Pipex Reports H1

Pipex reports first half turnover up 86% to £119.2M

September 7, 2006

2 Min Read

STOKE MANDEVILLE, U.K. -- Financial Highlights

Turnover up 86% to £119.2m (H1 2005: £64.1m)
Acquisition of Homecall contributed £43.2m
Gross profit up 58% to £46.4m (H1 2005: £29.3m)
Acquisition of Homecall contributed £13.1m
EBITDA* up 70% to £12.8m (H1 2005: £7.5m)
Profit before tax** doubled to £3.2m (H1 2005: £1.6m)
Free cash flow of £9.5m before freehold property purchases of £7.6m (H1 2005: £5.4m)
Issue of £91.5m convertible bonds
Cash of £37.8m (December 2005: £14.0m) and net debt of £52.2m (December 2005: £27.7m)

* before integration costs and share option costs
** pre-amortisation

Operational Highlights

Acquisition of Homecall in March for £44m:
- Strengthened position in broadband, voice and line rental
- Took PIPEX above 1,000,000 customers<
- Leveraged infrastructure investments and local loop unbundling strategy (LLU)
Increase in customer numbers:
- Broadband and voice up 287% to 832,000
- Hosting up 23% to 316,000
- Domain names increased to 1.5m from 1.2m
ARPUs in the broadband/voice business have increased by 8.7% since the year end
Joint venture with Intel to exploit Pipex Wireless’ WiMAX spectrum licence

Post period end

Launch of “The Hoff” marketing campaign with early indications of a 50% increase in the rate of broadband growth.
Brand awareness for Pipex in UK now at 50%
Acquisition of Bulldog’s broadband customers for £12.5m
- Brings 110,000 customers
- ARPU of £34
- Entered into wholesale agreement with Cable & Wireless
Agreement to acquire Toucan for £24m
- Brings 185,000 customers
- ARPU of £23
- Allows Pipex to offer triple play with mobile
Peter Dubens, Chairman, commented:

“We have seen impressive trading in the first half of 2006, with strong revenue and profit growth. Our WiMAX joint venture with Intel means there are some exciting opportunities for Pipex to exploit during the next few years, while our recent marketing campaign with “The Hoff” has seen early indications of a 50% acceleration in the take-up of broadband.

“With the acquisitions of Homecall, and today Bulldog’s broadband customers, and an agreement to buy Toucan, we have gained even more scale in the broadband and voice market, and, as an enlarged group, Pipex now has the size and credibility to evolve as a leading player in the broader UK telecoms marketplace. I am confident that we can continue this momentum throughout the rest of 2006 and beyond.”

Pipex Communications plc