REG - Cordiant Digital Inf - Third Quarter Trading Update
24/03/2025 07:00
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RNS Number : 7631B Cordiant Digital Infrastructure Ltd 24 March 2025
LEI: 213800T8RBBWZQ7FTF84
24 March 2025
CORDIANT DIGITAL INFRASTRUCTURE LIMITED
THIRD QUARTER TRADING UPDATE
Cordiant Digital Infrastructure Limited (the "Company"), the operationally
focused, specialist digital infrastructure investor, managed by Cordiant
Capital Inc ("Cordiant", or the "Investment Manager"), is pleased to provide
a third quarter ("Q3") update for the financial year ending 31 March 2025 1
on the operating performance of platform companies in the portfolio, balance
sheet, dividend coverage and market outlook.
The Company continues to implement its "Buy, Build & Grow" model of
increasing the cash flow-generating asset bases of its diversified platform
companies to drive the value of these businesses. The Company invests in "Core
Plus" digital infrastructure assets and seeks to construct a balanced,
diversified portfolio. The Company's NAV total return target of 9% per annum
comprises capital growth and a progressive dividend fully supported by free
cash flows generated by its portfolio.
Highlights
· Aggregate portfolio company EBITDA for the nine months to 31
December 2024 2 increased by 13.6% to £115.6 million on the prior comparable
period on a constant currency, pro forma basis 3 , driven by contributions
from contract wins, recent bolt-on acquisitions, cost control and the
beneficial effects of contractual and other price escalators on revenue.
· Aggregate portfolio company revenue increased 9.6% to £241.9
million during the nine months to 31 December 2024 on the prior comparable
period on a constant currency, pro forma basis(2).
· The dividend target for the financial year to 31 March 2025 of
4.2p, confirmed at the time of the Company's interim results in November 2024,
is 4.8x covered by EBITDA and 1.8x covered by free cash flow after
Company-level costs, net finance costs, taxation and maintenance capital
expenditure (collectively "Adjusted Funds from Operations" or "AFFO") 4 .
· Significant progress has been made on key portfolio initiatives
since the interim results released in November 2024:
o The Company completed the acquisition of a 47.5% economic (50% voting)
interest in DCU Invest NV and the linked acquisition by DCU Invest NV of
Datacenter United Brussels NV, the former owner of the data centre business of
Proximus Group. The transactions create a leading data centre platform in
Belgium ("DCU") with circa 13MW of capacity and substantial expansion
opportunities. This was acquired at an attractive EV/EBITDA multiple of 13.3x.
o Speed Fibre entered into an agreement to acquire BT Communications Ireland
Limited ("BTCIL"), the wholesale and enterprise business unit of BT Ireland,
for an enterprise value of €22 million, less than half of continuing
revenue. The transaction represents a significant step in the Company's
strategy to build scale in key digital markets such as Ireland. BTCIL's
capabilities complement Speed Fibre's existing operations and are expected to
enhance Speed Fibre's ability to support the growing connectivity needs of
Irish businesses and Ireland's most important data centre complex.
o Emitel completed a further bolt-on acquisition in the towers sector
involving the operator of 48 sites in Poland, which provides mobile network
operator ("MNO") hosting services and analogue and digital radio emissions.
This acquisition has the potential to be highly accretive with significant
operating cost synergies.
o CRA has continued to grow its highly successful data centre and cloud
business, signing the first customer for the newly opened edge data centre in
Cukrák, outside Prague, in the form of the world's largest independent gaming
cloud provider. Expansion of a data centre at one of CRA's broadcast towers in
the Prague Žižkov district has started and is expected to increase data
centre capacity by 1.3MW. Positive progress has also been made on the
development of CRA's flagship 26MW data centre project DC Zbraslav, with the
receipt from the relevant authorities of the formal zoning permit in December
2024 and the sewage building permit in March 2025. Initial discussions are
being held with potential anchor tenants for the facility.
o CRA has begun monetising a land bank which it has recently identified,
including sites of former broadcast infrastructure facilities which have
potential alternative use value, providing an additional meaningful source of
cash generation for the business to fund new growth projects.
o Both CRA and Emitel have signed significant contract extensions for FM
radio with the public national broadcasters of the Czech Republic and Poland
respectively and, following the award of national digital audio broadcasting
("DAB+") licenses, continue to expand and commercialise DAB+ networks under
valuable long-term contracts.
