Highlights:
- Total revenue up 49% to £263.2m (H1 06 £176.8m)
- Revenue for continuing operations up 58% to £260.0m (H1 06 £164.4m)
- Total gross profit margin of 17.3% (H1 06 17.4%)
- Gross profit margin for continuing operations improved to 17.1% (H1 06 16.3%)
- Total operating loss of £7.0m (H1 06 £5.7m)
- Operating loss for continuing operations of £7.3m (H1 06 £6.9m)
- Profit for the period of £24.3m including post-tax gain on sale of Demon Netherlands
- Net debt of £3.5m (H1 06 £30.1m) with net gearing of less than 1%
William Allan, Chief Executive said: "This has been a strong start to the financial year. Our primary focus this year is the integration of the two acquisitions which are proceeding ahead of plan and achieving greater synergy savings for less cost than we had originally expected. The adoption of next-generation services continues and is expected to show increased momentum in the second half.
Our ability to manage large and complex managed solutions contracts increases each year as demonstrated by our recent announcements. Our preferred supplier status for HSBC and The Highland Council has been followed by a new contract with Dumfries & Galloway and Borders Councils. In total these are expected to contribute in excess of £150 million of new revenues over the next seven years. No revenues or earnings have been recognised in the first half of this financial year and we expect this new business to start making a small contribution to growth in the second half.
I am encouraged by our underlying EBITDA. Despite the net losses from Your Communications and Legend Communications at the start of the year and the reduction in profits from the disposal of Demon Netherlands and the Contact Centre, together amounting to some negative £4.9 million, growth from new business and integration efficiencies more than compensated for these losses demonstrating the fundamental strengths of our company.
I am pleased by our ability to integrate acquisitions and grow new business with a stronger revenue mix than before."