SECOND QUARTER HIGHLIGHTS
- Turnover up 13.4% to £293.0 million compared to Q2 2002
- Constant currency turnover growth of 4.5% over Q2 2002 and 4% over Q1 2003
- Retail turnover up 18.4% to £171.3 million
- Gross margin before depreciation and exceptional items improved from 29.1% to 33.3%
- EBITDA (1) up 158% to £37.9 million - Capital expenditure £33.8 million
- Profit on bond purchases of £7.2 million
- Cash consumption reduced from £93.8 million to £13.3 million, excluding bond purchases
- Strong liquidity position with cash and liquid resources of £920.5 million
- 1,018 new customers added in Q2 bringing total to 17,334
- Staff levels including temporary and contract workers reduced by 145 during quarter
Commenting on the results for the quarter COLT Telecom Group Chairman Barry Bateman said:
"These results demonstrate COLT's ability to continue to win new business, grow revenues and improve margins in a lacklustre market.
"Our performance reflected our focus on profitable revenue growth and tight management of operating costs and capital expenditure. It reinforces our confidence in achieving our objective of being free cash flow positive during 2005.
"Capital expenditure in the quarter was £33.8 million and we now expect capital expenditure for the year to be between £170 million and £200 million.
"We also continued to improve cash flow, with cash consumption reducing from £93.8 million in the second quarter of 2002 to £13.3 million in the second quarter of this year, excluding bond purchases. Our on-going success in continuing to grow; and ability to win new customers is underpinned by cash and liquid resources of £920.5 million.
Steve Akin, COLT's President and Chief Executive Officer added:
"I am encouraged by our performance. Our success in continuing to grow despite the toughness of the economies in which we operate demonstrates the support we have from our customers and their recognition of COLT's high levels of service and competitive prices.
"Revenues grew by 13.4% to £293.0 million with retail revenues improving by 18.4% and wholesale by 7.1%. We have also improved our revenue mix at the product level with non-switched services accounting for 39.6% of revenues compared with 38.2% in the second quarter of 2002. Gross margin before depreciation and exceptional items improved from 29.1% in the second quarter of 2002 to 33.3% and EBITDA increased by 158% to £37.9 million.
"Our emphasis on deepening our relationships with current customers is reflected in the new business we have won from Oracle. We have continued to develop our preferred supplier relationship with Oracle and as well as providing a range of high bandwidth network services we have been selected as a hosting service provider for Oracle's software outsourcing service. We have also made significant progress in increasing sales with Opodo, a leading pan-European online travel service, Harvey Nash, the recruitment services Group, UBS, the major Swiss bank and Clifford Chance, the law firm, among others.
"Despite the tough conditions in the financial services market we have won a number of new contracts including Bear Stearns, a top ten U.S. investment bank and Banque Pictet. We continue to see good demand for our range of IPVPN services including new contracts with Toyota and Federal Express. We have also made good progress in the Government sector, especially in Italy, having added the Office of the Prime Minister and The Ministry of the Environment as new customers.
"We continue to tightly manage operating costs. SG&A costs were reduced from £60.5 million, 23.4% of revenues, in the second quarter of 2002, to £59.6 million, 20.3% of revenues, in the second quarter of 2003. We have reduced staff numbers by a further 145 during the quarter, including temporary/contract workers, bringing the total to 4,479. We remain on course to reduce staff numbers to approximately 4,300 before the end of the year.
"COLT is one of Europe's best in class telecommunications service companies. Our reputation for first class customer service, our extensive pan-European network coverage and our underlying financial strength leave us well positioned to achieve long term profitable growth."
About COLT Telecom
COLT Telecom Group plc is a leading European provider of business communication services. COLT Telecom has over 16,000 directly connected network services and eBusiness customers and has high bandwidth local networks in 32 European cities in thirteen countries supported by a series of Internet Solution Centres and inter-linked by over 15,000 route kilometre high capacity fibre-optic long distance network. Information about COLT Telecom and its products and services can be found on the web at www.colt.net or www.colt-telecom.nl
For further information, please contact:
Brigitte Buijs
Manager Marketing Communications COLT Telecom Netherlands Telephone : +31 (0)20 888 20 20 e-mail : brigitte.buijs@colt-telecom.nl