For immediate release 23 MARCH 2015

DELIVERING THE GIGABIT REVOLUTION

CITYFIBRE INFRASTRUCTURE HOLDINGS PLC (‘CityFibre’ or the 'Group')

AUDITED FULL YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

CityFibre (AIM: CFHL), a leading designer, builder, owner and operator of fibre optic infrastructure to enable gigabit connectivity in UK towns and cities, today reports full-year results for the Group for the year ended 31 December 2014. Financial Highlights:

Revenue increased 105% to £3.8m;

New contracts totaling £11.1m in value signed during the year;

Gross profit increased 117% to £3.3m;

Gross margin expanded from 81% to 85%;

Adjusted EBITDA loss of £3.6m, in line with expectations, reflecting ongoing investment in long-term growth opportunities;

Network capex of £4.7m, up from £0.7m in 2013;

Cash balance at period end of £33.2m; this includes £29.0m of short-term deposits. Operating Highlights:

£46.5m in gross equity raised during the period

New city wins demonstrating great progress in establishing new anchor mechanisms across all verticals of the business (PSN, Mobile, Business, Consumer) -

o Acquisition of Coventry Metro Area Network asset, adding 306 connected customer sites and 62% additional fibre footprint to the CityFibre portfolio;

o First PSN national framework win with Easynet to connect public sector sites in Kirklees;

o First new city anchor based on aggregation of business segment demand, in partnership with Internet For Business in Aberdeen;

Local access network route kilometres grew by 91%, to 543km. Connected customer sites nearly doubled, to 885 as at 31 December 2014. Reseller and service providers on-net up to 25 from 2 at the start of 2014;

Strong business community interest in Peterborough, reflected in 1,000 businesses pre-registered, and 64 under contract at period end;

Landmark Joint Venture (“JV”) signed with Sky and TalkTalk to deploy a trial city-wide Fibre-to-the-Home (FTTH)/Fibre-to-the-Premises (FTTP) network in York;

National framework agreement signed with EE, Three UK and MBNL to deploy the UK’s first dark Fibre-to-the-Tower network. First phase of construction complete at period end.

Post Period End Highlights:

Phase 1 contract to construct Community Safety Network with global ICT specialist Logicalis under PSN framework in Newport;

Edinburgh selected as next Gigabit City via contract with Commsworld for migration of business leased circuits. Initial network deployment of 50km out of an anticipated 150km build;

Continued conversion of business segment demand in Peterborough, with 102 customers now under contract in March.

Greg Mesch, Chief Executive Officer of CityFibre, commented:

"2014 was a truly transformational year for CityFibre in which we secured four new city project wins, a landmark joint venture with Sky and TalkTalk, a national framework agreement with two leading mobile network operators, and £46.5m of additional equity funding. This incredible achievement is testament to the underlying strength of our business model. In addition, we are seeing consistent growth across all our footprints.

“The ongoing demand for gigabit connectivity continues to generate significant interest across our four key vertical markets. This robust demand for next generation infrastructure reflects the compelling need for a fit-for-purpose, local access broadband network capable of delivering gigabit capability to towns and cities where internet and mobile traffic is growing at more than 20% per annum.

“We have started 2015 well, with £6m in new contracts added so far in the first quarter. The business is strongly capitalised and remains well-positioned to deliver further growth and gain ongoing market traction in 2015."

For further information, please contact:

CityFibre Infrastructure Holdings plc www.cityfibre.com

Greg Mesch, Chief Executive Officer Tel: 0845 293 0774

Terry Hart, Chief Financial Officer

James Enck, Head of Investor Relations Tel: 0333 150 6283

finnCap (Nomad and Joint Broker) www.finncap.com

Stuart Andrews / Christopher Raggett (Corporate Finance) Tel: 020 7220 0500

Simon Johnson (Corporate Broking)

Liberum (Joint Broker) www.liberum.com

Steve Pearce / Steven Tredget / Richard Bootle Tel: 020 3100 2000

Vigo Communications www.vigocomms.com

Jeremy Garcia / Fiona Henson Tel: 020 7016 9570

About CityFibre:

CityFibre enables gigabit connectivity through designing, building, owning, and operating fibre optic network infrastructure. It is the largest independent provider of fibre infrastructure to mid-sized cities and major towns across the UK, providing gigabit-capable infrastructure for enterprise and public sector organisations, service providers, mobile network operators and businesses.

