Daisy bullish despite rising losses

BUSINESS communications group Daisy saw pre-tax losses widen by 25% to £23.5m last year but management is confident about its future prospects and emphasised its commitment to a 4p dividend.

In the year to the end of March, pre-tax losses increased by £4.8m to £23.5m on revenue of £351.5m, up 1%.

The Nelson-based business said earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for share-based payments and exceptional operating costs, were static at £56.3m.

It blamed the rising losses on a £66.2m amortisation charge, up from £61.9m.

In a statement the AIM-listed firm pointed to increased cash generation of £47.6m, up from £29.1m, and said it had improved its product mix, reducing a reliance on fixed line calls. It also made progress with cross-selling which has increased the proportion of customers taking three or more products.

During the year Daisy spent £31.5m on two acquisitions – Worldwide Group Holdings and The Net Crowd – which it said had increased its capabilities and product range. Since the year end it has paid £7.5m for the data centre assets of 2e2.

Chief executive Matthew Riley said: “We have made good progress during the period, completing two acquisitions, with another one transacted post year end. In addition, the group has continued to progress its organic growth strategy and has seen an improvement in cross-selling, with an increase in the proportion of customers taking three or more products.
 
“These results demonstrate the cash generating capability of the Daisy business with significant growth in our free cash flow generation. This has been recognised by our banking syndicate partners who have made available a significantly enlarged facility to assist with our continued acquisitive growth strategy.
 
“Reflecting our confidence in the cash-generating characteristics of the business moving forward, we are pleased to propose a maiden full-year dividend of 4p per share and to reiterate our guidance on expected dividend progression of 15% for each of the next two years.
 
“Notwithstanding ongoing macroeconomic headwinds, the group is cautiously optimistic about the year ahead. With a strong balance sheet and a solid base of recurring revenues from an improved product mix, we are well positioned in these more challenging economic times.”