The competitive markets Colt operates in have been made even more challenging by the tough economic climate. The 2 per cent decline in revenue looks a fair result against such a backdrop, particularly given the disruption caused by the reorganisation into three business units. This was the most extensive reorganisation in the group's history, according to chief executive Rakesh Bhasin, who expects annualised net cost savings as a result of €20m (£17m).
The revenue loss reflects regulatory price declines in the voice business, including a 50 per cent reduction in German mobile termination rates. Voice revenue declined by 7.7 per cent in the year to €563m. The group expects the pace of regulatory-driven declines to slow this year.
Colt also suffered from a "deferral of decision making" among clients last year, but reports that now it is starting to see such decisions being made. In particular, the group is identifying growing opportunities for outsourcing from large companies, particularly financial institutions, looking to remove costs or limit capital investment.
The decline in voice revenue continued to offset growth in the data and managed services businesses. Data revenue edged just 0.5 per cent higher to €805m, while managed services revenue increased 7.9 per cent to €186m.
JP Morgan Cazenove is forecasting EPS to remain flat this year at 7¢.
| COLT (COLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 100p | MARKET VALUE: | £891m | |
| TOUCH: | 99-100p | 12-MONTH HIGH: | 167p | LOW: 82p |
| DIVIDEND YIELD: | nil | PE RATIO: | 17 | |
| NET ASSET VALUE: | 163¢ | NET CASH: | €284m | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 1.68 | 39.0 | 6.0 | nil |
| 2008 | 1.68 | 72.0 | 11.0 | nil |
| 2009 | 1.62 | 94.7 | 14.0 | nil |
| 2010 | 1.58 | 47.0 | 8.0 | nil |
| 2011 | 1.55 | 72.0 | 7.0 | nil |
| % change | - | +53 | - | - |
£1=€1.182 | ||||
