Thus provides communication solutions to business customers throughout the United Kingdom under the Thus and Demon brand names. For a time, it struggled to escape the stigma attached to fellow competitor, Energis Plc [ENGSY.PK], which entered administration after running into financial difficulties.
Both companies sprang from power distribution companies that strung fibre-optic cables alongside power lines. The difference between the two was that while Energis’s $1.65 billion (GBP1 billion) expansion in Europe crippled it financially, an unsuccessful attempt by Thus to take on incumbent BT Group Plc [BTL] in the retail market proved less expensive to rectify.
Thus was able to ride out the downturn that hit the telecommunication sector relatively unscathed, and is now confident of achieving its target for sustainable positive cash flow after interest and capital expenditure in the fourth quarter of the current financial year.
Earlier this year Thus reduced the size of its loan facility with its bankers from $148.3 million (GBP90 million) to $99 million (GBP60 million), as a gesture of confidence in its ability to start to generate cash before the end of its current financial year, which ends on March 31, 2004.
However, for the first half of the year ending September 30, Thus expects double-digit revenue growth compared to the first half of last year, a near doubling of EBITDA, operating loss more than halved, and EBITDA less capital expenditure positive for the first time. No figures were provided in the guidance.
This article was based on material originally published by ComputerWire.