· As a result of the DCU and BT Ireland 5 acquisitions, the
portfolio revenue mix has diversified further such that the largest segment
(now backbone fibre) accounts for 37% of total pro forma revenue 6 . The
portfolio's largest country exposure, Poland, accounts for 33% of total pro
forma revenue.
· The Company and its portfolio companies collectively have no
material debt maturities before June 2029, meaning that there is no short- or
medium-term refinancing risk in the portfolio.
· As at 31 December 2024, the Company had total available liquidity
of £211.7 million, pro forma for the DCU and BTCIL acquisitions. This
comprised total available cash at Company and portfolio company level of
£78.3 million, and total undrawn facilities of £133.5 million.
· Gross drawn debt, on a full look-through basis, was £655.1
million, resulting in aggregate net debt of £576.8 million. The Company's
leverage is 4.0x on an aggregated net debt divided by LTM 31 December 2024
EBITDA basis, including Company-level costs, and 37.8% on a net debt divided
by gross asset value ("GAV") basis 7 . By way of comparison, many companies
operating in the digital infrastructure sector have leverage ratios in the
6-7x range.
· Steven Marshall, Executive Chairman and Co-Head of Cordiant
Digital Infrastructure Management, made further purchases of shares, taking
his aggregate direct holding to 11.7 million shares as at the date of this
trading update. The Directors, Steven Marshall, the Investment Manager and
employees of the Investment Manager now in total own 2.0% of the Company's
ordinary shares as at the date of this trading update, compared to 1.8% as
reported in the interim results in November 2024.
· Since IPO, the Investment Manager's fee continues to be based on
market capitalisation (as opposed to NAV), ensuring even closer alignment
between the Investment Manager and the Company.
Shonaid Jemmett-Page, Chairman of Cordiant Digital Infrastructure Limited,
said:
"The Board continues to be encouraged by the Company's progress in the four
years since its IPO. Operational performance across the portfolio is strong
and we continue to see the results of the Investment Manager's hands-on
expertise coming through in revenue and EBITDA growth. We remain disappointed
with the share price performance, as we believe the discount to NAV at which
the Company trades is not warranted by the Company's performance. We remain
confident that the Company's progress and achievements will be better
reflected as current market conditions improve."
Steven Marshall and Benn Mikula, Co-Heads of Cordiant Digital Infrastructure
Management, said:
"The diversified portfolio of assets we have assembled at a comparatively low
entry multiple to EBITDA continues to perform well operationally. Under our
management, the portfolio has grown revenues and EBITDA from the existing
asset base, and we have judiciously deployed cash into bolt-on acquisitions
and growth capital expenditure which are highly accretive. We continue to
execute our Buy, Build & Grow model to deliver a larger, more diversified
digital infrastructure platform, capital growth and a progressive dividend
over time."
Capital Markets Day
The Company will be hosting a Capital Markets Day for institutional investors
and analysts on Tuesday 25 March 2025. The event will take place between
12:30pm and 6:30pm at the offices of Deutsche Numis, 45 Gresham Street,
London, EC2V 7BF. To register your interest in attending, please contact Ali
AlQahtani at Celicourt via CDI@celicourt.uk (mailto:CDI@celicourt.uk) .
Capital Allocation
The Board and Investment Manager continue to consider the differing viewpoints
of shareholders on capital allocation and have maintained a multi-pronged
approach to allocating the Company's available capital. In addition to
pursuing a progressive dividend policy, due to the limited dry powder
currently available to it, the Company has been prioritising its resources and
those of its portfolio companies on bolt-on acquisitions and growth capital
expenditure with above-target IRRs.
Emitel recently completed two bolt-on acquisitions in Poland and the Company
recently announced the acquisition of BT Ireland by Speed Fibre. The Board and
Investment Manager believe that these acquisitions - supporting strong
European communications tower and fibre platforms - will deliver strong
returns and valuable synergies with the existing businesses.
The Board and the Investment Manager were pleased to complete the linked
acquisitions of the DCU data centre businesses in Belgium, which the Company
was able to do by working in partnership with TINC, a Belgium-based
infrastructure investor, to create a leading data centre platform in a core EU
country.
