Profits warning hammers Colt

By DAILY MAIL REPORTER
Updated:

 

INVESTORS hung up on the telecoms sector after Colt Telecom issued a stinging profits warning. Shares in the carrier - previously thought to be one of the strongest business market competitors to BT and Cable & Wireless - crashed 34%.

Hopes of a 30% hike in gross earnings this year have been replaced by guidance they will be 'slightly below or in line with last year'.

Colt shares tumbled 27 1/4p to 53p after rising recently on hopes C&W would mount a bid. Thus dipped 2 1/4p to 23 3/4p and BT eased 3 1/4p to 195 1/4p on fears that competition is stepping up.

'It has got a little tougher,' said Colt's chief administration officer Tony Bates. 'But we don't want to overplay the point.'

The former City of London Telecom says it is not losing customers. But fewer than expected are buying its higher-margin data services, squeezing margins.

The pan-European carrier is struggling most in France and Britain. Second-quarter sales could fall because of the strong pound.

Chief executive Steve Akin dodged the flak at a 'customer event' in Budapest. He pocketed £1m last year and returns to Boston to work for major shareholder Fidelity in autumn.

Belgian Jean-Yves Charlier joins from BT to take up the challenge.

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