TSTR.L Regulatory News (TSTR)

19 Jan 2005 07:00

Envesta Telecom PLC19 January 2005 Embargoed until: 07.00 a.m. 19 January 2005 ENVESTA TELECOM GROUP ACQUIRES CONTRACT AND CUSTOMER BASE FROM THE AIRTIME GROUP LIMITED FIRST HALF TRADING SHOWS STRONG GROWTH IN REVENUE AND PROFITABILITY Envesta Telecom plc ("Envesta Telecom" or the "Company") the AIM quoted premiuminternational telephony provider today announces that its subsidiary SevenTelecom, yesterday completed the acquisition of customer contracts from TheAirtime Group Limited which trades in the UK as World Telecom, a subsidiary ofCANISP Plc. The customer contracts acquired currently generate revenues in excess of£1million per annum at significant gross margin and the expected consideration,which is payable in cash, will be in the order of £340,000 dependant onperformance of the customer contracts in the first 6 months following theacquisition. The acquisition brings to the Company significant multinational corporatecustomers from a number of industry sectors, including banking and finance.Customers will be migrated to the Seven Telecom infrastructure during asix-month migration plan. Commenting on the acquisition, Kevin Jauncey, Executive Chairman of EnvestaTelecom stated "This is an exciting deal for Envesta Telecom as it bringsadditional substantial gross margin with little or no additional operating costas services will be run using existing systems and infrastructure. It alsobrings a customer base of significant value and profile which will complementour existing wholesale business." Trading Update Envesta is pleased to announce that trading for the six months ended 31stDecember 2004, will show significant improvement on the same period last year. The Company has experienced continued high growth throughout the period, inparticular during Christmas and New Year, achieving record levels of revenue forDecember. This has contributed to an increase in revenue of more than 70% forthe first half compared to the same period last year. More importantly, grossmargin contribution is up over 120%, reflecting the Company's concentration onhigher quality and higher value business streams. This greater margincontribution combined with an increase in the efficiency of its specialisttelephony infrastructure has resulted in the Company experiencing significantnet profit growth, as operating costs have not increased in line with revenues. Un-audited like-for-like comparisons show that revenue for the period was inexcess of £9m compared to £5.24m for the same period last year. Kevin Jauncey, commented, "In addition to the acquisition, we plan to build onthe continuing good performance in the second half and the revised strategicroadmap for Envesta, which includes a significant product launch in earlyFebruary. The new product offering will introduce a mass market service thatfurther maximises utilisation of our infrastructure by bringing on board moretraffic at times of the day when capacity is spare. It also introduces a retailrevenue stream to complement the existing wholesale business." "Details of our revised strategy will be outlined in our interim results inMarch. In the meantime the Company will continue to explore alternatives toorganic growth to further build the business." For further information please contact: Kevin Jauncey, ChairmanKevin McGovern, Finance DirectorEnvesta Telecom PlcTel: 0870 767 7778kevin.mcgovern@envestatelecom.comKevin.jauncey@envestatelecom.com Simon Hudson/Katy PrattTavistock CommunicationsTel: 020 7920 3150kpratt@tavistock.co.uk Notes to Editors Envesta Telecom plc is an AIM listed premium quality alternative telephonyprovider specialising in the provision of high quality international telephonyconnections through its wholly owned subsidiary Seven Telecom. With call qualityin the UK now taken for granted, the same quality is expected when routing callsaround the world, especially where more complex services are required. Headquartered in London, Envesta owns state of the art infrastructureinterconnected with worldwide Tier One carriers such as British Telecom and TSystems. Significant capital investment in Voice over Internet Protocol,("VoIP") technology where appropriate, has expanded Envesta's technicalcapabilities, opening up new routes to Africa and Asia at greater margins to theCompany. This, along with some of the most sophisticated monitoring capabilityin the industry, means that Seven Telecom is able to closely monitor and controlthe business to achieve maximum efficiency and effectiveness. This information is provided by RNS The company news service from the London Stock Exchange