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Press
Release
RNS
Number:6524M AdEPT Telecom plc
24
November 2006
Trading
Update
Given
the recent fall in its share price AdEPT provides the following
trading update for the six months to 30 September 2006.
During
this period the Company has completed 1 acquisition of a fixed line
reseller and has recorded significant increases in both sales and
profitability. Turnover for the first six months increased by 97%
to £9.47million (2005: £4.81m).. This in turn has generated an
increase in EBITA of 58% to £1.2 million (2005: £0.76m).
However,
the telecommunications market environment has been through a period
of increased competition particularly as a result of free broadband
offers and packaging of fixed line with mobile. This has led to
higher levels of customer churn which has impacted the rate at
which the Company's profitability is growing. As a result the
Group's results for the full year will be below current market
expectations.
The
competitive environment has had an impact on the Group's short term
profitability but it is important to emphasise that the Company
continues to maintain a higher than industry average EBITA profit
margin of 13% compared to industry average of 8.8%.
The
Company has responded to market conditions by expanding the
management and marketing team to lead the changes necessary to
counteract the current churn rate. These actions have increased the
Group's cost base but they will support the long term objectives of
the Company by broadening the product range and reducing churn. In
addition, the acquisition made during the period has been earnings
enhancing and is completely integrated.
Roger
Wilson, Chairman of AdEPT, said, "AdEPT remains in a strong
position to continue to consolidate the very fragmented fixed line
reseller market. Our underlying performance remains very strong and
while results for the full year might be below current market
expectations, we are still reporting significant increases on the
previous six months. Looking ahead, we have a strong pipeline of
potential acquisitions and we believe the Company is well
positioned to generate solid shareholder returns over the medium to
long term as we expand our product range to include broadband and
mobile." | 