Pipex announces plan to disembowel itself
Intel WiMAX joint venture to be spun out
Pipex revealed the final stages of its corporate seppuku operation today with news that the remainder of the group intends to demerge its WiMAX business then flog itself.
The sale of the 570,000-strong broadband and voice base to Tiscali for £210m cleared regulatory hurdles earlier this month. Executives told investors today it means WiMAX "no longer provides a compelling strategic fit" with the remaining hosting and business services divisions. They will themselves be opened to bidders in the fourth quarter.
WiMAX trials in Milton Keynes and Warwick were successfully completed earlier this year and are being upgraded to a full-scale commercial roll-out after registering "significant demand".
Pipex has fingered Manchester as the first major metropolitan city to launch, before the end of the year. It reckons the Intel-backed venture will be a viable consumer and internet access business in its own right.
Financials for the six months ended 30 June (and so include broadband and voice) show group revenues up 58 per cent to £188.9m. The divisions which now remain part of the group accounted for £35.8m.
The intact group chalked up a pre-tax loss of £8.5m as it digested the acquisitions of Bulldog and Toucan, compared to a profit of £0.8m a year earlier. Start-up losses from its share of setup costs for the WiMAX business were also higher.
The hosting and domain business continued to benefit from market growth in internet traffic, the division boosting revenue 12 per cent to £17.3m. The profit margin for the racket slipped only slightly on a year earlier to a tidy 65 per cent. Which is nice.
The complete announcement to investors is here. ®