Billing Services slashes debt but warns on full year sales

11th Sep 2013 14:47

Telecoms billing facilitator Billing Services Group saw revenues dwindle in the first half and warned full year figures would fall below expectations. The company produced a net loss up from $8.2m to $9.3m as revenues fell 30% to $27m in the half to June. Earnings before interest, tax, depreciation and amortisation (EBITDA) slipped by a third to $5.8m.Although the Texas and London company said current trading was in line with board expectations, it added that it expected revenues in the second half of 2013 to be adversely affected by the longer time closing larger deals at Connection Services Holdings, its 2012 acquisition.This was coupled with the ongoing secular decline in the volume of billable long distance and operator service calls initiated on landline phones". As a result, it warned full year revenue was likely to be "marginally below" its original full year guidance of $55m-$58m, with EBITDA still expected to be within original guidance of $11.5m-$12.5m.Chief Executive Officer Norm Phipps stressed that management's main focus was to aggressively push cash flow, which allowed for an $11.1m debt reduction in the first half. "Our business plan continues to prioritize debt reduction, development or acquisition of new diversifying revenue sources and, as feasible and prudent, the distribution of cash to shareholders."The AIM-listed company generated $10.7m of cash in the period and after paying down debt had a period-end balance of $20.8m.Phipps added that the company had "weathered strong headwinds" during the past three years as it attempted to cut costs and develop new revenue sources. "We cannot predict whether and when we can make future cash distributions to shareholders. Rest assured, however, with our commitment to execute a business plan which maximizes shareholder value." Shares in BSG were down 25% to 2.1p at 16:14 on Wednesday.OH