Lacklustre results from telecoms provider Colt were eclipsed by the announcement of a €201m (£178m) cash call to strengthen the group's balance sheet and provide working capital.
Management also hinted at acquisitions as the group unveiled the 84.5p a share offer, which is fully underwritten by 61 per cent shareholder Fidelity, and suggested that any deals would be in the services arena.
Meanwhile, sales for 2008 were flat year-on-year, as a 4.1 per cent increase in ethernet and managed service sales in the major enterprise division was offset by a 5.5 per cent dip in the small business unit, to €461.7m. Wholesale revenues also slipped by €4.9m to €513m.
But an 8.7 per cent rise in higher margin data revenues to €916m more than cancelled out the 9.3 per cent slip in lower margin voice revenues, which fell to €759m, meaning cash profits climbed 9.6 per cent to €304m.
Management pointed out that the majority of Colt's services are "essential rather than discretionary", but warned that the business outlook for 2009 remains uncertain.
Broker Oriel Securities expects 2009 pre-tax profits of €65m, giving EPS of 10¢ (9¢ in 2008).
COLT TELECOM (COLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 79p | MARKET VALUE: | £585m | |
| TOUCH: | 79-80p | 12-MONTH HIGH: | 178p | LOW: 49p |
| DIVIDEND YIELD: | nil | PE RATIO: | 8 | |
| NET ASSET VALUE: | 138¢ | NET CASH: | €11.4m | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2004* | 1.80 | -162 | -32.0 | nil |
| 2005 | 1.82 | -490 | -97.0 | nil |
| 2006 | 1.80 | -18.8 | -3.00 | nil |
| 2007 | 1.68 | 39.2 | 6.00 | nil |
| 2008 | 1.68 | 71.9 | 11.0 | nil |
| % change | - | +83 | +83 | - |
£1=€1.14 *UK GAAP | ||||
