Colt Telecom warns Q2, FY unlikely to meet mkt forecasts


LONDON (AFX) - Colt Telecom Group PLC, a pan-European provider of business communications solutions and services, said tough market conditions and pressure on margins are expected to continue throughout 2004 and consequently the company does not now believe that it will meet market expectations for the quarter ended June 30 and the year ending Dec 31 2004.

Colt now expects that for the year ending Dec 31 2004, reported revenues will be above last year and that EBITDA will be slightly below or in line with last year.

Operating free cash flow will however show an improvement over 2003 reflecting lower capital expenditure and improvements in working capital.

At constant exchange rates, second quarter revenues are expected to be ahead of both the second quarter of 2003 and the first quarter of 2004.

However, Colt also said that since the publication of its first quarter results on April 21, the company had experienced tougher than expected trading conditions.

In addition, there has been slower than anticipated uptake of its data products and the performance of some higher margin voice products has been "disappointing".

During the second quarter, revenue growth has therefore come mainly from the lower margin segments of the business. As a result, even though costs continue to be under tight control, overall margins are now under pressure.

Colt president and CEO Steve Akin said: "We are taking action to improve revenues and are continuing to develop new products, particularly in the higher margin data segments. These initiatives are expected to have a positive impact in the longer term."

He said Colt remains financially strong with cash and liquid resources of close to 800 mln stg and the group remains on track to be free cash flow positive on a sustainable basis during 2005.

"Our strong customer base and industry leading customer service combined with tight management of costs and strong financial position will continue to allow us to weather what remains a challenging operating environment," he said.

newsdesk@afxnews.com

slm/

44p today. More downtrend likely.

Colt telecom now From last weeks fall, it now at a Huge discount to any investor, it appears to have been over done and the market sees the chnace of a rebound..starting today, up on the day now 41p lows...Bought in myself...Ahuge fall is always great when you dont have ann Open position..phewww i say...

Now I do...bought at 42p...looking for a great rebound...

Keep well Jules99...

speculation on Colt predators starting to resurface again - what will happen this week, who are the likely predators?? how cheap is cheap??? Is there a better time to buy-out???

Market Cap now halved to 600m, so new names could come on to the buying horizon - sooner rather than later is my bet...

Keep lucky and always do your own research..it pays...!

jules99...

Good luck to u, Jules99.