Business-to-business communications specialist Alternative Networks continued to gain market share, despite the market remaining stagnant. However, the board is confident enough to have raised the dividend ahead of expectations, and chief executive James Murray assures shareholders that the payout will continue to rise by at least 10 per cent until 2013.
The telecoms group continues to benefit from the acquisition of networks integrator, Scalable, which has boosted cross-selling opportunities and lifted market share. Indeed, the mobile subscriber base grew by 10 per cent to 68,207 customers, while the fixed lines and channels subscriber base increased 9 per cent to 87,237. The focus has been on driving growth in customers that spend more than £1,000 a month and 70 per cent of business wins have been in this space, including new clients such as Carillion and Ocado.
Divisionally, growth in advanced solutions and mobile data remains strong, helping to offset ongoing declines in fixed line telephony, although Mr Murray cautions that further market share gains will be required to offset these declines.
Operating margins have also grown to 12.4 per cent, from 12 per cent previously, as a result of renegotiated terms with a supplier, placing the business on course to meet its target of 13 to 15 per cent.
Investec Securities expects current year adjusted EPS of 22.8p (21.6p in 2011).
ALTERNATIVE NETWORKS (AN/) | ||||
|---|---|---|---|---|
| ORD PRICE: | 280p | MARKET VALUE: | £135m | |
| TOUCH: | 273.25-283p | 12-MONTH HIGH: | 315p | LOW:191.5p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 66p | NET CASH: | £10.9m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 72 | 7.60 | 13.0 | 3.3 |
| 2008 | 93 | 8.90 | 14.3 | 14.3 |
| 2009 | 89 | 7.11 | 12.0 | 5.1 |
| 2010** | 96 | 9.24 | 15.7 | 6.1** |
| 2011 | 117 | 9.36 | 15.0 | 10.0 |
| % change | +22 | +1 | -4 | +64 |
Ex-div: 21 Dec Payment: 26 Jan *Includes intangible assets of £28.1m, or 58p a share **Excludes special dividend of 3p in 2010 | ||||
