Colt has reported a solid 11 per cent rise in operating profits to €28.5m (£22.2m) in the first half, but don't be fooled by the doubling of earnings per share. This was mainly helped by a weak euro, as the company reversed a €4.5m currency loss at this stage last year into a €4.7m gain. Colt also benefited from a reduced tax charge, which fell from 23 per cent last year to just 8 per cent in the current period, while a reduction in bad debts also gave the bottom line a boost.
Significant among the operating numbers was a jump from €88m to €122m in carrier voice revenues, as Colt's traffic increased with other telecom companies. At the same time, a decline in demand for older bandwidth products was more than offset by the growth of Ethernet income. Overall, data turnover was marginally up at €408m, while Colt's big bet remains the development of modular data centres. In the half year, capital spending was little changed at €147m and will remain at high levels for some time.
For a European-centred business, it's interesting to note that Colt's top 200 customers remain big information technology spenders – the smaller businesses are retrenching in the face of recession. Broker Deutsche Bank forecasts a rise in full-year revenues from €1.55m to €1.61m, but cautiously expects a €1m fall in pre-tax profits to €71m.
COLT (COLT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 121p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 120.3-121.6p | 12-MONTH HIGH: | 132p | LOW: 84p |
| DIVIDEND YIELD: | na | PE RATIO: | 17 | |
| NET ASSET VALUE: | 168¢* | NETCASH: | €288m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 766 | 21.8 | 2.00 | nil |
| 2012 | 798 | 33.2 | 4.00 | nil |
| % change | +4 | +52 | +100 | - |
*Includes intangible assets of €135m, or 15¢ a share. £1 = €1.2764 | ||||