The Group owns and operates 543 route kilometres of local access networks serving 885 customer locations in 60 towns and cities in the UK, including York, Coventry, Peterborough, Huddersfield, Hull, Sheffield, Newcastle, Dundee, Bath, Derby and Doncaster.

To date the Group has launched five Gigabit City projects in York, Peterborough, Coventry, Aberdeen, and Edinburgh, where city-wide pure fibre networks known as ‘COREs’ bring world-class Internet connectivity and the benefits of gigabit speeds to every aspect of the city’s community. The CityFibre COREs are deployed using the Company’s Well Planned City (WPC) design philosophy, in which its city-wide core fibre infrastructure is designed with thousand-strand fibre cables in dual ducts optimally routed to serve the present and future demand of the public sector, mobile base stations, business park estates, and ultimately designed to serve as feeder and distribution network for Fibre-to-the- Home deployments.

CityFibre is also a proud member of a joint venture with TalkTalk and Sky. Established in early 2014, the collaboration aims to prove the viability of gigabit speed Fibre-to-the-Premises (FTTP) networks and services for homes and businesses. Work is currently underway to connect tens of thousands of homes and businesses in York to a future-proof FTTP modern digital infrastructure.

CityFibre is based in London, United Kingdom, and its shares trade on the AIM Market of the London Stock Exchange (AIM: CFHL).

To find out more, please visit: www.cityfibre.com

Chairman and Chief Executive's Statement

We are very pleased to present the first full year financial results for CityFibre Infrastructure Holdings plc (‘CityFibre’ or the ‘Group’), following its admission to AIM on 17 January 2014 and have been extremely pleased with the pace and breadth of the Group’s development over the past year. During this period the Group delivered new milestone contracts across our four key vertical markets, as well as two ground-breaking deals through the Joint Venture agreement with Sky UK Limited (“Sky”) and TalkTalk Group Limited (“TalkTalk”), and the national framework agreement with EE Limited (“EE”), Hutchison 3G UK Limited (“Three UK”) and Mobile Broadband Network Limited (“MBNL”). New city wins were also ahead of our expectations outlined at the time of the IPO in January 2014, reiterating the huge demand for dark fibre solutions across the UK. Financial summary

Revenue for the period was £3.8m, ahead of market expectations at the time of the secondary share placing in June 2014. Gross margin of 85% marks an improvement of four percentage points during the period and demonstrates the high operating leverage inherent in the dark fibre business model. Adjusted EBITDA loss of £3.6m was also in line with our expectations, as the business continues to invest in resources to support its strong growth trajectory. The business added £11.1m in new contracted revenue during the period, reflecting the greater-than-expected number of project wins during the course of 2014. Net cash outflow before financing, and amounts on short-term deposit, of £8.9m reflects the high levels of capital investment and incremental resourcing undertaken by the Group to secure future growth. Financial position

Following two successful equity offerings during 2014, with gross proceeds totalling £46.5m, the Group remains well-capitalised, with cash and cash equivalents at the end of the period of £33.2m, which includes £29.0m on short-term deposit. As announced in early January 2015, the Board has identified debt funding as a priority issue in the ongoing capital formation of the Group and has appointed EY as advisor in this capacity. The Group has made good headway in discussions with potential lenders in pursuit of a flexible funding structure and will advise in due course as to the progress of the debt-funding process.

Operating review The Group’s two main objectives during 2014 were as follows:

To both secure adequate equity funds and create a capital structure capable of delivering our growth aspirations;

To secure new anchor projects across all four of the market verticals which it serves (namely public sector, mobile, business and consumer segments).

The Company was admitted to trading on AIM on 17 January 2014, raising an initial £16.5m and establishing a strong platform from which to expand our operational footprint. Following an acceleration in new addressable business opportunities in the first half of the year, the Group raised an additional £30.0m in a secondary share placing, which closed on 9 June 2014. The two equity raises equipped the Group with a strong balance sheet, as well as a diverse shareholder base to support its future growth prospects. Over the period, CityFibre has demonstrated its capability to anchor new projects through a number of different methods and across a number of different market verticals, including two groundbreaking projects for the UK market:

On 15 April 2014, CityFibre announced a Joint Venture (“JV”), with Sky and TalkTalk, to develop a trial Fibre-to-the-Home network in the City of York. The JV, which is owned 33.3% equally by the three partners, leverages CityFibre’s existing York metro network in deploying FTTH throughout the city. The announcement was the first example of two large established service providers collaborating to procure dark fibre infrastructure from a new alternative provider;

On 13 November 2014, it was announced that CityFibre had signed a national framework agreement to supply dark Fibre-to-the-Tower to major mobile network operators EE, Three UK and MBNL.

