AdEPT Telecom plc Chief Financial Officer John Swaite caught up with DirectorsTalk for an exclusive interview to discuss their new dual facility finance package, the rationale behind their recent acquisition of Our IT Department and what we can expect from AdEPT moving forward
Q1: John, can you give us a summary of the new finance package for AdEPT?
A1: Yes, we’ve just refinanced at the start of February, what we’ve done is we’ve refinanced our existing £15 million revolving credit facility and we’ve doubled it to a £30 million revolving credit facility. It’s on a 5-year term, which is the same as the previous facility, but the difference here is that we’ve moved from a single bank, previously with Barclays, to a dual facility that’s 50/50 split between Barclays and Royal Bank of Scotland so they’re on an equal basis. Part of the reason to increase the facility is for us to have extra funding available to fund strategic acquisition of businesses and increase our scale really.
Q2: Now talking of acquisitions, what’s the strategic rationale for the new acquisition?
A2: We’ve just acquired a business called ‘Our IT Department’ with effect from 1st February and that had a trading subsidiary called Brightvisions, both of those businesses are well-established UK-based specialist providers of outsourced IT services. With the increasing convergent of telecommunications and IT, we can see that it is beneficial for us to add IT into our own product set because it’s a prerequisite for a number of customers when they’re going out there and tendering for new business. The line where telecoms end and IT starts is becoming increasingly blurred and so this gives us the ability, it doesn’t matter where someone draws that line we can service them right the way through.
Q3: So, what financial contribution do you expect from Our IT?
A3: Well, similar to AdEPT Telecom, it’s a capital-asset like business so it’s highly cash generative. In terms of the numbers, the last reported numbers we’ve got are turnover of about £5.3 million, that was back in December 2015 and it’s been trading at a similar level. What we’re expecting in terms of profitability is for it to add about 15% in terms of bottom line and we think it’ll be earning, enhancing from completion, and so beneficial to the shareholders.
Q4: What can we expect from AdEPT Telecom plc moving forwards?
A4: Well, similar to the strategy we’ve been applying so far. So, concentrating on the organic stability of our business, cross-selling from IT and telecoms into the existing base in both directions but also, we’ll continue to review acquisition opportunities as and when they arrive and strategically go ahead with them as and when we identify ones that are going to add shareholder value and extend or complement the existing business that we’ve got.