Finally, the Company continues to progress a range of opportunities in growth
capital expenditure within the portfolio which have the potential to deliver
highly accretive returns. Notable examples include: the development of new
data centres in the Czech Republic, including a 26MW facility on the outskirts
of Prague; new mobile towers under a build-to-suit (BTS) programme with MNOs
in Poland; and the expansion of DAB+ radio networks in the Czech Republic and
Poland.
Dividend Cover
The Company's dividend policy continues to be based on the underlying
principle that the dividend must be covered by free cash flow generated by the
portfolio and be sustainable in future periods. The Company also remains
committed to a progressive dividend policy.
As at 31 December 2024, the target dividend of 4.2p continues to be 1.8x
covered by AFFO and 4.8x by aggregate portfolio company EBITDA. The free cash
flow generated by the portfolio amply covers the 4.2p dividend. The table
below shows aggregate financial information for the portfolio and the Company
for the 12 months to 31 December 2024:
12 months to
31 December 2024*
(unaudited) £m
Revenues 321.8
Portfolio company aggregate EBITDA 153.3
Dividend covered by EBITDA 4.8x
Company-specific costs (9.6)
Net finance costs (41.8)
Net taxation, other (26.4)
Free cash flow before all capital expenditure** 75.4
Maintenance capital expenditure (18.5)
Adjusted Funds From Operations*** 56.9
Dividend at 4.2 pence per share (32.2)
Dividend cover 1.8x
* At average foreign exchange rates for the period and on a pro forma basis,
assuming portfolio companies were owned for the whole 12-month period
** Aggregate growth capital expenditure of £30.8 million was invested during
the 12 month period across the portfolio
*** Adjusted Funds from Operations comprises EBITDA less Company-specific
costs, aggregate net finance costs, taxation payments and maintenance capital
expenditure
An increase in net finance costs since September 2024, reflecting the higher
average all-in interest rates of the Company-level and CRA facilities since
those were refinanced, and higher tax and other cash flows, has been offset by
increased EBITDA generated by the portfolio and a slight reduction in
Company-specific costs.
Portfolio Financial Update
The Company's portfolio as at 31 December 2024 consisted of two diversified
digital infrastructure platforms, CRA in the Czech Republic and Emitel in
Poland; a fibre business, Speed Fibre in Ireland; a standalone data centre,
Hudson Interxchange in the USA; and, a discrete tower colocation business,
Belgian Tower Company (formerly Norkring België) in Belgium.
These assets together generated aggregate revenues of £241.9 million in the
nine months to 31 December 2024, an increase of 9.6% on the prior comparable
period, on a pro forma, constant currency basis. The EBITDA of the portfolio
was £115.6 million for the same period, an increase of 13.6% on a pro forma,
constant currency basis. The increase in EBITDA was driven by strong
performance at CRA, Emitel and Speed Fibre.
As a result of the DCU and BT Ireland 8 acquisitions, the portfolio revenue
mix has diversified further, such that the largest segment (now backbone
fibre) accounts for 37% of total pro forma revenue 9 . TV broadcast revenue,
formerly the largest revenue generating sub-sector in the portfolio, accounts
for 28% of total pro forma revenue. The portfolio's largest country exposure,
Poland, accounts for 33% of total pro forma revenue. Poland's economy has been
a standout performer in Europe driven by strong household consumption which is
expected to continue into 2025. The tables below present the revenue breakdown
of the portfolio on a sub-sector and geographic basis, pro forma for the DCU
and BT Ireland acquisitions.
Revenue by sub-sector %
Backbone fibre-optic networks 37%
Digital broadcast infrastructure - TV 28%
Data centres and cloud 14%
Mobile towers 11%
Digital broadcast infrastructure - Radio 10%
Internet of Things/Smart City 0%
Total 100%
Revenue by country %
Poland 33%
Ireland 32%
Czech Republic 25%
Belgium 6%
USA 5%
Total 100%
The Company had total liquidity equivalent to £211.7 million at 31 December
2024, pro forma for the DCU and BT Ireland acquisitions announced on 25
October 2024 and 5 February 2025 respectively. Total liquidity comprised £6.5
million of cash held at the Company level, £71.8 million held at the
portfolio company level and £133.5 million in undrawn credit facilities.