The Peterborough CORE project, signed in November 2013, commenced construction in April 2014 and was completed in March 2015. During construction, CityFibre ran a pre-registration campaign, “Gig Up Peterborough” to measure interest and demand in the local business market. The results of this campaign far exceeded management expectations, with over 1,000 businesses having registered interest to date, representing approximately 25% of all businesses in Peterborough. As at 31 December 2014, 64 businesses were signed to contracts and either connected or were in the process of being connected. The acquisition of the Coventry Metro Area Network (MAN) asset in June 2014 added 306 additional public sector sites to CityFibre’s base, increased our total footprint of metro local access fibre networks by approximately 62%, and opened up a market of over 9,000 businesses to commercial development. Another landmark for CityFibre was the Kirklees Public Services Network (PSN) win in August 2014, in conjunction with leading national service provider Easynet Enterprise Services Limited (“Easynet”). This 72km build to connect 176 public sector sites in communities including Huddersfield, Dewsbury and Batley marks the first PSN procurement to incorporate a significant dark fibre component, and also represents CityFibre’s first engagement as a supplier to a successful PSN framework bid. The Group made further headway in the business connectivity market during the second half of the year, announcing an anchor contract in Aberdeen with locally-based service provider Internet For Business (“IFB”) for an initial deployment of 52km of network. The deal constitutes a new city network anchoring mechanism based on aggregation of contracted business revenues, an approach which the Group believes has great potential for replication across the UK. In November, CityFibre was pleased to announce a national framework agreement with leading mobile players EE and Three UK, along with their infrastructure joint venture MBNL, for the deployment of dark Fibre-to-the-Tower. The first deployment under the framework agreement is currently underway in Kingston-upon-Hull, comprising 62km of network. Board and employees

Over the course of 2014, the CityFibre Board was greatly enhanced with the addition of two Non-Executive Directors:

Sally Davis, former CEO of BT Wholesale, joined the Board of CityFibre in February 2014, and chairs the Remuneration Committee;

Stephen Charlton, former Managing Director at Fortress Investment Group, was appointed to the Board in November 2014, and chairs the Audit Committee.

Massimo Prelz Oltramonti stepped down from the Board in September 2014, to pursue other opportunities, and the Board wishes to thank him again for his contribution to the Group.

In response to the strong pipeline of business, CityFibre has also enhanced its wider team over the period, with the addition of experienced and talented professionals across the commercial, technical, and financial functions of the Group.

Strategy

The Group made significant headway in its Gigabit City strategy in the period, securing four new city projects and adopting new anchoring mechanisms including asset acquisition, partnership with PSN framework providers, aggregation of business market demand, and large-scale partnership with mobile infrastructure providers. We are pleased to have succeeded in diversifying the means of entry into new cities, as this had been identified as a key priority for CityFibre. Beyond winning new contracts, the other key element of the Gigabit City strategy is successful commercialisation of the asset via additional contracted revenues which generate high returns on incremental capex. Here, the Group also continues to perform strongly. Its most commercially mature city project, the York CORE, added £1.2m in new contracted revenues during the period, the highest level seen in any year since the project’s launch. On a cumulative basis, the York CORE project now stands at Total Contract Value (TCV)/capex of 124%, up from 94% at the time of the original anchor contract. The recently completed Peterborough CORE network build has already delivered 102 contracted business customers as at 20 March 2015, and the pre-registration campaign on the acquired Coventry CORE network is also showing a promising trajectory. Ultimately, the Gigabit City strategy aspires to deliver fibre to virtually every residential and commercial premises in a city. The formation during 2014 of the Group’s JV with Sky and TalkTalk is a strong first step in this direction, which the Board views as a critical milestone in the Group’s long-term strategic development. Outlook

Since its admission to AIM, CityFibre has seen strong demand across all four of its market verticals, delivering new city wins at a pace ahead of market expectations. The Group continues to gain significant traction in the first quarter of 2015, announcing two new city deployments (Newport and Edinburgh) and delivering £6m in new contracts at high capex coverage levels. We are excited that the scale of projects currently in the pipeline is larger than originally anticipated.

