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Interim Results Sep 09

AdEPT Telecom Plc 

(“AdEPT” or the “Company”)

 Interim results for the 6 months ended 30 September 2009

AdEPT, a leading independent provider of award-winning telecommunications services for landline calls, line rental, mobile and data connectivity, announces its results for the 6 months ended 30 September 2009.



  • Underlying EBITA increased by 4.5% to £1.8 million (2008: £1.7 million)
  • Underlying operating profit before non-recurring costs, depreciation and amortisation increased to £1.9 million (2008: £1.8 million)
  • Underlying EBITDA margin increased to 14.5% (2008: 12.5%)
  • Gross margin increased to 37.0% (2008: 35.6%)
  • Free cash flow of £0.9 million generated, of which £0.3 million absorbed by one-off restructuring costs
  • Net debt reduced by £0.6 million to £10.2 million (March 2009: £10.8 million)
  • Reported operating profit increased by £0.5 million to £0.4 million (2008: loss of £0.1 million)


  • Fixed fee revenues increased to 47.1% of total revenue (2008: 41.7%)
  • Data product revenues increased by 62.5% to £0.5 million (2008: £0.3 million)
  • Customer cash collection periods reduced to 29 days (2008: 32 days)
  • Bad debt charges more than halved at £146,000 (2008: £339,000)
  • Underlying operating costs reduced to 22.6% of revenue (2008: 23.0%)

Chairman’s Statement

We are concentrating on improving profitability to generate cash and pay down our debt as soon as practical.  We are pleased to report that underlying EBITDA is now one of the highest in our sector at 14.5%, through our focus on improving margins on customer contracts, operational efficiencies and tighter credit control.  Despite the challenging economic conditions the Company has continued to be highly cash generative, with £0.9 million of free cash flow, funding £0.3 million of restructuring costs and £0.6 million reduction in net debt.

Our drive to improve margins on customer contracts has seen gross margins increase from 35.6% to 37.0%. We continue to focus on larger customers and average spend per customer has increased by 5.5%.

Strong cost control has resulted in operating expenditures falling from 23.0% of revenue at September 2008 to 22.6% in the current period.

Lower economic activity has been reflected in reduced call volumes. In addition, non paying customers have been disconnected as part of our drive to reduce bad debt and we are pleased to report that bad debt provisions have been more than halved compared to the same period last year, £146,000 compared to £339,000.  In March 2009 we reported that debtor days had been reduced from 53 days at March 2008 to 34 days at March 2009; the first half of the year has seen further progress with debtor days now reduced to 29 days at September 2009.

Business review

We have now completed the roll-out of a 3,000+ site data network and this is reflected in the 62.5% increase in data revenues.  Since the end of the period we have been awarded a contract to install another 800+ sites.

We firmly believe in increasing the number of products sold to each customer and our concentration on cross-sell has seen the proportion of our revenue generated by customers taking three of our products rise from 8.0% last year to 13.3% in this period.

Our exposure to variable call volumes has been reduced with the proportion of revenue generated from fixed monthly fees increasing from 41.7% to 47.1% year-on-year.


The past year has seen a highly challenging economic environment in which the Company has rightly focussed on efficiency improvement and continued debt reduction, therefore the Company will be in a stronger position when the economic recovery gets under way.

Finally, I would like to offer my sincere appreciation to our customers, our staff and our business partners for their commitment and support to AdEPT and I look forward to continuing to work together with them in the future.

Roger Wilson

17 November 2009



AdEPT Telecom

Roger Wilson, Chairman             07786 111535

Ian Fishwick, Managing Director   01892 550225

John Swaite, Finance Director      01892 550243


Astaire Securities

Shane Gallwey                          020 7448 4400