Feeds

Thus shares hit by profit warning

Company blames broadband revolution

  • alert
  • submit to reddit

The smart choice: opportunity from uncertainty

Shares in Thus, the telco and ISP, hit the skids today after the group issued a full-year profit warning. Thus blamed the news on the British public's enthusiastic embrace of broadband, and ongoing problems in its other businesses.

The news has come as something of a surprise, following recent positive spin on the same trend. Indeed, in May this year, Thus highlighted its customers' transition to broadband as one of its key milestones, stating proudly that it generated more revenue from ADSL subscribers than it did from those still using dial-up.

The company now says that the lower margins on broadband have put its core business under pressure. It said it expects to report earnings before interest and tax of between £47-53m, down from its earlier prediction of £53-59m.

By lunchtime, shares had fallen almost 20 per cent, or 4.5 pence, as house broker Investec also lowered its predictions for the company's earnings before interest, tax, depreciation and amortisation (EBITDA) by 16 per cent to £49.3m.

In a statement issued earlier today, the company said it was reviewing its position on its non-core activities: namely, its call centre and scratch-card operations. It said it expects to complete the sale of its contact centre business by July 31st, and that there would be an announcement on the Interactive Services (scratch-cards) segment later this year, following a review of its performance.

The company is not alone in its troubles: last week Colt issued a similar warning, also pointing to increasing pressure on its margins. ®

Related stories

Thus swells - thanks to ADSL
Thus looks to profit in 2005
Thus passes cash flow positive milestone

Mobile application security vulnerability report

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Microsoft unsheathes cheap Android-killer: Behold, the Lumia 530
Say it with us: I'm King of the Landfill-ill-ill-ill
All those new '5G standards'? Here's the science they rely on
Radio professor tells us how wireless will get faster in the real world
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup
Just hook us up to more 10Gbps ports, backbone biz yells in tit-for-tat spat
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.