Final Results ending 31 March 2007

AdEPT Telecom plc ("AdEPT" or the "Company") a leading independent provider of telecommunications services for landline calls, line rental and broadband, announces its annual results for the year ended 31 March 2007.

AdEPT delivered strong trading performance with:

Financial Highlights

•Turnover increasing by 63% to £18.8 million driven by the acquisitions made during this year and the previous period:

•EBITA increasing by 34% to £2.3 million:

•Profit before tax increasing by 76% to £0.8 million reflecting our ability to integrate the acquired businesses quickly; and

•120% of EBITA (£2.3m) turned into cash (£2.8m).

Operational Highlights

•Acquired two of our competitors' customer bases.

•Achieved a higher mix of business customers with total business revenue up from 67% at March 2006 to 87% this year, increasing stability of overall customer base.

•Launching a wide range of new products aimed at small businesses, including broadband to create new revenue streams and reduce the propensity to churn.

•79% (up from 70%: March 2006) of business customers take line rental.

Commenting upon these results Chairman Roger Wilson said:

"I am pleased to present an excellent set of results. AdEPT has delivered continued growth in revenues and profitability. We have been successful in delivering on our strategy and continue to make significant progress in increasing and stabilising our customer base. In addition, we are in the process of launching a wider range of products including broadband which will create new revenue streams."

Chairman's Statement

It is with great pleasure that I announce our annual results. Revenue in 2007 increased by 63% to £18.8m (2006: £11.5m) with growth derived from the two acquisitions completed during the year. There was a substantial change in the customer base and as a result, 87% of revenue was derived from business customers compared to 67% in 2006. The introduction of line rental in March 2005 has had a marked impact and now represents about 22% of our total revenue.

We remain one of the lowest cost operators in the industry. EBITA increased by 34% to £2.3 million (2006: £1.7 million) although EBITA margins decreased (slightly) to 12.3% of revenues as a result of the change in product mix.

Earnings per share increased by 3% to 7.18p per share (2006: 6.97p). Cashflow was strong as the Company benefits from an excellent operating cash model, with net funds increasing by £0.7m in the year to £1.3m at year end (2006: £0.6m).

Net Debt which comprises cash balances, bank borrowings and deferred consideration, increased by £2.3m to £3.2m (2006: reduced by £1.8m). This was due to the draw down of £4.25m borrowing from the new debt facility with Barclays Bank plc, a reduction in deferred consideration of £1.2m and an increase in cash of £0.7m.

Review of Operations

The business was established to be a consolidator of the highly fragmented UK fixed line reseller sector which is estimated to include approximately 1,000 mostly smaller telecom businesses. To date AdEPT has acquired 14 competitors and /or their customer bases of which the two listed below were completed in the period under review:

June 2006 Fizz Telecom Limited ("Fizz Telecom")

October 2006 Worldwide Telecom Limited

A critical part of our acquisition strategy is the ability to integrate the acquired customer bases into AdEPT's systems within 6 weeks. Both of the acquisitions referred to above were integrated within this timeframe. Rapid integration into AdEPT's automated back office systems significantly enhances the profitability of the acquired customer bases.

We are fast achieving our strategic aim of making our customer base more stable by moving away from lower-spending, higher churn residential customers to focus on small business customers. In the year to 31 March 2007, 87% of group revenues were derived from business customers compared to 67% in the prior period. This reversal of customer focus has been driven by the recent acquisitions all of which have been focused on business customers.

At the half year we reported that we had seen an increase in churn after the launch of "free broadband" in the UK. We are pleased to report that churn has now reduced from its peak last year and the hard work of our customer service and retention teams is bearing fruit.

We are now in the process of launching a wider range of products aimed at the small business market. These include broadband with speeds of up to 8Mb and 24Mb and remote IT support services. We will continue to look at options to enter the mobile market. The Board believes that increasing the range of products and services on offer, and encouraging customers to take larger "bundles" of products, will create additional opportunities for new revenue streams, while making customers increasingly "sticky" and reducing their propensity to churn.

Around 79% of our business customers now take line rental (up from 70%: March 2006) and this has the impact of both increasing revenue and reducing churn as customers are tied in on long-term contracts. Growing line rental revenues has been a key objective and we are delighted to report line rental revenues increased 315% to £4.2 million compared to £1.3m in the prior year.

Employees

As a company we are immensely proud of the track record we have created in a relatively short period of time. Our success is a result of the efforts of all our employees and on behalf of the Board I would like to take this opportunity to thank them for all their hard work.

Outlook

AdEPT has now reached a size where scope exists to generate increasing revenues organically to complement growth through acquisition. Following the completion of the second Fizz Telecom acquisition the Company now has over 20,000 business customers, which provides significant opportunities to cross-sell additional products. AdEPT now possesses an enhanced set of products and services for small and medium-sized businesses which are attractive to our core customer base.

The business focus for this coming year is therefore to increase organic sales and customer retention to achieve a stable business which can then progress into positive organic growth.

We will therefore invest more in our organic sales channels and complement this with continued investment in retention activities to retain more customers and upsell more of our products. We believe the launch of our broader product portfolio also makes it easier for the company to strengthen its existing indirect distribution channel and recruit new dealers, which will further support increased sales.

The Board is not declaring a dividend for this financial year and will instead reinvest the surplus funds in the business.

Whilst increasing our focus on net organic growth, AdEPT will continue its strategy of acquiring businesses where they add value, enhance earnings per share and do not exceed sensible levels of gearing. The current financial year has started well with the second part of the Fizz Telecom customer base being acquired in June 2007. This gives us another 5,000+ customers. The first part of the Fizz Telecom customer base was acquired in June 2006.

Roger Wilson

Chairman

29th June 2007

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