Alternative Networks Plc : Pre Close Trading Update
03/30/2012| 02:39am US/Eastern
30 March 2012
Alternative Networks plc
Pre Close Trading Update
Alternative Networks plc ('the Group')
the UK business communications service
provider, today announces a pre close trading update
for the six months period ended 31 March 2012.
Trading for the year has been robust, with continued
high levels of cash generation and strengthening gross
margins across the group.
Mobile network services growth has been encouraging
with an overall approximate 5% comparative increase in gross
profits achieved in the first 5 months of the financial year.
The Group has continued to make good progress in winning
market share and the total number of mobile subscribers has
grown organically by approximately 8% year on year, with more
than 70,000 subscribers at the end of March 2012. In
line with trends reported by the major mobile network
operators, since late December 2011, the average spend of
customers ('ARPU') has remained under pressure, with
lower volumes from roaming and on-network data usage. More
positively, recent months have shown some signs of recovery
towards previous levels.
Fixed line network services trading has been stable and
broadly in line with expectations. The transition to SIP,
resulting in reduced line rental revenues, and the impact of
lower mobile termination rates have each continued to impact
opportunities for growth. Nonetheless, in the first 5
months of the financial year, gross profits were consistent
with last year's performance.
Advanced Solutions started the year well, although in a
challenging economic environment, the placing of certain
orders has taken slightly longer than in the previous year.
The Group still expects to see revenue and profits growth
from Advanced Solutions in the current year.
Portal and billing services
AKJ continues to trade well and recently contracted
with one of its major customers to host managed billing and
provisioning services in a new datacentre, worth £0.5m over
Investment in the Portal and progress in its
development is in line with the Board's expectations. In
December, the Mobile management release was deployed and
significant progress has been made on the advanced reporting
and online ordering modules. Major customer wins on the back
of recent development of the Portal include the mobile fleet
Cash flow remains strong. Net cash balances at 31 March
2012 are expected to be approximately £13m, up from £10.9m at
30 September 2011. This is after paying out £3.2m final
dividend. The Scalable earn out will be paid in the
second half of the year.
The Board remain committed to its progressive dividend
policy and intend to propose a full year net dividend of 11
pence for the full year ending 30 September 2012 (2011:
Going forward, the Board intend to increase the total
annual dividend by not less than 10% in each of the years in
2013 and 2014, thereby extending our previous guidance by a
The results for the half year ended 31 March 2012 are
expected to be released on 12 June 2012.
James Murray, Chief Executive Officer
Edward Spurrier, Chief Financial Officer
Investec Bank plc
020 7861 3112 / 07802 442
This press release was issued by Alternative Networks plc and was initially posted at http://production.investis.com/altnet/rns/rnsitem?id=19993410 . It was distributed, unedited and unaltered, by noodls on 2012-03-30 08:33:18 AM. The issuer is solely responsible for the accuracy of the information contained therein.