31 October 2013: Colt Group S.A. (London Stock Exchange: COLT) today issued its Interim Management Statement for the three months ended 30 September 2013.

FINANCIAL REVIEW

Group revenue for the quarter amounted to €386.5 million (Q3 ‘12: €390.8 million). The marginal decline in revenue (1.1%) was driven by a fall in Voice revenue due principally to regulatory rate cuts across Europe and the impact of foreign exchange movements on sterling-denominated revenue (€8.1m). This decline was partially offset by growth in Managed Services revenue over Q3 ‘12.

Group EBITDA of €78.0 million (Q3 ‘12: €81.6 million) represented a year on year decline of €3.6 million (4.4%). EBITDA was principally impacted by lower Voice revenue, changes in Voice product mix and lower Data margins from a higher proportion of traffic carried on third party networks. These impacts were partially offset by cost savings as a result of our restructuring program commenced at the end of 2012. Consequently, the EBITDA margin declined to 20.2% (Q3 ’12: 20.9%).
 
Net funds² as at 30 September 2013 amounted to €159.6 million (30 June 2013: €219.7 million). The cash outflow of €60.1 million for the quarter reflects higher capital expenditure due to the completion of the freehold acquisition of a key infrastructure site announced in July (€42m), the timing of supplier payments and restructuring expenditure.  Underlying capital expenditure for the third quarter of 2013 excluding this key site acquisition decreased to €71.2 million (Q3 12: €84.8 million). 

During the quarter new order bookings included three new contract wins of over €1 million annual contracted value (Q3 ’12: 2) and four new contract wins of over €2m TCV (Q3 ’12: 5). The Company continued to further develop its channels to market through completion of several franchise and distributor agreements as well as also successfully deployed 1,000m² of colocation space at its Netherlands data centre facility to serve colocation and disaster recovery needs to the Benelux region.

¹ EBITDA is profit before net finance costs, tax, depreciation, amortisation, foreign exchange and exceptional items
²  Net funds includes deposits classified as current asset investments

Rakesh Bhasin, Chief Executive Officer, said:

“This quarter’s results reflected currency headwinds and regulatory driven rate reductions which continued to drag on headline revenue growth. While underlying progress continues to be made in several areas including development of our managed services business, we continue to experience churn in legacy technologies and smaller customers.  We do, however, continue to invest in our strategic programmes which, combined with product mix, has resulted in pressure on our EBITDA margins.”

Click here to read the full Interim Management Statement.
 

FORWARD LOOKING STATEMENTS

This report contains ‘forward looking statements’ including statements concerning plans, future events or performance and underlying assumptions and other statements which are other than statements of historical fact. Colt Group S.A., ‘the Group’, wishes to caution readers that any such forward looking statements are not guarantees of future performance and certain important factors could in the future affect the Group’s actual results and could cause the Group’s actual results for future periods to differ materially from those expressed in any forward looking statement made by or on behalf of the Group. These include, among others, the following: (i) any adverse change in regulations and technology within the IT services and communications industries, (ii) the Group’s ability to manage its growth, (iii) the nature of the competition that the Group will encounter and wider economic conditions including economic downturns, (iv) unforeseen operational or technical problems and (v) the Group’s ability to raise capital. The Group undertakes no obligation to release publicly the results of any revision to these forward looking statements that may be made to reflect errors or circumstances that occur after the date hereof.

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