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Trading update May 2011

RNS Number : 0005G
AdEPT Telecom plc
05 May 2011

AdEPT Telecom PLC (“AdEPT” or the “Company”)

Trading Update

AdEPT Telecom plc today issues a trading update for the year ended 31 March 2011 ahead of final results which are expected to be announced in early July 2011.

The Company is pleased to announce that, despite the challenging economic conditions in the UK over the past 12 months, underlying EBITDA will be slightly ahead of the previous year, and in line with analysts’ forecasts. Turnover will also be in line with analysts’ forecasts. Net borrowings will be below market expectations.

Since its’ inception in 2003, AdEPT has increased underlying EBITDA for eight consecutive years.

AdEPT has broadened its product range further during the year particularly with regard to data connectivity, which has seen greater than 25% year-on-year revenue growth. Data services, such as Ethernet high speed access (up to 1Gigabit speeds) and MPLS networks, have been added to the product portfolio. We are currently in the process of launching 40Mb fibre broadband utilising BT’s 21st century network upgrade that offers fibre-to-the-cabinet in the street.

AdEPT has launched what we believe to be the UK’s most advanced VoIP for BUSINESS product range, and has built a new National VoIP Demonstration Centre at our headquarters in Tunbridge Wells The service, powered by BT Wholesale, includes 7 different ways of deploying VoIP for businesses. SIP trunking and hosted voice inter-work on a single BT network with dual resilience offered by 2 data centres in London. All VoIP services are managed via a single web portal. The VoIP products offer comprehensive solutions for every size of business: large and small sites as well as homeworkers.

AdEPT has had continued success with new ‘cloud’ or network-based inbound call handling solutions being provided to a number of major customers, including a new contact centre for a major UK airline.

The focus of concentrating on larger customers has continued to be beneficial. The AdEPT Premier Customer division, comprising the 200 largest customers, accounts for approximately one-third of total revenue. Average contract length has been enhanced through an increased focus on providing multi-product solutions.  At March 2011, customers taking 3 or more AdEPT products now account for 28% of monthly revenue (22% in March 2010).

The Company has seen a further reduction in underlying operating costs in the year ended 31 March 2011 due to the operational efficiencies associated with managing larger customers.

A key strength of AdEPT is its consistent, proven ability to generate strong cash flows.  As a result of the Company’s continued focus on underlying profitability and cash conversion, net borrowings have been reduced by £1.85m during the year to £7.36m at 31 March 2011.  This strong level of cash conversion is expected to continue.

Roger Wilson, Non-Executive Chairman of AdEPT Telecom, said: “The improved EBITDA and net debt reduction of £1.85m is underpinned by focus on underlying profitability through improving margins on customer contracts, operational efficiencies and tight credit control.  The further broadening of the product offering, particularly with regard to data connectivity, will ensure that AdEPT can continue to provide complete communication solutions for customers. AdEPT is increasingly seen as one of the UK’s leading COMMS integrators supplying best of breed products from every major UK supplier, tailored to meet customer requirements.”

For more information please contact:

AdEPT Telecom Plc

Roger Wilson, Chairman

Ian Fishwick, Managing Director

John Swaite, Finance Director

 

 

07786 111 535

01892 550 225

01892 550 243

 

Northland Capital Partners Limited

Shane Gallwey

 

020 7796 8823

About AdEPT Telecom plc:

AdEPT Telecom plc is one of the UK’s leading independent providers of voice and data telecommunications solutions.  The Company provides a complete communications portfolio of fixed line calls, line rental, mobile and data connectivity products.  AdEPT’s tailored services are used by thousands of businesses and residential customers across the UK and are brought together through the strategic relationships with tier-1 suppliers such as BT, Cable & Wireless and Carphone Warehouse. The Company employs 46 members of staff at its offices in Tunbridge Wells, Kent.

AdEPT Telecom is listed on the London Stock Exchange (Ticker: ADT). For further information please visit: www.adept-telecom-investorrelations.co.uk