By Jonathan Kent From Royal Gazette

Published Oct 31, 2014

Telecommunications from the KeyTech Group reported that earnings fell more than 30 percent in its last fiscal year as expenses related to acquisitions took their toll.

KeyTech, which owns Logic Communications, made net income of $5.7 million for the year ended March 31, 2014, compared to $8.3 million the prior year.

The company revealed in its earnings statement that it paid out $26.8 million to acquire North Rock Communications, which has since merged with fellow internet service provider Logic.

The acquisition was responsible for most of the $44.8 million of capital expenditure by KeyTech during the year, while the remainder was used to expand infrastructure to increase DSL speeds at BTC and the continuation of the fibre build and IPTV rollout in the Cayman Islands.

Since the end of the fiscal year, KeyTech has sold BTC to Barrie Holdings for $30 million.

Operating revenues for the year were $81.1 million compared to $74 million for the prior year, an increase of $7.1 million.

Data revenues increased $5.5 million as a result of the North Rock acquisition, while voice revenues declined $0.3 million.

Total operating expenses increased $9.8 million. KeyTech said this was largely due to the company’s acquisition and growth strategy.

Salaries and employee benefit expenses increased $1 million because of the additional staff required to support Logic Bermuda following the amalgamation. One-time redundancy costs in Bermuda and Cayman were $0.9 million, an increase of $0.3 million over the prior year.

“Notwithstanding the economic growth challenges in Bermuda and Cayman, the last 12 months have been successful in terms of strategic positioning for the company,” said KeyTech CEO Lloyd Fray.

“In Bermuda, KeyTech maintained its market share in spite of intense price competition in the telecommunications market. We focused on managing expenses across our subsidiaries as well as through the efficiencies and cost savings as a result of Logic’s amalgamation with North Rock and the acquisition of TeleCayman.

“The company’s growth strategy is geared toward owning data-access infrastructures that can meet the demands of future capacity requirements, diversifying earnings across two jurisdictions and enhancing shareholder value.”

Total cash dividends paid to common shareholders for the current and prior year was 48 cents per share.

Investment income was $129,158 as compared to $163,434 for the prior year.

KeyTech said its 2014 annual meeting will be held at 4pm on November 21, 2014.

IMAGE: KeyTech CEO Lloyd Fray

For more on this story go to: http://www.royalgazette.com/article/20141031/BUSINESS03/141039901

KeyTech suspends dividends

By Raymond Hainey From the Royal Gazette

The decision covers dividend payments for the quarter which ended last month and the quarter that ends in December.

A spokesman for the firm said the decision was due to the purchase of WestStar TV in the Caymans and taking a controlling share in Bermuda’s CableVision.

He added that the decision “was not taken lightly” and reflected the company’s need to “align and integrate the various business strategies.”

KeyTech offloaded the Bermuda Telephone Company for around $30 million to help pay for the Cayman acquisition.

The spokesman said: “Unlocking the full value of these transactions is the primary focus of the group for the remainder of the financial year and we expect this transformation will position us well for the future.”

And he added: “The board concluded that it is imperative that the businesses have access to any required funding necessary to achieve these synergies for the initial six-month period, post transactions.

“These transactions reflect our commitment and the importance of improving the service offerings of all subsidiaries and ensuring that we have access to the right technology and infrastructure for continued sustainability and future growth.

“After months of tireless and challenging work from both management and the board that spanned two jurisdictions, which included seeking approval from and negotiating with governments and regulators, we have achieved the desired outcome.”

KeyTech also announced that its annual report for the financial year that ended in March will be delayed “due to the complexities around the financial reporting requirements for these transactions”, but is expected to be released at the end of this month.

The annual general meeting of shareholders is scheduled for mid-November.

For more on this story go to: http://www.royalgazette.com/article/20141002/BUSINESS03/141009922

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Job losses at KeyTech’s Cayman subsidiary — no redundancies expected in Bermuda

By Raymond Hainey From The Royal Gazette

Published Sep 11, 2014

The Caymans subsidiary of Bermuda telecoms firm KeyTech has made at least a dozen people redundant from a recently-bought cable company.

KeyTech’s Logic took over rival cable firm WestStar only last week, selling off BTC in Bermuda to a group of investors to help finance the deal.

Senior managers at the cable company were among those laid off.

But KeyTech CEO Lloyd Fray said job losses were not on the cards for the Bermuda end of the operation.

Mr Fray said: “We don’t anticipate making any redundancies in Bermuda.”

A spokeswoman for KeyTech said the two Cayman firms would continue to operate under their separate brand names “for the time being”.

The spokeswoman told the Cayman Compass on Monday: “We plan to make a number of redundancies at WestStar over the next seven days.

“We will continue to assess the businesses after that time to ensure that we are operating as efficiently as possible.”

Logic plans to use the combined business to dominate the market, using its “fibre to home” network and WestStar’s customer base and offering high speed broadband and internet-based TV.

The spokeswoman added: “Logic and WestStar combined as one entity can achieve far more than either company separately.

“Investment capital will be available to complete the fibre to home network, creating value to Logic, our customers and the Cayman Islands.”

BTC was sold to Barrie Holdings for $30 million last month — a price below book value.

The KeyTech Cayman purchase was financed through a mixture of debt and equity, with KeyTech taking on nearly $70 million in debt and issuing more than 2.4 million shares to British Overseas Territory Cable & Telecommunications (BOTCAT), the owners of WestStar, which also holds a stake in Bermuda’s CableVision.

The deal meant that KeyTech got a controlling interest in CableVision and owns WestStar outright, which makes the firm the biggest provider of subscription TV in the Caymans.

For more on this story go to: http://www.royalgazette.com/article/20140911/BUSINESS02/140919951