Any thoughts regarding the potential for this one and why the big drop today?

re rating?

why the sudden rise

Takeover rumours persist.

Broker note issued late pm yesterday made a strong case for the shares I am told.

30.11 11:42 - Fibernet Not In Bid Talks;Consolidation Not Inevitable-3
In the year to March 31, 2006, Bray said consensus market expectations point to a net loss of around GBP1 million and revenue of around GBP52 million.

He said free cash-flow should be GBP17 million or above while earnings before interest, taxes, depreciation and amortization, or EBITDA, for the year should be between GBP18 million and GBP19 million. However large depreciation costs will result in the small net loss in fiscal 2006.

"We're in sight of a net profit," Bray said, pointing to consensus market expectations of a net profit of GBP2 million in the year to March 31, 2007.

Company Web site: http://www.fibernet.co.uk

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

First Quarter Trading Statement

Basingstoke, 7 December 2005.

Fibernet Group plc, the bespoke network service provider, today reports on progress for the first quarter of the financial year, ended 30 November 2005.

Highlights:
Service Contract revenues increased to 11.6m

Q1 2006 11.6m
Q4 2005 11.4m
Q3 2005 11.1m
Q2 2005 11.2m
Q1 2005 11.6m*
* Note: reported Q1 2005 service contract revenue was 11.6m. This included an exceptional contract termination payment of 0.5m. Excluding this exceptional payment, the underlying revenue was 11.1m.

Total new contract value (TCV) signed was 12.7m

Q1 2006 12.7m
Q4 2005 16.2m
Q3 2005 7.8m
Q2 2005 14.2m
Q1 2005 9.9m
The 12 month rolling TCV run rate increased from 48.1m in Q1 2005 to 50.9m in Q1 2006.

An exceptional gain of 1.5m has been recorded, arising from the sale of an asset (0.3m) and the restructuring of several fibre leases (1.2m). The restructuring of the leases also yields a reduction in ongoing annual operating costs of 0.5m.

The funding position remains strong; cash is predominantly used to connect new customers.

Cash balance:

Q1 2006 16.9m
Q4 2005 17.2m
Q3 2005 10.5m
Q2 2005 11.7m
Q1 2005 13.4m
Charles McGregor, Chief Executive, comments:
"Fibernet's performance in the first quarter has been solid and we continue our progress towards profitability. New business orders and contract renewals for the first quarter have both been to plan. Our margins remain in line with our expectation and we continue to maintain a substantial cash balance. The validity of our niche focus is well supported by these results."

Trading:
In the last quarter we have made positive progress in all areas of the business.

We have continued to enjoy success in the Business Continuity and Storage Networking market with large corporate customers and we are pleased to report new business wins in this area including T-Systems (for Linklaters) and repeat orders from JP Morgan and GlaxoSmithKline. Our special relationship with Cisco Systems in this area remains a strong differentiating factor.

Our recent execution of a major technology and capacity upgrade for our national network was both well timed and operationally well executed. The upgrades were planned to coincide with a series of major investments by tier 1 and tier 2 Internet Service Providers (as well as a number of new entrants to the broadband market) in local loop unbundling projects. Very few of these companies own their own national infrastructure and Fibernets neutrality (we do not provide consumer or SME broadband) and suitability (our upgrades provide exactly the right sort of service for very high density broadband deployments) have enabled the company to capture business with both OPAL (for The Carphone Warehouse) and Be Un Limited. We expect to report further progress in this area in due course.

Our presence in this most demanding of markets was rewarded last month with an award for being the Best National European Wholesale Provider at Telcaps 5th Annual European Telecommunications Congress in Amsterdam.

Our Systems Partners channel continues to perform well and we are pleased to report that our current partner recruitment programme is generating considerable interest and the first orders from this initiative are now being delivered.

Our Ethernet services remain in strong demand and now account for a very high proportion of our sales into the service provider market. We were pleased to win, amongst many others, significant new orders for these services from Star Internet and Edge Communications during the period.

Our Carrier Rings in London and Frankfurt are delivering to plan and our product development programme to further extend these services into the rapidly growing market for international Voice over Internet Protocol is entering its final beta test phase.

During the period, the company purchased a number of fibre optic cables and ducts previously leased by the business. The purchase of these assets provides an exceptional gain of 1.2m and in addition will reduce operating costs by 0.4m in the current financial year and then by 0.5m in each financial year thereafter, predominantly through a reduction in finance charges. The total capital cost of the purchase is 3.15m. 2.0m of the payment will be made in December 2005 and the remainder in December 2006. Should certain conditions be met, the final payment will be accelerated. In addition, a contract was signed to sell previously impaired assets providing a further exceptional gain of 0.3m. The total exceptional gains of 1.5m will be recorded in the first half year results.

Summary
A satisfactory quarter of trading once again supports the validity of our focus on high value, low volume niche Enterprise networking projects, underpinned by the relatively high volume business placed by our Service Provider customers and our growing Systems Partner channel. The sales pipeline in all three markets supports our confident outlook.