The Board has therefore ensured that the business has a scaled platform from which to capitalise on these and other growth opportunities. As such, the Group continues to invest in key staff across the commercial, technical and programme management functions of the business to deliver the near term growth objectives. We look forward to updating the market on our progress and further city wins in the current financial year. Peter Manning Non-Executive Chairman 20 March 2015

Greg Mesch Chief Executive 20 March 2015

Financial Review

CityFibre Infrastructure Holdings plc acquired CityFibre Holdings Limited on 9 January 2014. The results reflect the first year of trading post-IPO. The comparative results for the year to 31 December 2013 relate to the trading performance of the CityFibre Holdings Limited group of companies. Profit and loss Revenue of £3.8m was generated primarily from secure long-term contracts and largely from counterparties serving public sector end-customers with a very high propensity to renew at the end of the contract term. The total number of connected customer premises across the Group’s portfolio of metro fibre networks at period end was 885, an increase of 90% from 31 December 2013.

Revenue growth of 105% year-on-year arose from expansion of existing networks, with initial revenues from new contract wins commencing in the second half of the period. The York CORE network added £1.2m in new contracted revenues during the period, bringing the total level of contracted revenues to cumulative capex to 124%, up from 94% under the original anchor contract.

Gross profit of £3.3m increased by 117%, with gross margin expanding from 81% to 85% during the period, reflecting the high operating leverage inherent in the operation of dark fibre networks.

Administrative costs increased to £10.7m in the period from £5.7m in the prior period. The movements include:

Share-based payment charges of £1.4m recognised in relation to the share option issues in the year (there was no charge in the prior year);

Non-recurring costs of £0.9m; £0.3m in relation to professional fees associated with fundraising activities and staff bonuses of £0.6m in respect of performance leading up to the IPO;

Staff costs increased by £1.6m, excluding the share-based payment charges and staff bonuses detailed above, compared to the prior year. On a like-for-like basis staff costs, excluding share-based payments, increased by 32%;

Depreciation and amortisation increased by £0.3m compared to the prior year;

Other general administrative costs increased by £0.8m in the year.

The Group has made a number of key appointments in the year and invested in an organisational structure that is positioned to expand the business. During the period this has resulted in significant business development progress, which the Directors expect to continue. At period end, Group full-time equivalent (FTE) headcount was 76, up from 33 at 31 December 2013.

The adjusted EBITDA loss is in line with expectations at £3.6m, a 21.9% increase on the prior period adjusted EBITDA loss of £3.0m, and this is largely attributable to increased resource costs to expand the business.

One-off finance income of £0.6m arose on conversion of loan notes at the IPO. Finance costs have fallen from £2.1m to £0.3m in the period also due to conversion of loan notes.

The resultant loss on ordinary activities before taxation was £7.0m in the period, versus £6.3m in the prior period.

A reconciliation to EBITDA is shown overleaf:

EBITDA and adjusted EBITDA reconciliation

Year to 31 Dec

2014 Year to 31 Dec

2013

£’000 £’000

Operating loss per accounts (7,450) (4,204)

Add-back:

Depreciation 1,393 1,108

Amortisation 114 108

EBITDA (5,943) (2,988)

Share-based payments charge 1,393 -

One-off bonuses 585 -

One-off costs relating to fundraising activities 322 -

Adjusted EBITDA (3,643) (2,988)

