is now entering a period of evolution. Our focus is now squarely on maintaining our position as the number one provider of broadcast infrastructure in the UK and establishing ourselves a leading player in the utilities market. With a newly refocused organisation supported by a stronger financial position, I feel we are well-positioned to capitalise on the opportunities ahead of us.”
In October 2019, Arqiva announced the agreement for the sale of its Telecoms business to Cellnex for c. £2.0 billion. The transaction included divestment of about 7,400 of Arqiva’s cellular sites, including masts and towers as well as urban rooftop sites, and the right to market a further c.900 of Arqiva’s retained sites across the UK. Relevant staff within the Telecoms business also transferred to the Cellnex business as part of the transaction.
Arqiva says DTT remains the primary platform medium within the broadcast market, currently reaching 98.5 per cent of the UK’s population. Arqiva’s main (DVB-T) multiplexes remain highly utilised with 90 per cent of capacity sold as at June 30th.
“The uptake of TV viewing on the DTT/Freeview platform was also particularly strong during the lockdown period as more people stayed at home and utilised our services to stay informed, minimise social isolation and increase entertainment. The wide reach of the DTT platform has been of vital national importance for delivering news and other information to the whole nation and for supporting society during the current pandemic,” Arqiva said in a statement.
“Like many sectors, commercial radio in the UK was impacted by Covid-19 with a reduction in revenue as many businesses cut advertising budgets. Discussions between Arqiva, the government and the radio industry resulted in a reduction of fees for independent commercial radio customers across both DAB and analogue. Despite the loss of advertising revenue, informal indications are that the volume of hours of radio listening increased during the lockdown as more people tuned in to radio for news and entertainment. With the easing of lockdown restrictions, we expect radio advertising to increase again as companies strive to regain market share and rebuild their businesses. The latest figures from industry data provider RAJAR show that 58.6 percent of [UK] listening is now to digital radio platforms (Q1 2020) with DAB representing more than two thirds of digital consumption. This has helped keep the first national commercial DAB multiplex, Digital One (wholly owned by Arqiva) at 100 percent occupancy,” added the statement.