Colt (COLT) began simplifying its business into a more customer-focused model almost two years ago, yet the situation still looks complicated. Regulator-driven price cuts and adverse currency movements left the telecoms and IT services provider chomping at the bit last year.
Cash profits slumped 4 per cent and its cash pile almost halved, as cost-cutting was offset by shrinking gross profits in Colt's voice and data divisions and a ramp-up in investment. Sales at its communications segment, which provides network infrastructure for carriers and businesses, fell 1 per cent to €951m (£780m). And Colt's ThinkGrid, an IT services and communications platform it acquired in August 2012, has struggled to gain traction.
Still, there were some winners in Colt's stable. It added more than 500 resellers and partners to its communications business in Europe and launched cloud services in nine data centres last year. Moreover, sales at its managed networking services business were up a tenth year-on-year at €218m, although those gains were offset by flagging demand for Colt's older, low bandwidth products as customers shifted towards faster Ethernet options.
Broker Deutsche Bank lowered its full-year profit forecast by 2 per cent, and now expects adjusted EPS of 4¢ this year, rising to 5¢ in 2015.
| COLT (COLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 132p | MARKET VALUE: | £1.2bn | |
| TOUCH: | 132-133p | 12-MONTH HIGH: | 140p | LOW: 94p |
| DIVIDEND YIELD: | nil | PE RATIO: | 40 | |
| NET ASSET VALUE: | 169¢ | NET CASH: | €196m | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 1.62 | 94.7 | 14.0 | nil |
| 2010 | 1.58 | 47.0 | 8.0 | nil |
| 2011 | 1.55 | 72.0 | 7.0 | nil |
| 2012 | 1.59 | 29.5 | 3.0 | nil |
| 2013 | 1.58 | 42.4 | 4.0 | nil |
| % change | -1 | +44 | +33 | - |
£1 = €1.22 | ||||