Equity

During the period the Group successfully raised £46.5m (before expenses) in new equity through the completion of an IPO in January followed by a secondary placing in June. On 17 January 2014, CityFibre Infrastructure Holdings plc was admitted to trading on AIM via an IPO, which generated gross proceeds of £16.5m (£14.9m net proceeds). Following this placing there were a total of 52,314,648 ordinary shares in issue. As part of this process, the loan note investments in CityFibre Holdings Limited, a subsidiary of the Company, were hived up into CityFibre Infrastructure Holdings plc. The loan notes, together with accrued interest and applicable discounts, converted into ordinary shares valued at £14.7m at the IPO placing price of 60p per share. On 9 June 2014, the Company generated gross proceeds of £30.0m (£28.7m net proceeds) via the issue of 42,857,142 new ordinary shares at a placing price of 70p per ordinary share. During the period, the Group has issued share options over 15,579,902 shares to employees and management, of which 9,927,527 have been issued to an employee benefit trust by way of a joint share ownership plan. At the end of the period, the total number of ordinary shares in issue amounted to 105,440,863. The Directors believe that the Group’s progress in fundraising activities during the period enables CityFibre to approach the future with a strengthened capital structure as it executes the business plan communicated to the market. Balance Sheet Property, plant and equipment (PPE) is stated after depreciation at £31.8m (2013: £19.3), primarily reflecting in-progress construction in Peterborough, incremental contract growth in York and the legacy footprint, the acquisition of the Coventry MAN network asset and the first phase of the Hull network construction. The £0.8m investment in associated companies reflects the Group’s 33.3% stake in the York FTTH JV company (Bolt Pro Tem Limited), arising from the contribution of a right-of-use over the Group’s York network asset to the JV. The Group provides services to the JV, which are recharged as performed. Acquisition of PPE totalled £14.1m, comprising the £9.2m fair value of the acquired Coventry MAN network and £4.9m of other capital expenditure, largely relating to new projects and incremental contracts. Services over the Coventry MAN network are provided to Coventry City Council over the 15-year contract term. The difference between the fair value of the network and the consideration, of which some was deferred, has been recognised as deferred revenue. After the completion of the IPO, all convertible loan notes were converted into equity, exercising the derivative conversion option included in the loan notes, following an agreed settlement plan with loan note holders. Additionally in January 2014, the fair value of the warrant reserve of £0.7m was discharged by means of cash settlement. At the period end, the Group had an outstanding loan with Citibank of £2.6m, net of unamortised issue costs, secured on certain long-term revenues and assets.

Cashflow Operating cashflow for the period was a net outflow of £3.6m, this includes a working capital benefit of £1.2m and one-off items in respect of bonuses of £0.6m and professional fees in respect of fundraising of £0.3m; otherwise, operating cashflow reflects EBITDA, after taking account of a share-based payments charge of £1.4m. Net proceeds from the IPO and secondary placing were £43.6m. Other principal movements in financing cashflow included a payment of £0.7m to extinguish outstanding warrants, together with £1.1m in repayments, including interest, in respect to the Citibank facility. The Group’s closing cash position at the end of the period was £33.2m, of which £29.0m was on short-term deposit.

Terry Hart

Chief Financial Officer

20 March 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Year Ended 31 December 2014

2014 2013

£’000 £’000

Revenue 3,844 1,874 Cost of sales (568) (365)

Gross profit 3,276 1,509

Total administrative expenses (10,726) (5,713)

OPERATING LOSS (7,450) (4,204)

Finance income 779 1 Finance cost (344) (2,115)

Share of post-tax losses of equity accounted Joint Venture (42) -

LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (7,057) (6,318)

Income tax 31 31

LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME (7,026) (6,287)

Loss per share 2014 2013

Basic and diluted loss per share (£0.09) (£55.60)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2014

2014 2013

Assets £’000 £’000 Non-current assets

Property, plant and equipment 31,778 19,254 Intangible assets 535 325 Investment in Joint Venture 847 -

33,160 19,579

Current assets

Inventory 83 122 Trade and other receivables 3,720 1,677 Investment in short-term deposits 29,000 - Cash and cash equivalents 4,186 286

Total current assets 36,989 2,085

Total assets 70,149 21,664

Equity

Issued capital 1,111 - Share Premium 63,243 389 Warrant reserve - 700

Share warrant reserve 85 - Share-based payments reserve 773 - Merger reserve 331 - Retained Earnings (15,680) (2,054)

Total equity 49,863 (965)

Liabilities

Non-current liabilities

Interest bearing loans and borrowings 1,814 2,447 Deferred revenue 10,083 597 Deferred consideration 415 - Deferred tax 31 62

Total non-current liabilities 12,343 3,106

Current liabilities

Interest bearing loans and borrowings 790 15,729 Deferred revenue 2,023 939 Trade and other payables 5,130 2,855

Total current liabilities 7,943 19,523

Total liabilities 20,286 22,629

Total equity and liabilities 70,149 21,664

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended 31 December 2014

Share capital

Share Premium

Warrant reserve

Share warrant reserve

Shares to be issued

reserve

Share- based

payments reserve

Merger reserve

Retained Earnings

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 January 2013 - - 700 - 382 - - 4,233 5,315

Comprehensive income

Loss and total comprehensive income for the year - - - - - - - (6,287) (6,287)

