Digital 9 Infrastructure (DGI9) has published its audited results for the year ended 31 December 2024, a pivotal period for the company as it transitioned to a managed wind-down under the oversight of new investment manager InfraRed Capital Partners. The year saw key asset sales completed or agreed, but also a substantial markdown in NAV following a rigorous revaluation exercise.
NAV fell by 56.7% to £297m (34.4p per share), down from 79.3p at the end of 2023. The majority of the decline stemmed from valuation adjustments tied to agreed sale prices for Aqua Comms and EMIC-1, which accounted for £344m of the reduction. A further £83m was attributed to changes in the valuation of Arqiva, the company’s largest asset, reflecting longer-term uncertainty over broadcasting contract renewals due in 2027.
The board said that while the NAV decline is disappointing, the revised methodology and bottom-up valuation work conducted by InfraRed and an independent valuer provide a more robust and realistic basis from which to execute the wind-down. The board also disclosed it had launched a prior year valuation review (PYA) to investigate possible overstatements in the 2023 figures, though no restatement has yet been made pending the outcome of that review.
The year saw the sale of Verne Global completed for £347m, with proceeds used to repay £321m of the company’s revolving credit facility (RCF). The remaining £53m was successfully refinanced post-period end, and is expected to be repaid through a combination of EMIC-1 proceeds (c.£33m) and other divestments, ahead of the RCF’s maturity in June 2025.
Other key asset updates include:
- Aqua Comms: Sale agreed in January 2025 for $48m (£40m), pending regulatory approvals, which are expected to take up to 12 months.
- SeaEdge UK1: Disposal process is underway and described as progressing well.
- Elio Networks: Sale paused while InfraRed works on value-enhancing initiatives prior to marketing the asset.
- Arqiva: No sale expected before 2027, when contract renewals will provide greater visibility for potential buyers.
- Verne Earn-Out: The board is exploring options for early settlement or continuing to hold, depending on market conditions and business performance.
Operationally, the company’s portfolio revenue declined 4% year-on-year to £381m, while EBITDA slipped 1% to £179m. The company paid no dividends during the year and reported an EPS loss of 45.0p, reflecting both realised and unrealised losses.
Negotiations are ongoing with the company’s former manager Triple Point, both in relation to contractual termination costs and the reimbursement of a $2.8m fraud loss incurred at a subsidiary in 2023. As of the reporting date, no compensation had been received.
The board reiterated its commitment to realising assets in a way that balances value optimisation with the return of capital to shareholders. It acknowledged that market sentiment and the company’s share price continue to be weighed down by uncertainty around asset realisations and the legacy impact of prior management decisions.
[QD comment MR: This was always going to be a tough set of results for DGI9, and the numbers lay that bare. The halving of NAV, compounded by ongoing valuation uncertainty around Arqiva and legacy questions about prior-year reporting, underscores the scale of the challenge InfraRed inherited.
That said, progress has clearly been made. The Verne exit, Aqua Comms sale, and RCF refinancing are critical milestones in the wind-down. And while Arqiva can’t realistically be exited before 2027, having a stable long-term roadmap gives shareholders some visibility – albeit at the cost of prolonged capital lock-up.
The key now is timing and execution. DGI9’s assets remain strategically important, but realising full value in current markets is unlikely to be easy. Patience will be required, but the board’s approach – cautious, methodical, and transparent – is the right one given the circumstances. If the remaining exits are handled well, there is still scope to narrow the discount and preserve some value for shareholders.]
