The UK business (EAUS) is continuing to improve ahead of guidance as expected and its turnround can now be judged a success. Management has announced an aggressive plan to extract synergy from the recently acquired Thus
Prisa, the 98% owner of Sogecable, has put Spain’s leading pay-TV platform Digital+ up for sale in order to make a large reduction in its debts
In our view the potential for synergies from an acquisition of Thus by C&W, though more limited than might be supposed, would still have a significant impact on the combined entity at the EBITDA level
International performance continued to be weak apart from Macau, although well within EBITDA guidance. Turnaround in Jamaica remains a significant challenge
The long drawn out merger between the two Spanish pay-TV operators will finally be consummated in the next few weeks. As we have seen elsewhere in Europe, competition in pay-TV produces little but red ink. Investors will be pleased that Sogecable and Via Digital are finally combining. We have little doubt that this merger will eventually produce a profitable and successful business. But management appears too optimistic about the likely continuing cash drains as operations are combined and costs reduced over the next two years.