Polish mobile operator PLAY has unveiled plans to launch an IPO on the Warsaw stock exchange, with its CEO promising to go after new growth areas.
The country’s second largest mobile operator, with 14.3 million subscribers and a market share of 27.6 percent at the end of the March, outlined its plans this morning (19 June).
CEO Jørgen Bang-Jensen, who has led the company for eight out of the 10 years PLAY has been in existence, tells European Communications: “We like organic growth and there are pockets of the market we haven’t addressed fully.
“We believe we can expand our product offering to deliver some good growth going forward.”
Understandably tight-lipped before a share has been sold, Bang-Jensen nevertheless hinted that moving deeper into the content and enterprise markets are two areas where progress could be made.
Regarding businesses, the CEO says: “We have very good market share in SoHo and small SMEs.
“What is natural is to look at large SMEs and small corporates.”
Expanding on a deal PLAY struck with music streaming service Tidal and the launch of TV/video offering NOW on the retail side is another area the CEO talked about in loose terms.
PLAY is indirectly owned and controlled by Tollerton Investments and Telco Holdings. The two financial holding companies, which hold 50.3 percent and 49.7 percent of PLAY’s share capital respectively, said it was “an appropriate time” to monetise part of their ownership.
They did not specify how much of their ownership they planned to list.
Asked about the two owners, Bang-Jensen said they had been “very good at supporting management” as the company moved from being s new entrant to the second largest player on the market behind Orange.
He adds: “We have still options to grow so an IPO is absolutely the right decision as it maintains the company in its present form and at the same time allows shareholders to monetise some of their investments.”
PLAY recorded operating revenue growth of 13 percent, to PLN6.1 billion, in 2016, while EBITDA jumped 14 percent to PLN2 billion.
Growth continued in the first three months of 2017, when operating revenue grew 9.6 percent to PLN1.6 billion and EBITDA increased 21 percent to PLN564 million.
PLAY’s management has targeted “mid-single digit” operating revenue growth over the medium term.
A cash dividend of PLN650 million for the 2017 financial year is slated to be paid out in Q2 2018 following the listing.
Proceeds from the IPO are not set to find their way into the hands of Bang-Jensen and his management team, but the CEO says he is not disappointed: “We are very cash generative… there will be sufficient cash in the company to invest strongly going forward.”
One area the operator will not be investing in is fibre. “We don’t see fixed-mobile convergent as an option for PLAY,” the CEO says.
Describing himself as a “fierce” advocate of mobile technology, Bang-Jensen says the likes of LTE, 5G and new devices “means you can use higher frequency bands [to cover] a much bigger geography”.
He adds: “With these technologies you can provide full household and full small business solutions entirely on the mobile platform and do so cost efficiently.”
Post-IPO, the CEO says his focus will be continuing to keep the business on a tight leash: “[Our biggest challenge] is to make sure we keep a lean and mean organisation.”
Adjusted EBITDA margin has grown from 31.3 percent in 2014 to 33.3 percent last year.
Arguably just as big a challenge will be getting to grips with impatient institutional investors.
Although Bang-Jensen has some 24 years of telecoms experience, he is preparing for his first job in charge of a public company.
“Personally it will be an interesting challenge for sure,” he says.
“But the management team here will be up to the challenge.”
In a press release accompanying the IPO announcement Bang-Jensen said: “PLAY is a unique company in the European telecoms sector.
“Our revenue growth and profitability outstrips our listed peers, as a result of our focused strategy and our status as Poland’s favourite brand.
“We have created a business model that enabled a challenger operator to take a market leading position within a few years, while generating free cash flow in line with the best in the industry.
“PLAY benefits from consistently strong performance of the Polish economy and the increasing sophistication of our customer base’s use of data, so we believe we can offer investors an unrivalled combination of growth and returns in our sector.”