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[July 08, 2014]
AdEPT Telecom Raises Dividend As Pretax Profit Rises Modestly
(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - AdEPT Telecom raised its total dividend for the year to end-March, as it saw pretax profit rise slightly despite recording declining traditional fixed line revenues.
The company proposed a total dividend of 3.0 pence, up from 1.50 pence in the previous year, and expressed confidence that its underlying profitability and cash generation will support a progressive dividend policy going forward.
The telecommunications company posted a pretax profit of GBP1.8 million, up from GBP1.6 million, as revenue declined to GBP20.9 million from GBP21.0 million, although this was offset by lower finance costs. The company's finance costs included a credit of GBP60,000 in the year relating to a movement in the fair value of an interest rate swap.
The decline in revenue was primarily due to a decline in fixed line revenues, which AdEPT said had been driven by regulation from OFCOM, the UK competition authority and regulator for the UK communications industries, which had reduced call spend from landline to mobile networks. Additionally, call volumes also declined, as users continued to move towards email and mobile based telephony, said AdEPT.
The company has continued to shift its product mix away from fixed line, broadening towards data and broadband product revenues.
Data and broadband revenues were up 26.9% to GBP3.3 million as it continued to add new customers and cross selling into its existing customer base.
AdEPT said it had remained focused on its organic sales efforts to chase and retain larger customers, whilst using an acquisitive strategy for smaller business customers. Its 10 largest customers accounted for 13.8% of its total revenues, it said, compared to 15.3% in 2013.
The company said it would continue to develop its organic sales through the coming year, and will focus on maintaining profitability and cash flow generation to reduce net borrowings and potentially make acquisitions.
Shares in AdEPT were trading up 5.1% at 132.90 pence Tuesday morning.
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