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Alternative Networks on track to reduce debt

Trading update to the London Stock Exchange says "good progress" is being made

Telecoms services provider Alternative Networks is predicting it will slice another £5.7m off its debt burden by September on the back of continued market share gains and growth in the second half.

Alternative Networks, which bought Intercept IT and ControlCircle in January, in part by borrowing £43m, has been working to expand its mobile subscriber base and generate more cash from across the entire group.

"In the legacy Alternative business, in advanced solutions, orders signed in the first six months are 25 per cent higher than last year on a like-for-like basis, thereby continuing the progress seen in the second half of 2013," it said.

"New orders have been generated across the portfolio but there has been particular success in higher education, with new contracts signed with four universities new to the group, and a further three in the public and private health sectors."

It has also signed a three-year LAN, WAN, mobile, voice and unified comms deal with Menzies Distribution. "LAN, WAN, and mobile are new services being provided by Alternative," it said.

"Some 4,300 net additional connections bring total mobile subscribers to over 85,700 at 31 March 2014."

And in fixed-line network services, customers are continuing to migrate to SIP offerings, it added.

Alternative Networks has already managed to shrink the debt burden to £35.7m, boosting mobile subscriptions 11 per cent year on year and five per cent since September 2013, it told the London Stock Exchange this morning. First-half results will be released to the market 4 June, it added.

Meanwhile, the ControlCircle and Intercept IT businesses were performing as expected so far, it said.

"The group has already signed four cross-sell contracts with customers and, encouragingly, the cross-sell pipeline continues to grow; currently there are more than 100 opportunities being evaluated," the announcement said.

A maximum net debt target of below £30m has been set for 30 September 2014.