Revenues grew by 10% to £271.7M (US$432.8M), with retail revenues improving by 20.7%; EBITDA rose 247% to £34.0M (US$54.2M)

April 24, 2003

3 Min Read

LONDON -- Colt Telecom Group plc (Nasdaq:COLT) (LSE:CTM) HIGHLIGHTS:

  • Turnover up 10% to GBP271.7 million compared to Q1 2002

  • Increase in turnover driven in part by the weakness of the British pound relative to the Euro.

  • Retail turnover up 20.7% to GBP162.8 million

  • Gross margin before depreciation and exceptional items improved from 28.7% to 33.6%

  • EBITDA (1) up 247% to GBP34.0 million

  • Cash consumption reduced from GBP110.7 million to GBP12.4 million, excluding bond purchases

  • Strong liquidity position with cash and liquid resources of GBP954.0 million

  • Directly connected network and eBusiness customers up 23% to 16,316

  • Staff levels including temporary and contract workers reduced by 231 during quarter

Commenting on the results COLT Telecom Group Chairman Barry Bateman said:"The operating environment remains challenging but nonetheless we have made an encouraging start to the year with further improvements in turnover, gross margins and EBITDA."We have also continued to demonstrate our ability to improve cash flow with cash consumption reducing from GBP110.7 million in the first quarter of 2002 to GBP12.4 million in the first quarter of this year, excluding bond purchases. We remain on track to achieve our objective of becoming free cash flow positive during 2005."Cash is an important competitive advantage in today's market and with GBP954.0 million of cash and liquid resources combined with our reputation for first class service our customers see COLT as one of the long term successes of the European telecom sector."Steve Akin, COLT's President and Chief Executive Officer added:"Our performance for the quarter reflected further progress on the achievement of our key priorities of profitable revenue growth and tight management of operating costs and capital expenditure."Revenues grew by 10% to GBP271.7 million with retail revenues improving by 20.7%. At the same time non-switched services accounted for 40.6% of revenues compared with 38.0% in the first quarter of 2002."As well as giving increased emphasis to growing same-customer-sales we also continued to win new customers and amongst the more significant new contract wins was Oracle, the world's largest enterprise software company, which has chosen COLT as one of its preferred pan-European suppliers. We also achieved an important win in Portugal with Banco Investimento Global Services (BIG). Other new customers included ST Microelectronics, the semiconductor company. In the governmental sector we continued to make progress with a new contract with Rome University for whom COLT will provide services up to 1 Gbps connecting 9 buildings. Also in Rome, we have won new contracts with the Ministries of Culture and Environment. In France, both local and central government contracts have been won with Les Hospices Civils de Lyon, Communaute Urbaine de Lyon and Ministere des Affaires Sociales."The improvement in gross margin before depreciation and exceptional items reflects the improvement in revenue mix as well as the actions we have taken to tightly manage operating costs. SG&A costs before exceptional items were reduced from GBP61.0 million in the first quarter of 2002 to GBP57.2 million in the first quarter of 2003. We have reduced staff numbers by a further 231 during the quarter, including temporary/contract workers, bringing the total to 4,624. We remain on course to reduce staff numbers to approximately 4,300 before the end of the year."The major construction phase of our network infrastructure was completed at the beginning of 2002 and we are now concentrating capital investment on winning new business. There was a further reduction in capital expenditure to GBP41.6 million compared with GBP139.1 million in the first quarter last year."While there are no signs of any improvement in the operating environment generally, we expect to make further progress during the second quarter and the year as a whole."Colt Telecom Group plc

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