In aggregate, the Company and its portfolio companies had gross drawn debt
equivalent to £655.1 million at 31 December 2024, and therefore net debt of
£576.8 million. This resulted in gearing as at 31 December 2024 of 4.0x
measured as net debt divided by LTM EBITDA (including Company-level costs) or
37.8% measured as net debt divided by GAV 10 .
76% of total drawn debt is on a fixed interest basis, with the remainder at
floating interest; none is inflation-linked. The weighted average margin on
outstanding debt is 2.86%.
The Company and its portfolio companies have no material debt maturities until
June 2029. DCU, which entered the portfolio after 31 December 2024, has
approximately €10.5 million (£8.7 million) of bank debt outstanding,
maturing in three separate tranches between March 2028 and December 2031.
Update on Portfolio Companies
Emitel
Emitel is the largest operator of digital terrestrial television ("DTT") in
Poland as well as IPTV platforms, the leading provider of radio broadcast
services and a leading provider of network neutral mobile towers. The company
has a 31 December financial year end and for the nine months to 30 September
2024, revenue increased 10.1% to PLN486.3 million (£96.2 million) over the
prior comparable period and EBITDA increased 16.3% to PLN332.0 million (£65.7
million) over the prior comparable period.
This strong performance was primarily due to higher TV broadcasting revenue
from new contracts signed earlier in the year for MUX 8. There was good growth
in radio broadcasting revenue through the annualisation effect of new business
secured in 2023 and the launch of new emissions mainly relating to the
expansion of DAB+ coverage. The performance in TV and radio broadcasting also
reflected the effect of inflation in Poland during 2023 feeding through into
index-linked revenues from January 2024 onwards.
Emitel continued to show growth in telecom infrastructure revenues from mobile
towers, with an increase of 12.1% year-on-year, due to higher rental revenues
following development of the build-to-suit programme with MNOs, as well as the
acquisitions in 2023 of American Tower Corporation's Polish portfolio, ATC
Polska, and the mobile towers of RTTS in June 2024. As of 31 December 2024,
Emitel operated 762 sites and continues to explore multiple opportunities,
both organic and inorganic, to expand its mobile tower portfolio.
Overall, costs were largely flat for the three quarters compared to the prior
comparable period, showing disciplined cost control during a period of high
inflation. This focus on costs is illustrated by Emitel's management of the
company's energy costs, which had been hedged at low price levels for the
year.
The cash balance at 31 December 2024 was PLN229 million (£44 million), and
third-party bank debt was PLN1,357 million (£263 million) at the same date.
Emitel has executed interest rate swaps fixing 76.4% of the total interest on
the drawn facilities to date.
In November 2024, Emitel acquired PSN Infrastruktura, subsequently renamed to
EM Cast, from TDF, the French operator of broadcast and telecommunications
infrastructure. EM Cast operates 48 sites, including 11 owned tower sites,
providing analogue and digital radio emissions and MNO hosting services.
Emitel and the Investment Manager believe that this acquisition has the
potential to be highly accretive with significant operating cost synergies.
The deal was funded using Emitel's own cash resources.
In March 2025, Emitel and EM Cast were pleased to renew existing contractual
arrangements with Polskie Radio covering 157 emissions with a monthly fee
increase of more than 7%, acquiring one additional emission from a competitor
in the process. The new contract is for a term of 40 months and commences at
the end of May 2025, and exceeds PLN100 million (£19.4 million) in value
before the application of indexation.
CRA
CRA is a diversified digital infrastructure company, operating mobile towers,
a broadcast network, data centres, a fibre network and Internet of Things
networks serving utilities. The company has had a strong financial year so
far, with revenues for the nine month period to 31 December 2024 increasing to
CZK2,142.8 million (£72.0 million), up 18.0% on the prior comparable period,
and EBITDA increasing to CZK1,050.0 million (£35.3 million), up 14.9% over
the same period.
This strong growth was primarily driven by the acquisitions of Cloud4com and
DC Lužice in January 2024 and organic growth. These acquisitions have
exceeded expectations in the period of ownership to date. Excluding the
effects of these acquisitions, revenue grew 8.7% and EBITDA grew 4.9% over the
same period. CRA expects to pay the agreed earnout of CZK485 million (£15.9
million), relating to the acquisitions in the first half of the next financial
year.
