Half-year revenues slipped a little at telecoms and IT services provider Colt (COLT) - led by a fairly big fall in voice-related revenue. Moreover, after adjusting for a €1.1m (£0.95m) foreign exchange loss, depreciation, and various exceptionals, and half-year cash profit fell 2.3 per cent to €158m.
But Colt's business restructuring plan, which was launched in May 2012, is showing some positive effects - although possibly not as much as may have been hoped for. For example, data revenue grew 1.8 per cent year on year, on a constant currency basis, with growth in new product offerings outweighing a decline in sales of legacy products. Data remains the group's biggest business, having generated 51 per cent of group sales in the period. Moreover, the managed services unit - which accounts for about 14 per cent of group revenue - grew sales by 8.3 per cent on a constant currency basis. Still, the group's voice operation (35 per cent of group revenue) saw constant currency sales slump 5.7 per cent - principally reflecting regulatory driven price declines.
Amidst a tough economic backdrop, management sounds cautious about the outlook, too - full-year constant currency revenue growth is expected, but investment spend should put second-half margins under pressure. Deutsche Bank expects full-year adjusted pre-tax profit of €36m, giving adjusted EPS of 4¢ (from €62m and 7¢ in 2012).
COLT (COLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 105p | MARKET VALUE: | £938m | |
| TOUCH: | 103-105p | 12-MONTH HIGH: | 136p | LOW: 92p |
| DIVIDEND YIELD: | nil | PE RATIO: | 122 | |
| NET ASSET VALUE: | 165¢ | NET CASH: | €220m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 798 | 33.2 | 4.00 | nil |
| 2013 | 789 | 16.7 | 2.00 | nil |
| % change | -1 | -50 | -50 | - |
£1=€1.16 | ||||
