Trading update

Alternative Networks plc('the Group' or 'Alternative')

Trading update

The Group's Advanced Solutions business continues to make good progress following the completion of the integration of the acquisitions made in 2014. This has recently been offset by significant ongoing pressures in our mobile business particularly on roaming revenue and profitability arising from a combination of increased network competition and the regulatory headwinds carriers currently face.

It is too early to determine the impact on the results for the full year ending 30 September 2016, however, the Board currently estimate that for the six months ending 31 March 2016, aggregate revenue across the Group is expected to be broadly in line with the same period in the prior year; gross profit is expected to be, in percentage terms, low double digits below the level seen in the same period in the prior year resulting in Adjusted EBITDA also below the first half of FY2015. 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.

Mobile revenue and profitability reductions are being driven by significantly reduced roaming revenues as a result of new global tariffs launched by the carriers. This impact is being seen across the UK mobile market but Alternative has been particularly impacted due to its comparatively larger roaming base. Historically, the Group has generated a large proportion of mobile profits from roaming in both voice and data, particularly from outside of the EU as demonstrated by the comparatively high ARPU.

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 balance of the Group's portfolio - Advanced Solutions and Fixed Voice - continue to trade in line with the Board's expectations. The Group's cash generation remains strong and in line with current guidance the Board currently intends to propose a full year dividend at least 10% above the prior year level moving to 15% in the medium term.

The Group will update further in accordance with its normal practice in April.

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Notes to Editors

Alternative provides IT and telecommunications solutions to businesses, covering the full spectrum of products and services from device to datacentre. Alternative's products and services include: cloud computing, virtualisation, managed hosting, fixed line voice, mobile, systems, IP networks and complex billing software solutions.

The Group possesses close working relationships with most of the world's leading product and service vendors, providing customers with access to the latest technologies and the commercial advantages of choice.

Alternative is aligned to the business outcomes customers desire. Each solution is designed with the customer, with full visibility and control at all times and underpinned by end to end accountability. The Group supports a wide variety of customers, from legal, professional and financial services, healthcare, higher education and multi-national operations, to mission public services, all of which rely on effective and dependable technology.

www.alternativenetworks.com