Alternative Networks plc Trading Update (8756K)
September 27 2016 - 2:01AM
UK Regulatory
TIDMAN.
RNS Number : 8756K
Alternative Networks plc
27 September 2016
27 September 2016
Alternative Networks plc
('the Group' or 'Alternative')
Trading update
Alternative Networks plc ("the Group"), the UK business IT and
communications service provider, today issues the following
pre-close trading update for the year ending 30 September 2016. The
highlights were:
-- Advanced Solutions' new business performance was lower over
the summer following the United Kingdom's European Union membership
referendum. Reassuringly, new business performance recovered well
in August and September and the Group has a robust pipeline for the
coming financial year, but some project completions will be delayed
beyond the year end;
-- Mobile underlying performance has stabilised, and with the
actions taken to offset the impact of new tariffs on roaming rates,
a higher gross margin has been attained in the second half;
-- Strong levels of operating cash conversion continued in the financial year; and
-- As indicated with the interim results, the Board remains
committed to paying a final dividend no less than 10% up year on
year
The Board now expect an Adjusted EBITDA* for the year ending 30
September 2016 somewhat below management's previous
expectations.
Trading performance
Advanced Solutions
New recurring business has recovered to normal levels late in
the half and the Group has signed some notable contracts with new
and existing clients. As a result, the level of recurring revenue
for the full year is expected to be in line with the prior year.
The level of non-recurring new business has also recovered, but the
delays we experienced have put pressure on project completions in
the fourth quarter of the financial year, such that non-recurring
revenue is expected to be below the levels reported in the prior
financial year.
Mobile
Performance has stabilised following the roaming tariff effects
seen in the first half of the year. We expect revenue in the second
half of the year to be broadly in line with the level seen in the
first half but with improved gross margin levels as a consequence
of actions taken including new carrier arrangements, resulting in
improved gross profits and margins. ARPU performance is expected to
be broadly in line with the first half.
Fixed Voice
The overall performance of Fixed Voice was in line with both the
market and our expectations. Line rental revenues continue to
decrease in line with recent trends and we have seen improved
margins with new commercial agreements.
Group
Trading in the financial year ending 30 September 2016 has been
impacted by two unforeseen events, being the mobile roaming tariff
reset and the uncertainty caused by the referendum. As the
referendum is still relatively recent, the potential longer term
impact on the Group's future trading performance is unclear.
However, the Group remains in a strong financial position with
recurring revenues comprising over 75% of sales, and continued
robust cash generation which supports the progressive dividend
policy.
Mark Quartermaine, CEO, said:
"We are disappointed to have seen business uncertainty over the
summer in the wake of the EU referendum impact our Advanced
Solutions business, but the pick-up in new business after the
summer reassures us that our business remains well positioned to
benefit from long term trends. We will update the market in more
detail at the time of our full year results."
Preliminary Results
The results for the full year ending 30 September 2016 are
expected to be announced on Thursday 8 December 2016.
*Adjusted EBITDA is stated before intangible asset amortisation
excluding software, exceptional items and share based payments
Enquiries:
Alternative
Mark Quartermaine, Chief Executive
Officer
Gavin Griggs, Chief Financial
Officer 0870 190 7444
Investec Bank PLC - Nominated
Adviser and Joint Broker Patrick
Robb / Carlton Nelson / Andrew
Pinder 020 7597 5970
finnCap Limited - Joint Broker
Stuart Andrews 020 7220 0565
Bell Pottinger
Elly Williamson / Anna Legge 020 3772 2500
Notes to Editors
Alternative provides IT and telecommunications solutions to
businesses, covering the full spectrum of products and services
from device to datacentre. Alternative's products and services
include: cloud computing, virtualisation, managed hosting, fixed
line voice, mobile, systems, IP networks and complex billing
software solutions.
The Group possesses close working relationships with most of the
world's leading product and service vendors, providing customers
with access to the latest technologies and the commercial
advantages of choice.
Alternative is aligned to the business outcomes customers'
desire. Each solution is designed with the customer, with full
visibility and control at all times and underpinned by end to end
accountability. The Group supports a wide variety of customers,
from legal, professional and financial services, healthcare, higher
education and multi-national operations, to mission public
services, all of which rely on effective and dependable
technology.
www.alternativenetworks.com
This information is provided by RNS
The company news service from the London Stock Exchange
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