Thus shares nosedive over gloomy forecast

Tough trading conditions, predatory pricing blamed

By Tim Richardson • Get more from this author

Posted in Financial News, 24th September 2004 09:39 GMT

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Shares in Thus nosedived 30 per cent in early trading this morning after warning that profits will be down on last year. The alternative telco behind the Demon internet brand blamed tough trading conditions and predatory pricing from rivals for the gloomy forecast.

Revenue growth for the first half (H1) of the year was strong with a headline growth of 12 per cent, but intense competitive pressure had squeezed margins in the current quarter, the company said.

"In addition, there has been an acceleration in the substitution of dial-up Internet for broadband DSL. As a result, first half EBITDA will now be less than that recorded for the equivalent period last year."

Thus is due to publish its interim results next month. Revenue will not be less than £360m and EBITDA (earnings before interest etc) will be at least £39m.

In July, shares in Thus took a tumble after the group issued a full-year profit warning, when it blamed the British public's enthusiastic embrace of broadband and ongoing problems in its other businesses.

In early trading this morning shares in Thus were down 31 per cent (5.25p) at 11.75p. ®