The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas’ US business has added 16,600 new residential customers in the two years post-acquisition, and will provide the BISX-listed provider with combined revenue growth of more than 20 per cent over the next five years.

The company’s $30.817 million rights offering document, which has been obtained by Tribune Business, discloses that its Bahamian shareholders should soon enjoy the benefits of “significant growth” from its US operations.

Cable Bahamas’ four Florida purchases, worth a combined $100 million, were all merged into Summit Broadband on January 31, 2014, in a bid to achieve economies of scale, reduced costs and centralised finance and back office functions.

Suggesting that this had left its wholly-owned US subsidiary poised for growth, Cable Bahamas said Summit Broadband was set to begin delivering services to many of its new customer wins this year.

“Summit Broadband currently has in excess of 68,000 subscribers, and serves over 60,000 hotel rooms,” Cable Bahamas said. “Presently, the company anticipates significant growth from its Florida operations.

“Within Florida, the company has won a number of major commercial and residential contracts to provide its suite of services. The residential contracts won since acquisition exceed 16,600 units. The company is currently in its build out stage for most of these contracts and expects a significant portion to be in operations in 2016.

“Such contracts are mostly multi-year with a high likelihood of renewal, with terms ranging from five-10 years.”

Cable Bahamas, implying that its US operations give it a major growth and earnings opportunity beyond the Bahamas, and its second mobile license, said Summit Broadband’s clients currently include Disney, Universal and the Albany owner, the Tavistock Group.

“Summit Broadband has access to a market which exceeds one million households,” the Cable Bahamas rights issue document adds.

“These contracts and relationships are expected to provide significant revenue growth to the company in excess of 20 per cent in the aggregate over the next five years.”

While cable TV remains Cable Bahamas’ core business, generating 49 per cent of its revenue to end-September 2015, its move into other business segments has diversified its revenue streams.

Broadband Internet and telecommunications now account for 31 per cent, and 20 per cent, of its total revenues, respectively.

“As of January 2016, on a consolidated basis, Cable Bahamas serves approximately 115,000 cable subscribers, 86,000 broadband Internet subscribers and 50,000 voice subscribers, in both the Bahamas and South Florida,” the offering document says.

“Revenue from the company’s operations in the Bahamas and the US for the nine months ending September 2015 was $123.9 million, achieving operating income before depreciation and amortisation of $43.1 million, and net income of $5.5 million.”