Lite Access Technologies Inc. (LTE.V) use of innovative and proven trenching technologies, alternate methods of deployment and specialist products reducing the cost the network deployment for telecommunications operators.
LTE.V provides clients with integrated solutions, select components, for the design and implementation of fibre optic networks. Lite Access' products have been deployed in many high-profile communication networks including Olympic facilities, military and government, and numerous communities throughout the UK, the USA and Canada.
In addition, global telecommunications companies that have adopted Lite Access as the "solution of choice" for the least invasive, most cost effective and future-proof fibre optic connectivity available.
Growth Drivers
CityFibre
CityFibre;UK's largest alternative provider of wholesale fibre network has numerous roll outs underway for 8 million premises with open-access full fibre infrastructure through a £4 billion Gigabit City Investment Programme.
CIT
The Connect to Innovate (CTI) program will invest $500M by 2021, to bring high-speed internet to 300 rural and remote communities in Canada to ensure that they take advantage of the opportunities afforded by the digital age.
News Releases
Mar. 2 - Closes Final Tranche of Financing: Together with the first tranche of the Financing LTE.V received $3,5M.
The proceeds of the Financing will be used for potential acquisitions and working capital purposes.
Mar. 3 - Reports Q1 2020 Financial Results: The revenue decrease is related to 1) no meaningful revenue from UK operations as the company transitioned from the Gigaclear contract to negotiating and securing the CityFibre contract; 2) the Canadian western market experiencing a slowing of activity and 3) revenue in the prior year quarter benefited from a contract with a major Canadian telecom customer which did not occur in the current quarter.
Mar. 6 - Closes Expanded Credit Facility with Royal Bank of Canada: In cooperation with Export Development Canada (EDC) and on top of the current undrawn $0.50M revolving demand credit facility at RBC's prime plus 2.60%, RBC has approved an additional $1.65M prime plus 0.66%, with the first and second credit facilities not to exceed $1.9M.
Mar. 11 - Field crews mobilized for fibre-to-the premises (FTTP) installation in Bury St Edmunds, England. The contract valued at approximately $13M over 2 years, was awarded to the Company by CityFibre on January 22, 2020.
Mar. 20 - Letters to shareholders: How are we coping with Covid-19: "... the UK government’s 2020 budget reaffirmed its commitment to invest a total of £5 Billion to roll out full-fibre broadband across the country.(1)". LTE.V's CEO.
Apr. 21 - Contract from CityFibre ($20M) for Fibre Roll Out in Cambridge England; Provide Operational Update. CityFibre, the UK’s third national digital infrastructure platform, has awarded the Company a contract for fibre-to-the premises (FTTP) installation to over 20,000 homes in Cambridge, England.
The contract is valued at approximately CAD$20 million over 21 months. CityFibre is based in London and is jointly controlled by Antin Infrastructure Partners and West Street Infrastructure Partners. The later is a fund managed by Goldman Sachs’ Merchant Banking Division, focused on direct investments in infrastructure globally
May 28 - Awarded Municipal Fibre Build in Clearwater County, Alberta Valued at Approximately $1M: To design and construct a fibre-optic backbone that will include a roughly 13km fibre segment to be completed prior to April 2021.
The Connect to Innovate (CTI) program will invest $500M by 2021, to bring high-speed internet to 300 rural and remote communities in Canada to ensure that they take advantage of the opportunities afforded by the digital age.
June 1 - Q2 2020 Financial Results and Provides Business Outlook: Covid-19 affected productivity also Q2 was dominated with heavy ramp up costs in Lowestoft and Bury St Edmunds which affected financial performance.
The good news is that Q3 and Q4 should demonstrate improvement quarter over quarter as revenue is recognized from the two cities and we bring online Cambridge as well.
June 2 - Grants Stock Options: Issued 2.1M options at $0.82 cents to its directors, officers, employees and consultants.
Aug. 20 - Accelerates Warrant Expiry Date: Approximately 7M Warrants are currently outstanding and are subject to acceleration. If all Warrants are exercised, Lite Access will receive proceeds of approximately $4.6M.
Aug. 28 - Reports Q3 2020 Financial Results; Revenues up 367% over Q3 2019 with a Gross Margin of 18%.
Sep. 14 - Receives $4,682,340 through warrant exercise: Shareholders have exercised 7.2M warrants (98% of total) for $4,682,340. The Company previously announced the acceleration of the expiry date to September 11, 2020.
The proceeds from the warrant exercise strengthens the Company's financial position and the additional capital will be used to further the Company's efforts in the United Kingdom.
Sep. 17 - Awarded Fibre Installation Contract in Prince George, BC. Prince George, the largest city in northern BC, is launching a multi-phase municipal fibre optic network to enhance connectivity. The total contract value is $1,410,669.
Summary
Orders
In April, LTE.V received a $20M contract from CityFibre for a fibre-to-the premises (FTTP) installation to over 20,000 homes in Cambridge, England. Note that the latest CityFibre contract awarded in April, was the third in less than six months. LTE.V was previously awarded Lowestoft, and Bury St. Edmunds.
In May, Lite Access disclosed a contract with Clearwater County in Alberta for $1M. Last month, LTE.V announced another contract with Prince George, BC for $1.4M.
Earnings
Revenue for LTE.V has increased exponentially in the last three quarters. Aside from Q2 2020 which was impacted by Covid-19, Lite Access has been able to contain expenses and considerably scale up its revenue in Q3 2020.
Year to date, LTE.V has almost eclipsed the FY 2018 revenues ($9.57M vs. $9.69M) with a significantly lower amount of net loss ($3.87M vs. $10.25M). Whether the company is able to meet FY2019 remains to be seen. However, Lite Access ended Q3 2020 in a good position with more than $2.4M in working capital.
Financing
Back in March, LTE.V raised $3.5M at $0.50 cents (warrant $0.65 cents). In addition, with the support of Export Development Canada (EDC), Lite Access expanded its credit facility with RBC from $0.5M to up to $1.9M. Recently, LTE.V received $4.68M from an accelerated warrant exercise. In total 98% of the 7.2M warrants were exercised!
Coverage
On September 30th, Beacon initiated coverage of LTE.V and suggested a target of $1.30. the report was insightful:
Exposure to Secular Growth Trends in Data Consumption and WorkFrom-Home.
"...is a provider of fibre optic network deployment services to major global communications companies in support of their wired and wireless (e.g. 5G) network buildouts. Penetration rates of full fibre-to-the-home in LTE’s two key markets remain very low, with UK currently at 2.9% and Canada at 17.2%, well below the average for OECD countries of 28%."
Strong Backlog Underpinning Exceptional Revenue Growth and Improving Profitability
"...In addition to a steady flow of business in Canada, LTE’s has a confirmed order backlog of $54 million for deployment of 67,000 premises in three cities in the UK over the next 24 months."
Last month, CityFibre announced the appointment of Bechtel to support the acceleration of its roll out. Noted below:
The first wave of construction contract awards under CityFibre’s Accelerated Tenders Award Programme are expected in the coming weeks. The new projects will create thousands of jobs across CityFibre’s construction partners. By the end of 2021, it is anticipated that network construction will be underway in more than 100 towns and cities across the UK.
In Short
Given the achievements of the past 12 months, LTE.V seems very well positioned for further growth.
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