19th Sep 2006 07:01
Alternative Networks plc19 September 2006 19 September 2006 Alternative Networks plc Pre-period end trading update Alternative Networks plc, (AN.L) the UK business-to-business communicationsreseller, announces that trading in the second half since March 2006 hascontinued in line with market expectations, with both revenue and profit growthgiving confidence for a successful financial year. The drive to focus on larger customers and reduce the number of less profitable,smaller customers, particularly within ICB, is producing results, with a netincrease in the number of customers spending over £1,000 per month. Thecross-selling of products within the existing customer base has produced asteady increase in the percentage of customers taking more than one product,with particular success with the larger customers. Since the beginning of the period, order book momentum has remained encouraging,with some uplift in late summer following the quieter periods of Easter and theWorld Cup in June. Larger contracts have been agreed with a number ofsignificant household names across the entire product offering, in addition to anumber of important contract renewals. Since the early conclusion of the earn-out, the integration of ICB has beencompleted and the final telesales, sales and client management operations havebeen assimilated within the Group. This has involved the reorganising all thesales teams to streamline the management structure, which has allowed the Groupto bring forward the closure of offices in Bracknell and Bristol. These changeswill contribute to further annual cost savings. The three phase investment in the customer management system continues, withsome alteration to timing, which has resulted in some of the associated capitalexpenditure being pushed into the next financial year. As a result of thisinvestment, customers are already benefiting from a CRM system which allows forgreater control, transparency and communication with the Alternative Networksteam. A further update will be provided in the Full Year results in earlyDecember. Mobile The mobile base of the Group has continued to grow well, with ARPU holding firmat £63, and margins remaining solid. The Group remains on track to hit itstarget of 40,000 connections for the year end, up from 37,589 at March 2006.The reduction of ICB's zero usage customers has increased the level of churnduring the period, but is expected to have a positive effect on ARPU and marginsgoing forward. Fixed Line Trading in the fixed line network services products remains competitive,although more recently we have seen some larger contract wins. Margins havestabilised, showing a slight uplift during July and August, despite themargin-dilutive effect of increased Wholesale Line Rental sales. Advanced Solutions Advanced Solutions margins were up in the period due to successful negotiationswith suppliers, reducing the ongoing cost base. The Group has been in advanceddiscussions with a number of suppliers over their Local Loop Unbundlingprogrammes, and will provide an update on the preferred supplier in the fullyear results in December 2006. We have had some success following the launch ofa new suite of Inbound Call Solutions which we expect to contribute to revenuesgoing into 2007. James Murray, Chief Executive Officer of Alternative Networks, said, "Trading over the last few months has been solid and we are on track to meet theBoard's expectations for the full year. We have integrated ICB into the widergroup, signed a number of significant deals and strengthened our productoffering. The continual improvement to the customer base has led to a highernumber of larger customers, and the cross-strategy selling continues to raisethe number of customers taking multiple products. "With its network agnostic, broad product offering, the Group is well placed toexploit the gradual shift to convergence in the provision of mobile and fixedcommunications services for larger SME and smaller corporate customers. Byfocusing on customer service rather than building and maintaining networks, wehave also been able to sustain healthy margins and strong cash generation. Theprogress during the half gives me confidence for the future." -ends- For more information contact: Alternative Networks plc 0870 190 7444James Murray, Chief Executive OfficerEd Spurrier, Chief Financial Officer Financial Dynamics 020 7831 3113Juliet Clarke / Hannah Sloane About Alternative Networks Alternative Networks (ticker: AN.L) is UK business-to-business communicationsreseller. The Group offers a full range of fixed line, mobile, voice and dataproducts. Launched in 1994, Alternative Networks has achieved a track record ofconsistently profitable growth and in February 2005 it listed on the AlternativeInvestment Market. Alternative Networks is a reseller for providers such as BT, Verizon, Cable &Wireless, Avaya, O2 and Vodafone. The Group caters to a broad range oftelecoms needs, including both stand alone products and fully convergedsolutions, for larger SMEs and smaller corporate customers in the UK and itsover 4,000 business customers include clients such as JC Decaux, Channel 4,Miele and Securitas. The Group has grown rapidly over the past 10 years, now employing over 300people, across five UK sites. At the last FY financial results, AlternativeNetworks reported pre-tax profits of £4.3 million on revenues of £46.4 million. For more information please visit: http://www.alternativenetworks.com/ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AN..L