Digital 9 Infrastructure Reports H1 2025 Results as Wind-Down Progresses

Digital 9’s H1 2025: Wind-down steady, debt repaid, capital returns in sight

Digital 9 Infrastructure (D9) has posted unaudited half-year results to 30 June 2025 that underline a stabilising wind-down. The chair says phase one is largely complete, the revolving credit facility is fully repaid, and the Aqua Comms sale is expected to complete by year end. That sets up the first capital returns to shareholders in early 2026, subject to final proceeds and working capital needs.

There is still work to do. NAV edged down to 32.7p per share and the big value unlocks now pivot to 2027, when D9 expects to kick off sale processes for Arqiva and Elio Networks – with key digital terrestrial TV (DTT) contract decisions for Arqiva due that same year.

Wind-down progress: disposals, debt clearance and a cleaner slate

• Disposals delivered: SeaEdge UK1 sold in June for £10.3 million net; EMIC-1 divestment completed in May for $43.0 million net; Aqua Comms divestment announced in January at $44.5 million net (including completion adjustments and adverse FX as of June 2025).
• RCF fully repaid: The revolving credit facility – £53 million at December 2024 – was cleared in June using disposal proceeds and working capital surpluses.
• Capital returns: First distributions to shareholders are expected in early 2026, after Aqua Comms completes (still subject to multi-jurisdictional regulatory approvals). The quantum is not disclosed and depends on final Aqua Comms proceeds and future working capital.
• PYA concluded: An independent Prior Year Adjustment review reduced the 31 December 2023 valuation by £111.5 million, effectively resetting the baseline.

NAV, portfolio and liquidity: what moved the numbers

NAV slipped to £283.1 million (32.7p per share) from £297.3 million (34.4p) at 31 December 2024. The 1.7p decline over six months was driven by a 0.7p fair value reduction in Aqua Comms from completion account updates and adverse FX, a 0.5p write-down of the Verne Global earn-out to £Nil, and ongoing fund costs. This was partly offset by 0.4p of business plan outperformance at Elio Networks.

Metric	30 Jun 2025	31 Dec 2024	30 Jun 2024
IFRS NAV	£283m	£297m	£403m
IFRS NAV per share	32.7p	34.4p	46.6p
IFRS Investment Valuation	£279m	£286m	£384m
Total Portfolio Value	£280m	£331m	£424m
Aggregate Group debt	£191m	£238m	£233m
Group cash (unrestricted)	£4.0m	£17.7m	£23.9m

The aggregate Group debt reduction to £191 million is meaningful and reflects progress through disposals and deleveraging, including the full repayment of the RCF. That said, unrestricted cash at the Group level is modest at £4.0 million, so timing and proceeds from Aqua Comms matter.

Operational performance: Arqiva drives revenue, mix weighs on EBITDA

• Consolidated portfolio revenue rose 6% year-on-year to £378.8 million (H1 2024: £356.9 million), largely from the ramp-up of Arqiva’s water metering contracts.
• Consolidated EBITDA decreased 3% to £165.6 million (H1 2024: £170.2 million), mainly due to a changing business mix at Arqiva.

By asset: Arqiva, Aqua Comms, Elio Networks

• Arqiva: Revenue £358.1 million, up 7%; EBITDA £157.0 million, down 4%. Strong top-line from metering, but mix shift trims margins.
• Aqua Comms (excluding EMIC-1): Revenue £16.6 million, up 4%; EBITDA £6.5 million, up 82%. Profitability improved ahead of completion of the divestment.
• Elio Networks: Revenue £4.1 million, flat; EBITDA £2.0 million, down 9%. Management flags “value-enhancing initiatives” underway.

Aqua Comms completion and capital returns: what to expect

Aqua Comms’ divestment was announced in January at $44.5 million net, inclusive of completion adjustments and adverse FX as of June 2025, and remains subject to multi-jurisdictional approvals. The Board expects completion by year end, with the first capital returns to shareholders in early 2026. The size of those returns is not disclosed and will depend on final Aqua Comms proceeds and the Group’s working capital requirements.

2027 is pivotal: Arqiva DTT and asset sale processes

D9 is targeting 2027 to commence sale processes for Arqiva and Elio Networks to maximise value. Importantly, key decisions on Arqiva’s DTT (digital terrestrial TV) contract renewals are due in 2027, a logical anchor point for buyers and valuation clarity. If execution and market conditions cooperate, this could be the major value realisation phase of the wind-down.

Shareholder takeaways: the good, the bad, and the watchpoints

• Stabilised platform: The RCF is fully repaid and the wind-down is on track, which reduces refinancing risk.
• NAV drift: NAV per share fell 1.7p to 32.7p, driven by Aqua Comms fair value adjustments, a write-down of the Verne Global earn-out to £Nil, and costs, partly offset by Elio outperformance.
• Performance mixed: Portfolio revenue up 6%, but EBITDA down 3% due to Arqiva’s mix shift.
• Returns framing: Total return on a NAV basis was -4.7% in the half; dividends remain suspended (no dividends paid).
• Costs: Ongoing Charges Ratio (annualised) was 1.90%.
• Liquidity: Group cash is £4.0 million – near-term proceeds and working capital discipline are important.

Key risks to monitor

• Regulatory approvals: Aqua Comms completion timing and final proceeds are key to unlocking early 2026 capital returns.
• Foreign exchange: FX moved against Aqua Comms during H1 and remains a swing factor.
• Working capital: The size and timing of returns depend on cash needs during the wind-down.
• Arqiva mix and 2027 renewals: EBITDA sensitivity to mix and the outcome of DTT contract decisions in 2027 will drive valuation.
• Execution risk: Sale processes for Arqiva and Elio are slated for 2027; market conditions and buyer appetite will matter.

My take: a cleaner balance sheet and a clearer path, but patience required

On balance, this is a constructive update. The heavy lifting on disposals and the repayment of the RCF de-risk the story, while Aqua Comms – once completed – should fund the first capital returns. The PYA clean-up is painful but necessary, and it makes the remaining NAV more credible.

The flip side is time. The big value catalysts are in 2027, and H1 showed how mix can nudge EBITDA even when revenue grows. For now, D9 looks to be doing the right things in the right order: fix the balance sheet, clean up the numbers, complete Aqua Comms, and prepare Arqiva and Elio for a 2027 exit window.

Jargon buster

• RCF: Revolving credit facility – a flexible bank borrowing line.
• NAV: Net asset value – the value of assets minus liabilities, per share.
• EBITDA: Earnings before interest, tax, depreciation and amortisation – a proxy for operating cash profit.
• PYA: Prior Year Adjustment – a restatement to correct prior period valuations or accounting.
• DTT: Digital terrestrial TV – Arqiva’s broadcast platform contracts up for key decisions in 2027.
• APM: Alternative Performance Measure – non-IFRS metrics used to assess performance.