Colt Reports Q3, Reorganizes Operations

European alternative carrier Colt Group (LON:COLT, news) made its interim Q3 report this morning.  Revenue fell to €392.7M from €398.2M in the prior quarter and €400.1M in the same quarter last year, as voice revenues continued to bleed off while data revenues were flat and managed services saw growth.  EBITDA on the other hand grew to €83.8, up €3.0M from the prior quarter and €4.3M from the same quarter last year.  That pulls their EBITDA margins up to 21.3% – solidly above 20% now, an improvement which they attributed to both operating efficiencies and the improving product mix – i.e. less voice revenues.

Colt also took the opportunity to reorganize itself internally again.  The company will have three customer facing units.  Colt Communications Services will manage the company’s wholesale customers as well as the channel through which it addresses the Midmarket.  Colt Enterprise Services will handle the larger enterprises.  And Colt Data Center Services will focus on selling large colocation spaces to enterprise customers.  But on the service side, there will be just two groups:  Infrastructure Services for the network operations and Business Services for the rest.

The idea is to simplify the organization and create a platform for future growth, which isn’t exactly an original concept – seems like Colt has been streamlining itself for half a decade now.  But it’s a worthy goal nevertheless, and they expect to take a €35-40M charge in 2010 and to generate about €35M in efficiences from the project.  Of that amount, $20M will show up in lower costs with the rest being ‘invested in new customer facing roles’.

I’ve always thought of Colt as an eventual takeover target, but nothing has ever materialized.  They have such a deep metro footprint with some 13,000 on-net buildings across the continent, you’d think they’d be first on the list for anyone seeking a real pan-European footprint.  Well, maybe they are on the top of that list even still, it’s just that nobody is reading it at the moment.  Metro assets in Europe don’t seem to have the same level of independent gravitas that they do these days on this side of the Atlantic.

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Categories: Financials · Internet Backbones