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Interim results Sep 13

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

Interim results for the 6 months ended 30 September 2013

Please click here to read the full RNS announcement

 AdEPT, one of the UK’s leading independent providers of award-winning landline voice and data connectivity telecommunications services, VoIP and mobile networks, announces its results for the 6 months ended 30 September 2013.



  • Profit before tax increased by 19.6% to £1.03 million (2012: £0.86 million)
  • Profit after tax increased by 30% to £0.68 million (2012: £0.52 million)
  • Adjusted EPS increased by 14.2% to 7.47p (2012: 6.54p)
  • Interim dividend doubled to 1.5p per share (2012: 0.75p)
  • Free cash flow increased by 8.3% to £1.70 million (2012: £1.57 million)


  • Gearing down to 38% (2012: 46%)
  • Net debt, after £2.18m acquisition payments, reduced by £0.55 million in the last 12 months to £3.89 million (2012: £4.39 million)
  • Interest costs reduced by 45% to £0.13 million (2012: £0.24 million)

  • EBITDA increased by 6% to £2.09 million (2012: £1.97 million)
  • EBITDA margin increased by 2.6% to 20.6% (2012: 18.0%)


  • Total revenue fell by 7% to £10.2 million (2012: £10.9 million)
  • Cloud-based contact centre solution and non-geographic revenue increased by 33.3% to £0.76 million (2012: £0.57 million)
  • Data connectivity and network revenues increased by 6.0% to £1.41 million (2012: £1.33 million)
  • Revenue from customers taking 3 or more products increased to 45% of total revenue (2012: 42%)

Business review

In the six month period ended 30 September 2013 the Company won a number of new customers within the public sector for which only a part contribution is included within these results.  AdEPT has been successful in gaining new contracts with 6 county councils as a result of its status as sole recommended supplier to local government under the Eastern Shires Procurement Organisation framework for calls, lines, broadband, super-fast broadband (fibre) and SIP trunks.

Following the end of the interim period AdEPT has been awarded its third public sector telecom framework.  The first was for university data connectivity, the second for local government telecoms and AdEPT has now been awarded a telephony services framework by Government Procurement Service, the purchasing arm of the Cabinet Office.  This now gives the company access to central government bodies as well as local government.

Total revenue fell by 7% as a result of continued pressure on fixed line call volumes and retail price pressure following the regulatory price changes on mobile interconnect rates.  However, absolute gross margins for fixed line services were slightly ahead at £3.15 million (September 2012: £3.12 million). This has been achieved through management of wholesale supply contracts combined with the impact of regulatory price changes on mobile interconnect rates and ISDN30 circuit rentals.

Cloud-based contact centre solution and non-geographic revenue has increased by 33% in the six months ended 30 September 2013 compared to the prior period.  This has been achieved by new customers coming on stream combined with the continued development of network and cloud-based solutions for existing customers, such as Monarch Airlines and Cosmos Holidays.

Cross selling into the existing customer base continues to be successful, with revenue from customers taking three or more products increasing to 45% of total revenue (September 2012: 42%).

AdEPT is continuing to successfully make the transition from a traditional fixed line service provider to a complete communications integrator offering best of breed products from all major UK networks. Revenue from data connectivity and network solutions has increased to 14% of total revenue for the six months ended 30 September 2013 (September 2012: 12%).  This growth incorporates a wider data connectivity service offering including 10Gb Optical Spectrum Services data connectivity solutions under the Ja.Net framework at a number of universities and colleges.


Free cash generation has improved during the six months to 30 September 2013 with the Company generating £1.70 million free cash flow (cash generated from operations net of interest) representing an increase of 8% (September 2012: £1.57 million). £1.92 million of available funds has been used to fund the initial consideration for the acquisition of certain trade and assets from Bluebell Telecom Limited on 1 August 2013.  In addition, a further £0.26 million has been used to fund the deferred consideration in relation to the acquisition of certain trade and assets from Expanse (UK) Communications Limited which was completed on 1 May 2012.

Interest costs for the six month period to 30 September 2013 were £0.11 million lower, a fall of 45% from the comparative period.  This improvement is a reflection of the reduced net borrowings and pro-active treasury management.

Net borrowings, after £2.18 million acquisition payments, have been reduced by £0.55 million during the last 12 months, which at 30 September 2013 were £3.89 million (September 2012: £4.39 million).

On 14 October 2013 the Company renewed and extended its bank facilities with Barclays through to October 2016.  This provides the Company with additional facility headroom to enable the Board to continue with its growth strategy of selective acquisitions.


Despite the £2.18 million acquisition payments made in the half year, net debt fell in the last 12 months by £0.55 million.  This resulted in a reduction in gearing to 38% (September 2012: 46%).

Profit before and after tax

Profit before tax has increased by 20% to £1.03 million (September 2012: £0.86 million) arising from the improved operating profit combined with a 45% reduction in interest costs. Profit after tax has increased by 30% to £0.68 million (September 2012: £0.52 million).

Earnings per share

Adjusted (basic) earnings per share has increased 14% to 7.47p for the six months ended 30 September 2013 (2012: 6.54p) as a result of the £0.16 million improvement to profit before tax.


The Directors have declared an interim dividend of 1.50p per Ordinary Share in respect of the results for the six months to 30 September 2013 which is an increase of 100% over the prior period.  This will absorb approximately £0.32 million of shareholders’ funds (September 2012: £0.16 million).  It is proposed by the Directors that this dividend will be paid on 11 April 2014 to shareholders who are on the register of members on the record date of 21 March 2014.  Subject to the financial results for the second half of the financial year, it is the intention of the Company to look to propose a final dividend with the March 2014 final results.

Free cash flow in the six months ended 30 September 2013 was £1.70 million, so there continues to be considerable scope for a progressive future dividend policy.


The focus of the business continues to be on securing new customers through effective marketing of the various telecom frameworks and development of organic sales channels, maintaining underlying profitability and cash flow generation, which will be used to fund dividends and earnings-enhancing acquisitions.


Roger Wilson


29 October 2013



AdEPT Telecom

Roger Wilson, Chairman                        07786 111535

Ian Fishwick, Chief Executive                 01892 550225

John Swaite, Finance Director                01892 550243


Northland Capital Partners Limited

Edward Hutton/Lauren Kettle                  020 7796 8800