AdEPT Telecom boosts earnings with acquisitions

Independent telecommunications integrator and managed service provider AdEPT Telecom announced its unaudited results for the six months to 30 September on Tuesday, with total revenue increasing by 19% to £16.5m over the same period last year.

The AIM-traded company’s EBITDA increased by 20% to £3.5m, while its EBITDA margin improved to 21.4% from 21.1%.

It said managed service revenue accounted for 53% of total revenue, with the amount increasing by 53% to £8.8m.

Adjusted earnings per share increased by 12% to 11.1p, while the board lifted the interim dividend by 25% to 3.75p per share.

AdEPT reported an operating cash flow before tax of £3.2m, up from £2.5m, with a reported EBITDA-to-pre-tax cash from operating activities ratio of 98.9%, compared to 89.8% a year ago.

At period end, the company had net debt of £10.8m, up from £7.6m, though this year’s figure included £6.6m in acquisition payments.

“This has been another excellent six months with completion of an earnings enhancing acquisition during the period,” said chairman Roger Wilson, referencing the purchase of Comms Group UK, which completed in May.

“Improved results in all key areas have been achieved from the underlying business combined with a positive contribution from the Comms acquisition completed in the period.”

Wilson said since the end of the interim period, the completion of the CAT Communications acquisition is expected to be earnings accretive from the date of completion and complementary to the existing skill set of the Fleet office to support enterprise customers.

“We continue to be highly cash generative with adequate debt facilities in place to enable the board to continue to identify earnings-enhancing acquisitions whilst retaining scope for a progressive dividend policy.”