Business telecommunications provider Daisy Group Plc (DAY.L) reported Tuesday a pre-tax loss of slightly over GBP 16 million for the fifteen-month period ended March 31, 2010. Separately, the group announced the acquisition of data connectivity and hosted solutions provider MurphX Innovative Solutions Limited for an initial consideration of GBP 4.8 million.
The period witnessed the company's transformation from wireless broadband business to a provider of unified communications.
Loss before tax for the 15 months was GBP 16.17 million. For the prior twelve months ended December 31, 2008, loss before tax was GBP 1.49 million.
"It is difficult to compare reported results for 2010 and 2008 as a result of the significant acquisitions, disposals and restructuring which has occurred during these periods," the company noted.
For the 15 months, loss from discontinued operations was GBP 2.8 million. In the year ended December 2008, discontinued operations contributed profit of GBP 40.83 million.
Loss for the period was GBP 14.02 million or 8.54 pence per share. The prior reporting period had a profit of GBP 39.35 million or 55.44 pence per share.
From the announcement of business transformation on July 1, 2009 to the period end, the Group has acquired seven businesses for a combined consideration of GBP 190.5 million.
The reverse takeover of Daisy Communications Ltd. and Vialtus Solutions Lt. was concluded on July 21, 2009. From August 3, 2009 to March 31, 2010, the Group acquired the trading assets of both AT Communications Group plc and Eurotel, the telecommunications division of Redstone plc, and the entire issued capital of each of Managed Communications Limited and BNS Telecom Group plc for a combined consideration of GBP 56.6 million, inclusive of associated costs.
The company said the acquisitions had delivered annualised run rate synergies of GBP 17 million.
Amortisation of intangible assets in the period totaled GBP 20.5 million, relating primarily to the customer relationships acquired from Daisy, Vialtus, ATC, Eurotel, Redstone, BNS and MCL.
Net exceptional costs of GBP 5.8 million for the 15-month period comprise rationalisation and redundancy costs incurred as part of the Group's business integration programme and set-up costs in respect of businesses purchased out of administration.
Adjusted earnings for the reporting period were GBP 6.80 million or 4.07 pence per share.
Total revenue for the 15 months was GBP 134.35 million. The company did not report any revenues for the 12 months ended December 2008.
Network services contributed revenues of GBP 62.55 million. Data solutions' total revenue totaled GBP 24.34 million. Mobile solutions' revenues were GBP 10.72 million for the fifteen months. Total revenue for system services was GBP 11.47 million. Wholesale revenues amounted to GBP 13.62 million, and mobile distribution revenues were GBP 11.63 million.
Daisy Group divested its WiMAX business for GBP 12.5 million after the end of the current reporting period.
After the end of the reporting period, the company completed two acquisitions, Cole Robert & Co Limited for a total consideration of GBP 2.1 million, of which GBP 0.5 million is deferred, and Fone Logistics Limited for a cash consideration of GBP 3.6 million.
The company said that acquired businesses have been integrated on schedule, and expects cost savings to be reflected in the current fiscal ending on March 31, 2011.
On June 4, the company announced that it has entered into a new GBP 75 million banking facility, provided by Lloyds TSB plc, Yorkshire Bank and HSBC Bank plc, with each lending GBP 25 million.
"The recently completed bank funding provides the Group with the capability to pursue future acquisitions and we look forward to the coming financial year with confidence," said Matthew Riley, CEO of Daisy Group.
In a separate release, the group announced that it has acquired the entire issued share capital of MurphX Innovative Solutions Limited for an initial cash consideration of GBP 4.8 million, with further consideration becoming payable based on growth in EBITDA over a three-year period.
MurphX is a provider of business broadband, virtual private networks, leased line and Ethernet connectivity, co-location, IP transit and application services, including SaaS. Its products are aimed at internet service providers, telecoms resellers and IT services organisations, who resell to SME and mid-market business customers.
Following completion, the management team at MurphX is expected to stay on and lead the integration of the business. Hampshire-based MurphX has 45,000 business broadband connections and partnerships with BT, C&W, Opal and Virgin Media and has .
For the five months ended April 30, 2010, MurphX generated revenues of GBP 4.8 million and EBITDA of GBP 0.5 million.
Riley said, "This is a highly complementary business that strengthens our position in the data sales arena and is another step towards us consolidating this fragmented marketplace."
DAY.L is currently trading on the LSE at 100.18 pence, down 3.57 pence or 3.44%.
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