The Company is pleased to announce that it expects that underlying EBITDA will be in line with the previous year and ahead of analysts’ forecasts. Turnover is expected to be slightly below analysts’ forecasts but adjusted profit before tax is expected to be significantly ahead of the prior year and ahead of market expectations. The reduction in net borrowings will be ahead of market expectations.
Traditional fixed line network service revenues have been below expectation following the impact of regulation reducing mobile call rates. However improved gross margin percentages have resulted in stable absolute gross margins.
This has been partially offset by 20% growth in revenues generated from ‘cloud’ or network-based inbound call handling solutions and 40% growth in data connectivity revenues. AdEPT has broadened its product range further during the year particularly with regard to data connectivity and next generation products, including MPLS & E-LAN networks, fibre broadband, hosted and cloud telephony. The first revenues from hosted and SIP solutions provided by AdEPT VoIP for Business have been generated during the second half of the year, albeit at a relatively low level.
AdEPT continues to consistently generate strong cash flow. The focus on underlying profitability and cash conversion of operating profit has resulted in a reduction to net borrowings of £2.02m during the year to £5.35m at 31 March 2012.
AdEPT announced a maiden dividend of 0.5p per share in its interim statement, which was paid to shareholders on 20 April 2012. Despite the continuing uncertainty over the general direction of the economy, the Board is confident that continued strong cash generation, and further reductions in the level of debt in future, will support a progressive dividend policy.