COLT Reports, Looks to Raise Cash

February 21st, 2009 by · 1 Comment

European alternative fiber operator Colt Group (LON:COLT, news) reported Q4 and full year 2008 earnings today.  Total revenue increased to €427.5M from €420.7M in the third quarter.  Overall in 2008 on a constant currency basis revenues increased 2.4%, the company has been driving data revenues while churning off voice revenues for several years now.  Data revenues in Q4 rose to 55% of the total.  It remains unclear just how long the company will run in place in terms of total revenue, but the economy surely won't help.

colt_logoThe favorable change in revenue mix and continuing cost reduction efforts have helped EBITDA some, reaching €78.6M in the fourth quarter.  Free cash flow of €18.4M was also an improvement.  COLT says they have not see a material change in performance trends since New Years, but they declined to give much in the way of guidance due to the economy - a familiar song this month.

Separately, COLT announced that it is seeking to raise about €200M by selling stock.  While their cash position at €273M is solid, their debt of €262.2M matures in December of 2009, hence the equity sale.  I'm sure they would rather have done it in a more favorable market, but in this environment I'm surprised they waited this long.

I have long thought that COLT would wind up in M&A somewhere along the line, their continent-wide deep metro penetration and 16,000 on-net buildings represent a unique asset that has long term value.  So far though it just hasn't happened, and given the current conditions it seems unlikely for a while. But if they succeed in their equity sale and pay off their debt, they could be open to a stock M&A deal.

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Categories: Financials · Internet Backbones · Metro fiber

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  • Ronin says:

    Go figure. I agree, Colt should have been more open to selling itself – Fidelity, its controlling shareholder, is acting irrationally. Raising capital in this market? Glad I’m not a shareholder.

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