Business communications company AT Communications Group has published its interim results for the six months ended 30 June 2007.
– Group revenue increased by 168% to £42.7m (2006 H1: £15.9m) with the full impact of the acquisitions made during 2006 was included for the first time.
– Proforma organic revenue growth excluding the acquisitions was 11%.
– Over 60% of this revenue is either based on long term contracts or recurring.
– Underlying operating profit increased by 50% to £3.0m (2006 H1:£2.0m).
– Interest charges increased to £0.7m (2006 H1:£0.2m) primarily as a result of the debt taken on to finance both the acquisitions as well as the increased working capital needs of the business.
A share placing in April raised £1.9m and was followed by a further placing post the end of this period which raised £4.8m. These two injections of equity have strengthened the balance sheet and facilitated investment in working capital.
During the period covered by these results the Group has completed its integration of the 2006 acquisitions and the reorganisation of the Group into three operating divisions: Rocom addresses the small business segment via indirect channels, resellers, retailers / e-tailers; ATC Solutions the medium and large business segment selling direct; and Servassure the large business segment via indirect channels, carriers and integrators, as well as providing services to the other two divisions.
CEO Alex Tupman commented, “I am delighted to report a solid set of results for the period, which has seen significant focus on reorganisation and investment. ATC has fully integrated the acquisitions made in 2006 and via the recent creation of three distinct business divisions, the Group has substantially extended its coverage of the target market for IP-based ICT products and services.
The results for the six months to 30 June 2007 demonstrate a significant step change in the size and scope of our business with turnover increasing by 168% to £42.7m and underlying operating profit reaching £3.0m; an increase of 50% on 2006. These results have been achieved despite significant investment by the Group during the period, including the recruitment of 37 experienced sales staff and 20 new service engineers.
In order to support the enlarged sales and engineering teams and to enhance efficiency across the business, the Group plans to adopt a new IT system. This incorporates an enhanced CRM and financial management system together with a work force management tool, which is expected to facilitate more effective deployment of the Group’s 150 service engineers. This is expected not only to improve margins but also to increase our customer service capacity.
The Group thus now comprises a leading direct solutions integrator, a leading voice and data distributor and an independent network and engineering services business; and can now serve companies from five to 50,000+ employees, directly or indirectly through various routes to market. This is a market leading, comprehensive and highly competitive position, as is evidenced by some of our recent contract wins including Somerfield, Dixons and BT. Those strengths were recently also recognised at the Microscope Awards with ATC Solutions being named as the ‘Networking / Comms Reseller of the Year’.
We have now completed the restructuring of the business and optimised both our routes to market and cross-selling capabilities. We have invested heavily in our direct sales team, with a focus on larger customers and contracts. This investment is generating a strong pipeline both for the second half and beyond, as evidenced by post period end contract wins with BT, for combined maintenance and products, as well as HMV and Relate. I believe our future prospects are excellent.”