Business-to-business communications group Alternative Networks benefited from a low subscriber churn rate during the period, which helped boost market share. But reported revenues still fell, largely reflecting regulatory changes to mobile roaming rates and a shift in supplier terms. And, while there's a decent yield, the shares aren't that cheaply rated.
The main mobile division saw revenues fall 3 per cent to £19.7m after a change in terms that meant bonus payments from suppliers were no longer paid upfront. However, the divisional gross profit margin did improve by four points to 39 per cent and the number of subscribers increased organically by a decent 9 per cent to 70,795. However, performance wasn't uniform - sales that were relatively more dependent on capital spending were hit by the slowdown in the UK's economy and the group's network integrator unit, Scalable, signed fewer customers in the period and saw sales slip 6 per cent to £9m. Chief executive James Murray said that customer procurement was frequently deferred at the beginning of the year, but that there had been an improvement since the start of April.
Investec Securities expects full-year pre-tax profit of £14.2m, giving EPS of 21.3p (from £13.5m and 20.4p in 2011).
ALTERNATIVE NETWORKS (AN.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 258p | MARKET VALUE: | £125m | |
| TOUCH: | 255-260p | 12-MONTH HIGH: | 315p | LOW: 235p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 70p | NET CASH: | £13.1m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 59.0 | 4.20 | 6.70 | 3.00 |
| 2012 | 57.4 | 5.63 | 9.50 | 4.00 |
| % change | -3 | +34 | +42 | +33 |
Ex-div: 20 Jun Payment: 6 Jul | ||||