The increase in revenue and EBITDA also reflected a strong performance across
all CRA's business lines. In broadcast, growth was primarily driven by higher
inflation indexation feeding through compared to last year and some additional
new customer TV channels. Organic data centre and cloud earnings also continue
to grow strongly. Effective cost control, particularly personnel and energy
costs, contributed favourably to EBITDA performance.
CRA's cash balance was CZK346 million (£11.4 million) as at 31 December 2024,
and third-party bank debt outstanding was CZK3.9 billion (£128.1 million).
CRA has CZK1.1 billion (£36.1 million) of undrawn revolving credit facilities
available to finance new investments. New interest rate hedging for the full
tenor of CRA's term debt has been implemented, fixing 50% of the loan's
interest at an average all-in rate of circa 5.6% until August 2030.
In March 2025, CRA was particularly pleased to have extended its contract with
the public broadcaster, Czech Radio, to 31 October 2033. This contract covers
four nationwide FM radio stations. CRA is also progressing well with its
construction of DAB+ radio networks in the Czech Republic. It recently signed
and launched six radio stations of the Radio United media group and is in the
process of securing further contracts with other customers.
CRA also saw continued demand for its existing data centre capacity, as
measured in racks occupied (+17%) and power utilised (+24%), at 31 December
2024 compared to a year earlier. This reflected the acquisition of DC Lužice
and the completion of DC Cukrák, together with robust demand dynamics from
new and existing customers seeking capacity at the existing edge facilities.
CRA's newest edge data centre at Cukrák, outside Prague, has just signed its
first tenant being the world's largest independent gaming cloud provider,
Boosteroid, supporting the gaming service's expansion in the Czech Republic.
Due to demand for additional data centre capacity in the country, expansion of
DC10 at one of CRA's broadcast towers in the Prague Žižkov district, has
started. It is expected that it will open before the end of 2025 and increase
CRA's data centre capacity by 1.3MW at a cost of CZK200 million (£7 million).
Development of the 26MW flagship data centre at Zbraslav continues following
receipt from the relevant authorities of the formal zoning permit in December
2024 and the sewage building permit in March 2025. Preparatory ground works
are expected to begin shortly and CRA is currently undertaking a procurement
process to select a general contractor for the main construction phase. In
parallel, initial discussions are being held with potential anchor tenants for
the facility. Prior to receiving the zoning permit, CRA received and
subsequently rejected an unsolicited non-binding expression of interest from a
European data centre operator to acquire the entire development. In line with
its prudent approach to valuation, other than the development costs of the
project, the Company has not yet included in its valuation the potential
positive effect that this new data centre could bring to CRA.
In the current financial year, CRA has so far received to date circa CZK32
million (£1.1 million) in proceeds relating to the sale of redundant land,
which have contributed positively to free cash flow. In collaboration with a
prominent real estate advisor, CRA has identified further plots of land in its
portfolio no longer required for the business which could have considerable
alternative use value and could yield cash proceeds to the business in the
future if sold, many multiples of the amount already received. CRA's land bank
includes sites of old broadcast infrastructure that could be repurposed for
residential, industrial and/or commercial uses.
CRA continues to respond to a complex long-running dispute relating to the
valuation of a family's purported former shareholding in a predecessor entity
to CRA arising out of a statutory minority squeeze-out process in 2005. In
February 2025, a first instance ruling against CRA was delivered by the Prague
Municipal Court. CRA has since appealed multiple aspects of the judgment,
which suspends its effect until the appeal is decided. The judgment
established a revised valuation for the shares and thus that CRA should pay an
additional amount for the plaintiff's transferred shares, together with
interest and costs (to be determined). CRA's and the Company's view, supported
by external counsel, continues to be that the judgment is flawed, and that CRA
has strong arguments in relation to the valuation as well as significant
substantive and procedural matters. Further updates will be made when there
are material developments in the dispute.
Speed Fibre
Speed Fibre is a leading open access backbone fibre network provider in
Ireland. Speed Fibre's business comprises two principal units: Enet, a
provider of backbone fibre in Ireland, which generates approximately two
thirds of revenues, and Magnet Plus, operator of Ireland's largest
connectivity network, providing connection and service to approximately 10,000
business and retail customers in Ireland, which generates the remaining third
of revenues.
