# Q&A with AdEPT Telecom plc: Latest Trading Update (LON:ADT)

- Link: https://www.directorstalkinterviews.com/qa-adept-telecom-plc-latest-trading-update-lonadt/412749340
- Published: 2018-04-16T11:06:48+01:00
- Author: Amilia Stone

**AdEPT Telecom plc** ([LON:ADT](https://www.directorstalkinterviews.com/company/adept-technology-group-plc/adt.l))
Financial Director John Swaite caught up with DirectorsTalk for an exclusive interview
to discuss their latest trading update

 

**Q1: John, can you give us an update on recent trading since the interim results?**

**A1**: We’ve just recently announced a trading update on the results to year ended
31st March 2018 and it’s quite an upbeat statement. The business has continued to
trade strongly since the interim results, we obviously can’t comment on specific
numbers at the current time because the audit of the year end results hasn’t yet
been completed.

We’re confident that revenues are going to be ahead of market expectation which 
was a 29% rise year-on-year to £44.4 million so we’re confident that revenues are
going to be above that number and also that EBITDA will be slightly ahead of the
market expectation where they’re expecting a 23% rise year-on-year to £9.6 million.

So, all in all, the trading is continuing very strongly in the period and we’ve 
got a confident outlook.

 

**Q2: AdEPT Telecom have undertaken a number of acquisitions, can you give us an
indication of their financial performance since acquisition?**

**A2**: Yes, the business has undertaken a number of acquisitions over the last 
24 months and the acquired businesses have continued to perform post-acquisition.

Probably the best indication of their performance is reflected in the deferred consideration
payments that we, as a business, have made out which is linked to the post-acquisition
performance for the 12 months since the day we acquired them. Comms Group which 
is the unified communications business based in Northampton, that one hit the maximum
deferred consideration, and a bit beyond it, so we paid the full amount in July 
2017. More recently, the Our IT acquisition which we undertook in February 2017,
which is a commercial IT business based in Chingford and St Neots, that one also
hit the maximum deferred consideration and has just been paid in full in April 2018.

So, we’ve been very pleased with the performance of those businesses post-acquisition
and we’re also very pleased that the senior management teams have all stayed on 
with the businesses. So, very pleased with the performance.

 

**Q3: So, the business operates an asset light model, has the strong operating cash
flow conversion continued?**

**A3**: Yes, it has. As a group, we’re operating the same asset light business model
across all the sites, whether it’s in telephony, unified communications or IT, we’re
all very focussed on generating EBITDA and converting it into cash and that has 
continued. The best demonstration of that is at year-end, we had lower than forecast
net debt at March 2018, even after taking into account the timing of the Our IT 
deferred consideration that was paid shortly after year-end, the net borrowings 
as a company were £300,000 lower than the market expectation.

So, nothing has changed in AdEPT’s business model, we’re still highly cash generative
and we look to continue like that.

 

**Q4: Can you give us an update on the progressive dividend policy?**

**A4**: We are operating a progressive dividend policy and, as I referred to previously,
we’re continuing to generate strong cash flow which we’ve been typically returning
part of that back to shareholders through the dividend, with the balance either 
being reinvested in the business or reducing down the net borrowings. So, it’s a
combination of those things.

In terms of the dividend policy specifically, in the trading statement we’ve just
announced the recommendation of a final dividend of 4.5p per share which, subject
to getting approved at the AGM, should be paid to shareholders in October 2018. 
So, if you take into account the final dividend plus the interim dividend, the total
dividends for the year are at 8.75p per share which is a 13% increase year-on-year,
so shareholders should be pleased with that return.

 

**Q5: Finally, when can we expect AdEPT Telecom’s full-year financial results?**

**A5**: The audit is currently in progress and what we’re expecting is in line with
our normal timetable, we’ll be releasing the final results in early July with the
actual printed annual report to go out to shareholders some time in August 2018.
So, everything will be in line with our normal timetable in previous years.

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