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Interim results Sep 14

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

 Interim results for the 6 months ended 30 September 2014

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 2014.


  • Total revenue increased by 11.3% to £11.3 million (2013: £10.2 million)
  • EBITDA increased by 12.7% to £2.36 million (2013: £2.09 million)
  • EBITDA margin increased to 20.8% (2013: 20.6%)
  • Adjusted profit before tax increased by 13.9% to £2.2 million (2013: £1.9 million)
  • Adjusted EPS increased by 12.2% to 8.38p (2013: 7.47p)
  • Interim dividend increased by 50% to 2.25p per share (2013: 1.50p)
  • Free cash flow increased by 29.1% to £2.2 million (2013: £1.7 million)
  • Gearing down to 29% (2013: 38%)
  • Net debt, after £2.1m acquisition payments, reduced by £0.7 million in the last 12 months to £3.2 million (2013: £3.9 million)
  • Next generation services revenue increased by 29.0% to £3.0 million (2013: £2.4 million)

 Business review

Total revenue increased by 11.3% through a combination of organic new contract wins, particularly in the public sector, and acquisitions. 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 next generation services, including data connectivity, network solutions and cloud-based contact centre solutions increased by 29.0% to 26.8% of total revenue for the six months ended 30 September 2014 (September 2013: 23.2%).  The demand for faster data connectivity speeds has continued and this is being achieved through a wider data connectivity service offering, including 10Gb, 40Gb and 100Gb Optical Spectrum Services (OSEA) data connectivity solutions under the Ja.Net framework for universities and colleges.

AdEPT has had continued success in the public sector space during the period winning a number of new contracts with councils within the public sector. Over the last 18 months AdEPT has been successful in gaining new contracts with more than 20 councils as a result of its various public sector framework agreements. In July 2014, the Company renewed the framework agreement under which AdEPT is one of only a small number of companies approved to sell data connectivity and networks to UK universities and colleges. Shortly after the period end, in October 2014, the Eastern Shires Purchasing Organisation awarded AdEPT a two year extension to its sole supplier Telecom Framework to local government for calls, lines, broadband, super-fast broadband (fibre), data connectivity and SIP trunks. AdEPT is also an approved supplier under the Telephony Services Framework by Crown Commercial Service, the purchasing arm of the Cabinet Office. Approved supplier status under these framework agreements gives the Company authority to provide services to both local and central government bodies.


Free cash flow (cash generated from operations after interest) amounted to £2.2 million, representing an increase of 29.1% (September 2013: £1.7 million). £1.8 million of available funds was used to fund the initial cash consideration for the acquisition the issued share capital of Bluecherry Telecom Limited on 8 April 2014. These interim results include a full 6 month contribution from the acquisition of the entire issued share capital of Bluecherry Telecom Limited (further details are included in Note 6). In addition, a further £0.3 million was used to fund part of the deferred consideration in relation to the acquisition of certain trade and assets from Bluebell Telecom Limited which was announced on 6 August 2013.

Net debt and gearing

Net borrowings have been reduced by £0.7 million during the last 12 months, despite £2.1 million acquisition payments. Net borrowings at 30 September 2014 were £3.2 million (September 2013: £3.9 million).

This resulted in a reduction in gearing to 29% (September 2013: 38%).

Profit before and after tax

Adjusted profit before tax (adding back non-cash amortisation) increased by 13.9% to £2.2 million (September 2013: £1.9 million) arising entirely from the improved operating profit. Reported profit after tax increased by 11.9% to £0.8 million (2013: £0.7 million).

Earnings per share

Adjusted (basic) earnings per share has increased 12.2% to 8.38p for the six months ended 30 September 2014 (September 2013: 7.47p) as a result of the £0.27 million increase to EBITDA.


The Directors have declared an interim dividend of 2.25p per Ordinary Share in respect of the year ending 31 March 2015, an increase of 50% over interim dividend for the comparative period (September 2013: 1.50p). This will absorb approximately £0.50 million of shareholders’ funds (September 2013: £0.32 million).  It is proposed by the Directors that this dividend will be paid on 10 April 2015 to shareholders who are on the register of members on the record date of 20 March 2015.  Subject to the audited results for the year ending 31 March 2015, it is the intention of the Board to look to propose a final dividend with the March 2015 final results.

Strong free cash flow generation has continued since the end of the period, so there continues to be considerable scope for the Board to continue its progressive future dividend policy.


This has been an excellent 6 months with improved results in all key areas. We continue to be highly cash generative and there is considerable scope for a progressive dividend policy whilst continuing to identify and integrate earnings-enhancing acquisitions.


Roger Wilson


11 November 2014





AdEPT Telecom

Roger Wilson, Chairman                           07786 111535

Ian Fishwick, Chief Executive                  01892 550225

John Swaite, Finance Director                 01892 550243


Northland Capital Partners Limited     020 7382 1100


Nominated Adviser

Edward Hutton/Lauren Kettle



John Howes/Alice Lane