Speed Fibre's revenues for the nine month period 11 increased 3.7% to €65.1
million (£55.5 million), and EBITDA increased 4.8% to €18.4 million (£15.6
million) over the same period last year. The increase in EBITDA was driven by
higher recurring revenues from fibre and wireless sales and effective cost
control during the period.
Speed Fibre had a cash balance of €13.3 million (£11.0 million) at 31
December 2024 and gross debt of €119.2 million (£98.7 million) at the same
date. The gross debt is made up of a term loan of €100.0 million (£82.8
million) and a drawn RCF of €19.2 million (£15.9 million), both due for
repayment in 2029. The interest on the term loan is 85% fixed and the RCF
interest is floating rate.
In November 2024, Enet was pleased to agree a 20-year IRU (indefeasible right
of use) worth €4.5 million (£3.7 million) which will be used by a large
international enterprise business. This covers the build of new, and the lease
of existing, duct infrastructure totalling 15.4km in Dublin. The new build
element of the contract delivers a new Enet route with opportunities for
incremental revenue and cost savings relating to connectivity to businesses
and mobile towers along the route. The new contract also cements a major
partnership involving this global business and opens the door for future
opportunities involving a global business.
In February 2025, Speed Fibre entered into an agreement to acquire BT
Communications Ireland Limited ("BTCIL"), the wholesale and enterprise
business unit of BT Ireland, for an enterprise value of €22 million. BTCIL
provides wholesale fibre and B2B connectivity to circa 600 customers in the
telecoms, enterprise and government sectors across Ireland across a circa
3,400 km network of managed fibre.
The acquisition is expected to enhance Speed Fibre's ability to deliver
advanced connectivity solutions through the integration of BTCIL's
complementary capabilities and domestic customer base. By combining resources,
Speed Fibre expects to achieve greater operational efficiencies and deliver a
broader range of connectivity products and services for customers across
Ireland.
BTCIL generated core adjusted revenues of €57.6 million in the 12 months
ending 30 September 2024. Pro forma core adjusted 12 revenues for the
combined Speed Fibre and BTCIL group would have been €144.8 million in the
same 12-month period.
The regulatory approval process for the transaction has commenced and the deal
is expected to close later in 2025. The acquisition is expected to be financed
by a combination of Speed Fibre's existing cash resources, its senior
revolving credit facility and cash from the Company.
Hudson Interxchange
Hudson Interxchange is a data centre business located in 60 Hudson Street, New
York, one of the most interconnected buildings in the world, and home to c.300
telecommunications carriers. Revenues for the nine months to 31 December 2024
increased by 2.1% to $17.2 million (£13.4 million), with sales continuing to
grow. As a result, there is now limited ready for sale space and power
available for new customers. Work on expanding the data centre through up to
two new data halls for up to 2MW in capacity is progressing. Completion of the
project, if approved by the Company, is expected to take place towards the end
of 2025. Management is in early discussions with potential new customers to
take capacity in the new data halls.
Costs and cash flow are a particular focus for management, which has reduced
the EBITDA loss to $(3.2) million (£(2.5) million) for the nine months
period, a 10.6% improvement on the prior comparable period. This reduction in
EBITDA loss has been supported by a combination of more efficient supply chain
management and cost control. Hudson has $4.2 million (£3.4 million) of cash
and remains debt-free.
During this period, the business received new orders from existing customers
which are expanding their footprint in the data centre. Management continues
to explore options to take the business forward, including M&A,
technological improvements, and engaging with various stakeholders to increase
the value of the asset.
Belgian Tower Company (formerly Norkring België)
Norkring België, acquired in January 2024, has been renamed to Belgian Tower
Company ("BTCY") to better reflect the nature of its business. As of 31
December 2024, BTCY operated 25 communication and broadcast towers in Belgium
and has been conducting 5G broadcast trials as part of a consortium, which is
expected to provide it with the ability to offer additional services to
broadcast and mobile operator customers. The trials support and supplement
similar trials that are under way in the Czech Republic and Poland involving
the Company's other portfolio companies, CRA and Emitel.
BTCY is a cash generative business, and the Company expects it to deliver an
attractive payback period. At 31 December 2024, BTCY had €2.0 million (£1.6
million) in cash on balance sheet and is expected to distribute a significant
amount of this to the Company over the coming year.
