Our pre-tax loss is in line with market expectations and reflects our successful European expansion plans enabling us to offer our services in the UK, France, Germany, Holland, Belgium and Spain, with Italy and Switzerland to follow in the near future. We also have substantial opportunities arising from telecoms deregulation across Europe. We therefore have a positive outlook for the rest of the year and expect continued strong sales growth.
I am pleased to report that the first six months of 2000 has been another period of rapid growth with revenues rising by 53% on the corresponding period in 1999, from £12.4m to £19.0m. The company increased net assets to £63.0m from £15.7m in the corresponding period in 1999, and generated a loss of £3.5m resulting from further European sales and infrastructure expansion.
Easynet is now able to offer corporate Internet access, hosting and services throughout the U.K., France, Germany, Holland, Belgium and Spain and will be offering service in Italy and Switzerland in the near future.
Growth in the corporate sector was strong, with revenues reaching £13.0m up by 55% on the corresponding period in 1999, delivering Internet access including digital subscriber line (DSL) services, hosting, and integration services to more than 10,000 businesses throughout Europe.
Dial revenues also rose strongly to £6.0m representing a 50% increase over the corresponding period in 1999. Easynet has provided Internet access for more than 650,000 registered users of its backbone Internet services either as Virtual Internet Providers (VIP’s) or through Easynet’s own brand services such as UK Online. Easynet will continue to build out its own interconnected Telecoms network to provide a range of dial-up options for corporate customers and VIP’s.
In April 2000, the company raised £51.8m after costs by way of an issue of 2.48m ordinary shares to finance further European geographic expansion of sales, network, and services seizing on the opportunities which have been created through deregulation of the Telecoms sector.
Telecoms deregulation across Europe has given rise to an opportunity for co-locating Easynet equipment inside the local exchanges of the incumbent Telecoms operators, and connecting customers’ copper lines to this equipment. This is a key part of what is commonly known as Unbundling of the Local Loop (ULL) and means that Easynet will be able to offer corporate customers an alternative option to the incumbent operator for broadband Internet access over copper using DSL technologies.
It is the company’s intention to deploy equipment in key local exchanges throughout Europe at the earliest opportunity and to this effect orders for co-location space in local exchanges have already been placed in Germany and Holland, whilst talks are ongoing with regulators and incumbent operators elsewhere.
Leases have been signed in Milan and Zurich for Datacentres and office space, and a further 78,000 sq foot property has been secured in London, following strong demand for existing facilities. These centres together with ULL and a full range of integration services will, in your Directors’ opinion, further enhance Easynet’s portfolio of access and hosting services throughout Europe.
The outlook for the rest of the year is positive with strong sales growth and further expansion of the Easynet European network. The board looks to the remainder of the year with confidence.