Transactions with owners

Shares to be issued - - - - 7 - - - 7 Shares issued - 389 - - (389) - - - -

Balance at 31 December 2013 - 389 700 - - - - (2,054) (965)

Balance at 1 January 2014 - 389 700 - - - - (2,054) (965)

Comprehensive income

Loss and total comprehensive income for the year - - - - - - - (7,026) (7,026)

Transactions with owners

New ordinary shares issued 1,050 65,985 - - - - - - 67,035 Issue of shares held by JSOP - - - - - - - (6,600) (6,600) Cost of issuing new ordinary shares - (2,948) - - - - - - (2,948) Share warrant charge - - - 289 - - - - 289 Exercise of share warrants 3 206 - (204) - - - - 5 Share-based payments - - - - - 773 - - 773 Group reconstruction 58 (389) - - - - 331 - - Discharge of warrant reserve - - (700) - - - - - (700)

Balance at 31 December 2014 1,111 63,243 - 85 - 773 331 (15,680) 49,863

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Year Ended 31 December 2014

2014 2013

£’000 £’000

Cash flows from operating activities

Loss before tax (7,057) (6,318)

Amortisation of intangibles 114 108

Share based payments 1,393 7

Finance income (779) (1)

Finance costs 344 2,115

Depreciation 1,393 1,108

Profit on disposal of PPE (62) -

Right of use income (161) -

Decrease/(Increase) in inventory 21 (87)

Increase in receivables (1,946) (857)

Increase in payables 3,146 1,786

Share of loss from associated company 42 -

(3,552) (2,139)

Tax paid - -

Net cash utilised in operating activities (3,552) (2,139)

Cash flows from investing activities

Interest received 31 1

Investment in short-term deposits (29,000)

Acquisition of intangible assets (324) (13)

Acquisition of property, plant and equipment (4,499) (532)

Capitalised staff costs (544) -

Net cash utilised in investing activities (34,336) (544)

Cash flows from financing activities

Proceeds from the issue of share capital 46,523 -

Costs of issuing share capital (2,839) -

Proceeds from issue of loan stock and debentures - 3,645

Repayment of borrowings (940) (568)

Repayment of warrant reserve (700) -

Interest paid (256) (348)

Net cash from financing activities 41,788 2,729

Net increase in cash and cash equivalents 3,900 46

Cash and cash equivalents at beginning of period 286 240

Cash and cash equivalents at end of period 4,186 286

ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are summarised below. They have all been applied consistently throughout the year and preceding period. Basis of preparation The financial information presented in this preliminary announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union. The principal accounting policies adopted in the preparation of the financial information in this preliminary announcement are unchanged from those used in the annual report and accounts for the year ended 31 December 2013 and are consistent with those that the company has applied in its financial statements for the year ended 31 December 2014. The financial information for the years ended 31 December 2013 and 2014 presented in this preliminary announcement does not constitute the company’s statutory accounts for those periods. The financial information for those periods has, however, been derived from the company’s statutory accounts. The company’s Annual Report and Accounts for the year ended 31 December 2013 has been audited and filed with the Registrar of Companies. The company’s Annual Report and Accounts for the year ended 31 December 2014 has been audited and will be filed with the Registrar of Companies in due course. The Independent Auditors' Report on the company’s Annual Report and Accounts for the years ended 31 December 2013 and 2014 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006. Nature of Group CityFibre Infrastructure Holdings plc (the “Company”) is a company registered in England and Wales. The consolidated financial statements for the year ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as the “Group”). Basis of accounting The financial statements of the Company have been prepared on a going concern basis and in accordance with International Financial Reporting Standards (“IFRS”) and their interpretations issued by the International Accounting Standards Board (“IASB”), as adopted by the European Union. These are the Group’s first financial statements. They have also been prepared with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Group has not adopted any Standards or Interpretations in advance of the required implementation dates. It is not expected that adoption of Standards or Interpretations which have been issued by the IASB but are not yet effective will have a material impact on the financial statements. Basis of consolidation The consolidated financial statements incorporate the results of CityFibre Infrastructure Holdings plc and all of its subsidiary undertakings as at 31 December 2014. The results of subsidiary undertakings are included from the date of acquisition. CityFibre Infrastructure Holdings PLC was incorporated on 13 November 2013, and on 9 January 2014 it acquired the issued share capital of CityFibre Holdings Limited by way of a share-for-share exchange. The latter had five wholly owned subsidiaries: CityFibre Networks Limited, Fibrecity Holdings Limited, Gigler Limited, CityFibre Metro Networks Limited and Fibrecity Bournemouth Limited. The

