Accounts for UK Broadband ISP Airband Highlight Funding Risks and Job Cuts UPDATE
Rural broadband ISP Airband, which has deployed a full fibre (FTTP) and wireless (FWA) broadband network that covers parts of Wales and South West England, recently published their latest accounts to the end of 2023 and revealed a sharp fall in employees (from 485 to 235) and the urgent need for new funding by 1st February 2025.
The operator recently stated that their broadband network now spans “more than 440,000 premises in over 200 communities across 7 counties“ (here), which we’re told breaks down as being 175,000 premises via “fibre” (FTTP) and 265,000 premises via wireless (FWA) – all Ready for Service (RFS).
However, the company has also had a rough couple of years, which saw recent restructuring impact their pace of build and result in redundancies as they shifted their focus toward growing take-up via greater commercialisation of their existing network (here). One of the other fallouts from this was the recent move to scale-back their deployment contract with the Connecting Devon and Somerset (CDS) programme (here).
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Airband’s latest accounts show that the operator has now spent a total of £207m on their network build to-date (up by £72m in 2023 alone) and is at risk of running out of funding. “The revised funding requirements of the business exceeds the current available facilities and new funding will be required by 1st February 2025,” said the results.
Despite the problems, the company’s Directors said they remain confident that “further strategic funding will be secured to allow the Group and Company to continue in operation for at least until 1st November 2025“.
Summary of Key Airband Figures to Dec 2023
➤ Revenues of £4.857m (up 41% this year vs 28% last year)
➤ Operating loss of £37.064m (2022: £20.972m)
➤ Total assets of £181.92m (2022: £151.14m)
➤ Total liabilities of £159.83m (2022: £116.41m)
➤ Shareholder funds of £22.086m (2022: £34.73m)
➤ Closing cash balance of £4.946m (2022: £15.809m)
UPDATE 12:20pm
We’ve had a comment from Airband.
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Kash Rahman, MD at Airband, told ISPreview:
“Abrdn remain supportive investors and have to date put £200m in to the business to fund our future plans.
We are performing well and are actively engaged with Abrdn as we approach the next phase of funding.
The accounts are in line with previous years and the cadence of funding put into the business in the first quarter of the year.”
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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That’s a basket case – the asset value is far too high. There’s going to be a massive correction.
It works out at £413 per single RFS.
@Ed: Where do you get the £413 figure from?
Based on the latest figures for capital invested: £291m (£120m equity + £126m debt at 31.12.2023 + another £45m debt in 08.2024) and the 440k premises from 10.2024 I get a CPPP of £661?
BUT (big but) that includes the 265k FWA premises which I imagine have a very low CPPP. That makes the 175k “proper” FTTP that have been built significantly more expensive per premise.
“new funding will be required by 1st February 2025… to allow the Group and Company to continue in operation for at least until 1st November 2025“.
Gosh, yes please. I’d love to throw some good money after bad just for the promise of doing it again nine months later.
You’ve got to question really who and how these ISPs have been able to get away with such poor running! ABDRN just seem to be throwing money at Airband and Wessex Internet both seem to be coming back asking for more because they can’t manage their companies let alone their bank accounts!
To be fair, this is kind of the nature of what happens when building a new network and seeking to expand that network via such funding sources. You run up a lot of debt and have to wait a long time for payback (often 10-15 years in the case of FTTP). But there’s a lot of variation in how successful (or not) it has been, thus far, across the industry.
I would add that Wessex Internet’s accounts are actually in a much better place, if you take a look.
£291m invested (£120m equity + £126m debt per at 31.12.2023 + additional £45m debt in 08.2024)
Surely the £200M has been invested to fund past plans, not future plans, as it’s all gone?
“Performing well” is relative, when interest payments far outstrip revenue despite revenue growth. Their GP is very suspect to, but unsurprising if customer acquisition is based on 6months free & buying out £250 existing contract, plus acruel install costs.
If it’s going so well why are the restrictions on the £99M loan facility capped at £77M draw down?
More funding post Jan 2025 will result in greater interest falling due, and again in Nov 2025 before reality of finance facilities maturing in 2026, ABDRN must need their heads testing to keep going, unclear what the 235 remaining employees are delivering?
Well played Mark for drawing the distinction between Wessex and Airband. Wessex just announced 10,000 customers and have similar revenues to Airband but from the accounts Wessex have only needed about one quarter of the investment from Aberdeen.
Airband is unexplainable. It is the perfect example of both capital and business incompetence. There is no justification for what that business has returned for the money (from other people, entitled to professional investment behaviour).