Home  |  About Us  |  Press Room  |  2005  |  THUS Group plc Interim results for the six months ended 30 September 2005

2005

Sustained sales growth, sharply reduced losses

Financial highlights

Sustained sales growth, sharply reduced losses Financial highlights

• Group turnover £176.8 million.
• Turnover from continuing operations1 up 5% to £174.5 million.
• EBITDA2 from continuing operations £18.1 million (H1 05 £18.0 million).
• Operating loss in continuing operations reduced 75% to £5.8 million.
• Free cash flow positive3 for fourth consecutive half year at £0.7 million.
• Net debt £30.1 million. Net gearing 9%.
• Bank facility refinanced at £55 million on improved terms and conditions.

Sustained customer growth

• Sustained growth, with new customer contracts and expansion of existing customer relationships compensating for decline in carrier pre-select and legacy narrowband, dial-up Internet access.
• New corporate customer contracts include PA, GNER, Babcock International, SMG, EMAP Radio and Brewin Dolphin.
• New public sector customer contracts include British Waterways, Cheshire County Council, Manchester City Council and Rochdale Metropolitan Borough Council.
• Demon UK broadband customers exceed 100,000, up 44% year on year.

Service innovation

• 20 service innovations and product enhancements, including SIP interconnect enabling carrier class IP telephony.
• THUS service solution for GCap Media wins ‘Communication in Business Most Innovative Networking Project’.
• THUS wins ‘Service Provider Channel Program’ at Channel Network Awards.

1. Excludes Contact centre (sold on 4 August 2004) and Interactive (sold on 7 October 2004)
2. Earnings before interest, tax, depreciation (including impairment), amortisation and gain on sale of discontinued operations (See Note 4 to the Interim Financial Statements)
3. Operating cash flow after capital expenditure and net interest

Commenting on today’s results, Chief Executive, William Allan said:

‘During the first half, THUS has continued to grow and generate cash, with a sharp reduction in operating losses.'

‘Our early investment in a ‘next generation network’ coupled to our continued focus on service, quality and innovation have enabled us to maintain a good rate of growth in new customer contracts, particularly for IP MPLS enabled services, and continued expansion of business with existing customers.'

‘The UK telecommunication market is undergoing a fundamental change from investment in new networks and service capability, and industry consolidation. We believe these changes will benefit the industry and our customers in the longer term but, in the shorter term, we expect aggressive pricing to continue throughout this year.

‘In addition to organic growth, we confirm our intent to explore and capitalise on opportunities from industry consolidation but only if these opportunities create value for our shareholders and accelerate our business plan to generate a return on capital employed.

‘While we believe market conditions will remain challenging, we expect to continue to grow and to generate positive free cash flow for the second half and the full year.’