Daisy posts £16.2m loss but looks ahead to more growth

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Matthew Riley, Daisy Group

8:25 am, June 22, 2010
Daisy posts £16.2m loss but looks ahead to more growth

Daisy Group Plc (AIM: DAY), the Nelson-based business telecoms provider, today posted a £16.2m pre-tax loss for a 15-month period when it became listed on AIM after being taken over by Freedom4 Group Plc.

It posted ebitda earnings of £10.97m on revenues of £134.4m in the period to March 31 and chief executive Matthew Riley said the results “demonstrate the progress we have made towards our aim of becoming one of the largest UK providers of unified communications services and solutions to the SME and mid-market sector.”

The operating loss was £17.5m and there were net exceptional costs of £5.8m, mainly rationalisation and redundancy costs incurred from integrating businesses and set-up costs relating to businesses bought out of administration.

Daisy said underlying positive operating cashflow of £8.2 million showed its ability to convert adjusted EBITDA to cash.

Riley added: “We have integrated acquired businesses on schedule, providing significant cost savings which will be reflected in our results for the year to 31 March 2011. We have in place the platform, the systems, the people and the product set to allow us to continue to grow organically and by further acquisitions.”

Riley said newly secured bank funding of £75m would enable the group to pursue future acquisitions.

The group is getting out of wireless broadbrand, which was Freedom4's main activity, and sold off its WiMAX business for £12.5m after the period end. It is now concentrating on four main product areas of network services; data solutions such as broadband, leased lines and bonded digital subscriber line data hosting; system services and mobile.

Daisy carried out seven acquisitions during the period and has extended its headquarters in Nelson into a new building which can house up to 300 more employees.

Chairman Peter Dubens said the acquisitions had led to significant cost savings including the closures of operations in Halifax and London. He added: “The market environment remains difficult for smaller, sub-scale, operators and this will provide further acquisition opportunities for the group during the current financial year.”

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