consideration for the acquisition was satisfied by the issue of 115,383 Ordinary Shares in CityFibre Infrastructure Holdings PLC to the shareholders of CityFibre Holdings Limited. The accounting treatment in relation to the addition of CityFibre Infrastructure Holdings plc as a new UK holding Company of the Group falls outside the scope of the IFRS 3 ‘Business Combinations’. The share scheme arrangement constituted a combination of entities under common control as CityFibre Infrastructure Holdings plc, due to all shareholders of CityFibre Holdings Limited being issued shares in the same proportion, and the continuity of ultimate controlling parties. The reconstructed Group was consolidated using merger accounting principles as outlined in Financial Reporting Standard 6 (“FRS”) Acquisitions and Mergers (UK) and treated the reconstructed group as if it had always been in existence. Any difference between the nominal value of shares issued in the share exchange and the book value of the shares obtained is recognized in a merger reserve. The Company has taken advantage of merger relief available under Companies Act 2006 in respect of the share for share exchange as the issuing company has secured more than 90% equity in the other entity. The carrying value of the investment is carried at the nominal value of the shares issued. Joint ventures Joint ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. These consolidated financial statements include the Group’s share of the total recognised gains of a JV using the equity method, from the date that significant influence commenced, based on present ownership interests. Under the equity method, investments in JVs are carried in the Consolidated Statement of Financial Position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the JV, less any impairment in the value of the investment and the Group’s share of any gain on contribution of assets to the JV. Initially, the investment in the JV is recognised at the fair value of the assets contributed and the services provided by the Group to the JV. Subsequently a share of the profits, made on services provided and disposal of property, plant and equipment to the JV, are eliminated against the value of the investment; the share of profits is determined by the Group’s share of ownership of the JV. Revenue Revenue represents network lease sales and installation sales to external customers, sales of internet services to residential customers, and recharge of work performed for the JV at invoiced amounts less value added tax or local taxes on sales. Where revenue arising from installation and connection services is separable from network lease services, these elements are recognised as if they were separate contracts. Network lease revenue is recognised evenly over the period to which the invoicing relates, and is recognised from the date at which the network service becomes available for use by the customer. Installation revenue is recognised on a straight line basis over the period of construction of the asset, from post-contract signature mobilisation to customer handover. Management believes this is the best reflection of the effort required to deliver services to customers. Revenue from internet services provided to residential customers is recognised on a monthly basis, commencing when services are provided. Revenue from work performed for the JV is recognised during the period to which the work related.

The Group has provided the JV with a right-of-use over certain network assets in York; revenue is recognised to the extent that this relates to the provision of services to the JV. The assets contributed under the right-of-use are treated as being disposed of by the Group. All revenue streams are wholly attributable to the principal activity of the group and arise solely within the United Kingdom. Property, plant and equipment Property, plant and equipment are stated at cost, net of depreciation and any provisions for impairment. Where network assets are acquired as part of a contract including a provision of services, the asset is initially recognised at fair value to include the value of these services. Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows: Leasehold property 5 years Network assets 20 years Plant and machinery 5 years Fixtures and fittings 3 years Motor vehicles 3 years Useful economic lives and residual values are assessed annually. Any impairment in value is charged to the statement of comprehensive income. Intangible assets Customer contracts, which have arisen through business combinations, are assessed by reviewing their net present value of future cash flows. Customer contracts are amortised over their useful life, not exceeding six years. Internally generated website costs that are directly attributable to websites controlled by the Group are recognised as intangible assets and the costs are amortised over their useful lives, not exceeding three years. Amortisation is included in general administrative costs in the statement of comprehensive income. Impairment of non-current assets Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable an asset is reviewed for impairment. An asset’s carrying value is written down to its estimated recoverable amount (being the higher of the fair value less costs to sell and value in use) if that is less than the asset’s carrying amount. Inventory Inventory is stated at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis. Inventory includes equipment necessary to install fibre optic networks. Net realisable value is based on estimated selling price less additional costs to completion and disposal. Finance costs Finance costs are charged to profit over the term of the debt so that the amount charged is at a constant rate on the carrying amount. Finance costs include issue costs, which are initially recognised as a reduction in the proceeds of the associated capital instrument. Operating leases