BTCY is in discussions with leading mobile handset manufacturers to align
product release plans with the roll-out of 5G broadcast technology to ensure
smooth compatibility. BTCY also recently commenced discussions with a large
European commercial broadcaster regarding a trial for 5G broadcast covering
the broadcaster's headquarters.
Datacenter United (DCU)
The acquisition by the Company of a 47.5% economic (50% voting) interest in
DCU Invest NV and the linked acquisition by DCU Invest NV of Datacenter United
Brussels NV, the former owner of the data centre business of Proximus Group,
closed in February 2025. The transactions create a business ("Datacenter
United" or "DCU") consisting of 13 data centres across 11 locations in Belgium
with circa 13MW of IT capacity.
Following closing of the two transactions, TINC, the Belgian infrastructure
investor, continues to hold 47.5% of the economic (50% voting) interest in the
share capital of DCU, and DCU's chief executive officer, Friso Haringsma,
holds a 5.0% (non-voting) interest. The Investment Manager is continuing to
explore investment alongside the Company by a separate Cordiant-managed fund.
The combined group, on a pro forma basis, generated revenues of circa €40.3
million and had EBITDA of €15.1 million in 2023. There is outstanding gross
debt of circa €10.5 million. The combined group has a capacity expansion
potential of an additional 11.1MW, most of which could be built across the
existing 11 locations.
A long-term inflation-linked master services agreement has commenced between
Proximus and DCU for 10 years with two five-year extension option periods.
Proximus, as a direct customer, uses 37% of the combined group's IT power
capacity. Other customers across the combined group include a mix of blue-chip
corporates and government bodies, including Pfizer, Atos, Telenet and the
European Commission.
The Investment Manager will contribute its expertise in data centres to help
drive the performance of the combined group.
Market Overview
The Company's portfolio is concentrated in highly rated Western and Central
European economies which all experienced relatively healthy GDP growth in
2024. According to official estimates, Poland (+2.9%), Ireland (+1.2%),
Belgium (+1%), and the Czech Republic (+1.1%) outperformed the estimated EU
average GDP growth for 2024 of 0.9% 13 . Poland has been a standout performer
in Europe driven by strong household consumption which is expected to continue
into 2025. The Polish currency (PLN) has performed well to date and Poland is
benefiting from injection of EU funds which should support investment and
increased domestic production.
Whilst there has been continued volatility in the interest rate markets, the
Company has benefited by prudently implementing interest rate hedges over time
for its debt facilities in the portfolio. Importantly, the Company is not
exposed to GBP-denominated debt, which has been considerably more expensive
than EUR-denominated debt in recent times.
Demand for digital infrastructure services remains robust, driven by
multi-year trends towards the digitisation of the economy, continued growth in
mobile data services and the advent of new technologies such as generative
artificial intelligence (AI).
Recent AI developments demonstrate that AI is now shifting from predominantly
training stages to a phase where more use cases will be created and adopted.
DeepSeek has highlighted that AI training and its costs may have reached an
inflection point and are now becoming cheaper and easier to train. This
breakthrough will enable an increase in developers' uptake and consequently
will increase the number of use cases. While training AI large language models
requires highly concentrated, AI-specific data centres, different types of
data centres are required to enable end use cases. Colocation, interconnect,
and edge data centres, such as those operated by the Company's portfolio
companies, cater to this later stage of the value chain, most importantly,
catering to the adoption by the end customer/user.
For further information, please visit www.cordiantdigitaltrust.com
(http://www.cordiantdigitaltrust.com/) or contact:
Cordiant Capital, Inc. +44 (0) 20 7201 7546
Investment Manager
Stephen Foss, Managing Director
Aztec Financial Services (Guernsey) Limited +44 (0) 1481 74 9700
Company Secretary and Administrator
Chris Copperwaite / Laura Dunning
Investec Bank plc +44 (0) 20 7597 4000
Joint Corporate Broker
Tom Skinner (Corporate Broking)
Lucy Lewis (Corporate Finance)
Deutsche Numis +44 (0) 20 7260 1000
Joint Corporate Broker
Hugh Jonathan (Corporate Finance)
George Shiel (Corporate Finance)
Celicourt +44 (0) 20 770 6424
Public Relations Advisor
Philip Dennis/Ali AlQahtani/Charles Denley-Myerson
Notes to Editors:
About the Company
Cordiant Digital Infrastructure Limited primarily invests in the core
infrastructure of the digital economy: data centres; fibre-optic networks;
telecommunications and broadcast towers - in Europe and North America. Further
details about the Company can be found on its website at
www.cordiantdigitaltrust.com.
