24th Feb 2016 17:32
LONDON (Alliance News) - Alternative Networks PLC on Wednesday warned on profit for the first half of its financial year following difficulties in the mobile business due to regulatory headwinds and increased network competition.
The IT and telecoms provider said that while it is too early to determine the outcome of its results for the full year ending September 30, the board estimates that gross profit in the first half ending March 31 will be low double digits, in percentage terms, below the level seen in the first half of the prior year.
Adjusted earnings before interest, tax, depreciation and amortisation will also be lower than that made the prior year, while revenue will be broadly in line.
Alternative Networks said good progress in its Advanced Solutions business following the integration of acquisitions has been offset by significant pressures on roaming revenue and profitability in the mobile business. This was caused by a combination of increased network competition and headwinds from new global tariffs.
"Alternative's approach has been to match competitive tariffs to retain customers and the group will continue to invest in the mobile proposition to attract new customers and provide existing customers with a market leading experience," the company said in a statement.
"The group has taken measures to improve profit margins and is considering further mitigating actions that should alleviate some of this impact over the rest of the current financial year and beyond," it added.
Alternative Networks added that its cash generation remains strong and in line with current guidance and that it intends to propose a full-year dividend at least 10% above the prior year, moving to 15% in the medium term.
The Advanced Solutions and Fixed Voice businesses also continue trade in line with the board's expectations, it said.
Shares in Alternative Networks closed up 0.4% at 434.48 pence on Wednesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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