QuickView: In take-off mode
CityFibre (CFHL) has reported a 115% y-o-y increase in revenue and gains in its gross margin, showing the benefit of the rapid rollout of its fibre-optic networks and strong service demand. We highly rate CFHL’s attractive risk-minimising rollout strategy, whereby they first secure a long-term anchor tenant before any network build, and think that the company is set to emerge strongly into profit in future years. Our only major concern is if Ofcom carries out its current proposal to open BT’s dark fibre network and sets the access prices too low. Positively, Ofcom does appear to be aware of the risk to the sector, having rejected a similar proposal in 2012, due to the likely damage to competitors and the market.
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