The Company is a sector-focused specialist owner and operator of Digital
Infrastructure, listed on the London Stock Exchange under the ticker CORD. In
total, the Company has successfully raised £795 million in equity, along with
a €375 million debt package comprising a €200 million Eurobond and €175
million of committed capex and revolving facilities, deploying capital into
six acquisitions: CRA, Hudson Interxchange, Emitel, Speed Fibre, Belgian Tower
Company and Datacenter United, which together offer stable, often index-linked
income, and the opportunity for growth, in line with the Company's Buy, Build
& Grow model.
About the Investment Manager
Cordiant Capital Inc is a specialist global infrastructure and real assets
manager with a sector-led approach to providing growth capital solutions to
promising mid-sized companies in Europe, North America and selected global
markets. Since the firm's relaunch in 2016, Cordiant, a partner-owned and
partner-run firm, has developed a track record of exceeding mandated
investment targets for its clients.
Cordiant focuses on the next generation of infrastructure and real assets:
sectors (digital infrastructure, energy transition infrastructure and the
agriculture value chain) characterised by growth tailwinds and technological
dynamism. It also applies a strong sustainability and ESG overlay to its
investment activities.
With a mix of managed funds offering both value-add and core strategies in
equity and direct lending, Cordiant's sector investment teams (combining
experienced industry executives with traditional private capital investors)
work with investee companies to develop innovative, tailored financing
solutions backed by a comprehensive understanding of the sector and
demonstrated operating capabilities. In this way, Cordiant aims to provide
value to investors seeking to complement existing infrastructure equity and
infrastructure debt allocations.
Cautionary Statement
This announcement aims to provide an update of developments that have taken
place since the release of the Company's interim results to 30 September 2024
in November 2024 and the resulting financial position of the Company and the
Company's portfolio companies. The financial position of the Company and the
Company's portfolio companies are subject to a number of risks and
uncertainties and could change from that described in this announcement.
Factors which could cause or contribute to such changes include, but are not
limited to; general geopolitical, economic and market conditions, including
interest rates, inflation rates and rates of foreign exchange, as well as
specific factors affecting the financial and operational performance and
prospects of the Company and the Company's portfolio companies.
This announcement contains forward looking statements, including, without
limitation, statements containing the words "believes", "estimates",
"anticipates", "expects'", "intends", "may", "might", "will" or "should" or,
in each case, their negative or other variations or similar expressions. Such
forward looking statements involve unknown risks, uncertainties and other
factors which may cause the actual results, financial condition, performance
or achievement of the Company and/or the Company's portfolio companies to be
materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. These forward-looking
statements speak only as at the date of this announcement.
1 All numbers shown throughout this trading update are estimates and are
unaudited.
2 EBITDA and revenue figures for Emitel and Speed Fibre are for the nine
months to 30 September 2024 as both companies have a 31 December year end.
3 EBITDA and revenue figures exclude DCU as it closed post Q3 and exclude
the recently announced BT Ireland acquisition.
4 AFFO calculated over the 12 months ending 31 December 2024.
5 The acquisition of BTCIL is subject to regulatory approvals.
6 Pro forma revenue includes DCU revenue from the year ended 31 December
2023 and BTCIL core adjusted revenue from the 12 months ended 30 September
2024.
7 GAV calculated on a pro forma basis using published 30 September 2024 Net
Asset Value and net debt as at 31 December 2024.
8 The acquisition of BTCIL is subject to regulatory approvals.
9 Pro forma revenue includes DCU revenue from the year ended 31 December
2023 and BTCIL core adjusted revenue from the 12 months ended 30 September
2024.
10 GAV calculated on a pro forma basis using published 30 September 2024 Net
Asset Value and net debt as at 31 December 2024.
11 Speed Fibre has a 31 December financial year end; the Q3 year to date
data presented here is for the nine months to 30 September 2024.
12 BTCIL revenues adjusted for exclusion of exiting customer and non-core
products.
13 According to Eurostat.
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