ADT.L Regulatory News (ADT)

24 Nov 2006 08:09

AdEPT Telecom plc24 November 2006 24 November 2006 AdEPT Telecom ("AdEPT" or "the Company") Trading Update Given the recent fall in its share price AdEPT provides the following tradingupdate for the six months to 30 September 2006. During this period the Companyhas completed 1 acquisition of a fixed line reseller and has recordedsignificant 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 ofincreased competition particularly as a result of free broadband offers andpackaging of fixed line with mobile. This has led to higher levels of customerchurn which has impacted the rate at which the Company's profitability isgrowing. As a result the Group's results for the full year will be below currentmarket expectations. The competitive environment has had an impact on theGroup's short term profitability but it is important to emphasise that theCompany continues to maintain a higher than industry average EBITA profit marginof 13% compared to industry average of 8.8%. The Company has responded to market conditions by expanding the management andmarketing team to lead the changes necessary to counteract the current churnrate. These actions have increased the Group's cost base but they will supportthe long term objectives of the Company by broadening the product range andreducing churn. In addition, the acquisition made during the period has beenearnings enhancing and is completely integrated. Roger Wilson, Chairman of AdEPT, said, "AdEPT remains in a strong position tocontinue to consolidate the very fragmented fixed line reseller market. Ourunderlying performance remains very strong and while results for the full yearmight be below current market expectations, we are still reporting significantincreases on the previous six months. Looking ahead, we have a strong pipelineof potential acquisitions and we believe the Company is well positioned togenerate solid shareholder returns over the medium to long term as we expand ourproduct range to include broadband and mobile." Enquiries +--------------------+------------------------------+------------------+|AdEPT Telecom |Roger Wilson |Tel: 01491 571120 || | | || |Chairman | |+--------------------+------------------------------+------------------+|Cardew Group |Tim Robertson |Tel: 020 7930 0777|| | | || |M: 07900 927650 | || | | || |Shan Shan Willenbrock | |+--------------------+------------------------------+------------------+ Notes for Editors: AdEPT Telecom is a leading non-network, UK telecom company that providesfixed-line calls and line rental to business and residential customers in theUK. AdEPT Telecom is focused on growing the business by way of acquisition andhas a proven M&A track record and an effective integration process. Sinceinception, it has completed and integrated 13 acquisitions, including theacquisition of 10, 000 business customers of Fizz Telecom Limited, which itacquired on 1 June 2006. AdEPT Telecom is listed on the Alternative InvestmentMarket ("AIM") under the ticker symbol ADT.L. This information is provided by RNS The company news service from the London Stock Exchange