Rentals paid under operating lease commitments are charged to income on a straight line basis over the lease term. Financial liabilities and equity Most of the Group’s financial liabilities, including its trade payables, bank loans and the host debt element of its convertible loans are initially recognised at their fair value, net of any issue costs, and subsequently measured at amortised cost using the effective interest method. All related interest charges on loans are recognised as an expense in ‘finance cost’ in the statement of comprehensive income. The conversion option embedded into the Group’s convertible debt is classified as a financial liability. The conversion option derivative is initially and subsequently measured at its fair value with changes in that fair value recognised in ‘finance income/cost’ in the statement of comprehensive income. Upon conversion of the instrument the embedded derivative, the value of the loan, and any accumulated finance costs are extinguished and converted into share capital and share premium.

Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability. The Group’s ordinary shares are classified as equity instruments. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. Financial assets Trade and other receivables are initially recorded at their fair value and subsequently carried at amortised cost, less provision for impairment.

A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. Bad debts are written off when identified.

Cash and cash equivalents Cash and cash equivalents comprise cash at bank and cash in hand and short-term highly liquid investments with an original maturity of three months or less. Short-term investments Short-term investments are amounts held on cash deposit at financial institutions. Share based payments The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of the grant. The fair value at the grant date is determined using two different models. For share options that include market-based vesting criteria, the Monte Carlo model has been used, with the expense recognised over the expected life of the options. For all other options the Black-Scholes model has been used, with the calculated value expensed over the vesting period. The value of the expense is dependent upon certain key assumptions including the expected future volatility of the Group’s share price at the date of the grant. The Group also issues cash-settled share-based payments to certain employees. The payments are measured at fair value at the date of the grant, and are subsequently revalued at each balance sheet date, using the Monte Carlo model. All goods and services received in exchange for the grant of any share warrants are measured at their fair values. In the absence of information on the fair value of the services provided, the fair value of services received in return for the warrant issued is measured by reference to the fair value of the

warrant issued. The fair value of the warrant was estimated by management using the Black-Scholes model. Taxation Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the date of the statement of financial position. Deferred taxation is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred taxation liabilities are recognised on all taxable temporary differences. Deferred taxation assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred taxation is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted at the statement of financial position date. The carrying value of deferred taxation assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which taxable temporary differences can be utilised. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Pension Costs Contributions to the group’s defined contribution pension scheme are charged to the statement of comprehensive income in the period in which they become payable. Joint Share Ownership Plan (JSOP) As the company is deemed to have control of its JSOP trust, it is treated as a subsidiary and consolidated for the purposes of the consolidated financial statements. The JSOP’s assets (other than investments in the company's shares), liabilities, income and expenses are included on a line-by-line basis in the consolidated financial statements. The ESOP's investment in the company's shares is deducted from equity in the consolidated statement of financial position as if they were treasury shares. Key judgments and sources of estimation uncertainty The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or where assumptions or estimates are significant to the financial statements are detailed below. The Group depreciates the PPE, using the straight-line method, over their estimated useful lives. The estimated useful life reflects management’s estimate of the period that the Group intends to derive future economic benefits from the use of the Group’s PPE. Changes in the expected level of usage and technological developments could affect the useful economic lives of these assets which could then consequentially impact future depreciation charges. The carrying amounts of the Group’s and the Company’s PPE at 31 December 2014 are disclosed in Note 9 to the financial statements.

Installation revenue, which is deemed separately identifiable from network lease revenue, is recognised on a straight line basis over the period of construction of the asset, from post-contract signature mobilisation to customer handover. Installation revenues are a proportion of the total contract value; management assess this and give appropriate consideration to a range of factors in

determining installation revenues on a contract by contract basis. Factors include contract length, technical challenges in delivering the contract and assessment of any associated local economic issues.

The value of network assets acquired from third parties are recorded at fair value. This is assessed with reference to a range of factors, including original cost, market value and services provided over the network. In the current year this relates solely to the Coventry MAN acquisition.

The value of the investment in the JV is calculated based on the market value of an equivalent share in the JV. The value of assets contributed to the JV has been calculated based on the proportion of the network that is to be used by the JV.

Significant customer contracts for network lease sales have been deemed to be service contracts, with revenue recognised as per the revenue recognition policy. Management do not consider the nature of the contracts to be an indefeasible right of use (IRU).