Thus sounds positive note

July 11, 2001 Posted: 1320 GMT

LONDON (CNN) -- UK telecoms and Internet services company Thus said on Wednesday it expected to achieve positive earnings in the second half of fiscal 2002.

Thus posted first-quarter losses before interest, tax, depreciation and amortisation (EBITDA) to June 30 of £2.4 million ($3.4 million) compared with a loss of £8.7 million in the same period last year.

Revenue grew 32.4 per cent to £67 million and Thus, formerly known as Scottish Telecom, said it expected Ebitda would be negative in the first half, but would turn positive in the second half. Ebitda measures the profitability of companies with high borrowings.

Thus, which is majority owned by Scottish Power (SCP), provides telecom services in the UK, as well as Internet access under its Demon brand to 226,000 British customers and 34,000 in The Netherlands.

The company also handles Web hosting and provides call centre services, mainly for business customers.

Thus said it has seen "strong underlying growth from business sales to major corporate and small and medium-sized enterprise customers" during the quarter.

In addition to signing a number of new customers, details of which will be announced soon, Thus said it expanded contracts with others such as the British Broadcasting Corporation and the Royal Bank of Scotland.

The Scottish company said its future prospects with Demon have also been significantly enhanced after an agreement with Apple Computer  (AAPL: Research, Estimates) of the U.S. to be its exclusive Internet service provider for the UK market.

"As we said at the time of our preliminary results, our concentration has moved from building infrastructure to exploiting the assets we have available,"  the company said.

Excluding the Interactive services division, the company said revenue growth for the full year is expected to be in excess of 20 percent and Ebitda will be positive over the year as a whole.

Thus said it was fully funded until the second half of 2002, and expected capital expenditure not to exceed £100 million for the full year.

It will need another £200 million to meet its target of becoming self-funding in 2005, and is expected to announce shortly how it plans to fund itself through to profitability.

Thus (THUS) shares rose more than 12 percent to 36.5 pence in London trading after the results were released, from a 2001 high of 78 pence and an all-time high of 293.5 pence just over a year ago.

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