Operationally Adept is now taking 95% of total revenue from business customers (2007: 91%) and line rental, which is a minimum 12 month contract, now representing 37% of revenue (2007: 29%)
Chairman Roger Wilson commented, "I am pleased to be able to announce a strong set of results for the first half of the year. Our sales revenues have increased by 59% following the acquisition of Telecom Direct Limited ("Telecom Direct"). This acquisition has enabled us to bid for larger, longer term contracts, and in particular to enter the data market at a different level to the one at which we had previously operated.
It positions AdEPT to service larger customers on longer term contracts, providing us with more stable revenues, albeit at somewhat lower margins. The successful integration of the Telecom Direct business had largely been completed on schedule by the first half of the year and yielded the planned cost savings. Consequently the growth in net margin of 34% was matched by a 32% rise in underlying EBITDA.
Customer churn remains under control, at levels slightly below industry averages and new sales are strong. We have continued to develop our dealer channel, which is now one of the most powerful in the sector, and we have consistently grown the level of new sales for the first 9 months of 2008. The Company has strengthened many of its' Key Performance Indicators with Direct Debit customers now representing 69% of sales (2007: 63%) and fixed fee charges (such as line rental or broadband) now representing 42% of revenue (2007: 31%). AdEPT is now one of BT Openreach's 10 largest customers.
All acquisition earn-out payments have been completed and we continue to generate strong free cash flow. The business has no further earn-out payments to make and therefore we consequently expect to pay down our debt more rapidly in future periods."