Thus says times are tough in telecoms

THE LOSS-making business telecoms group Thus today remained wary about its outlook, but said it could take encouragement from recent strong growth.

Glasgow-based Thus, which posted a 71% rise in annual operating losses to £36.3m, said it was expecting the aggressive pricing in the industry to continue throughout the year.

However, Thus said it had retained all its customers during the year, despite the particularly tough price competition. It said 16 of its top 20 clients had increased their business with it and new business had come from firms including radio groups GWR and Chrysalis, publishers Johnston Press and Archant, Glasgow City Council and South London & Maudsley NHS Trust.

Finance director John Maguire described the year as mixed, with margins squeezed by predatory pricing. However, he added: 'This is about growth and cash flow and we're moving in the right direction on that.

'Clearly we've had some disappointments during the year, but growth and cash flow are key.'

Thus, which employs about 1,433 people, celebrated its fifth anniversary on the London market in November. It was spun off from Scottish Power in 1999, and has been a takeover target ever since.

Maguire said the group expected regulator Ofcom's review of the fixed line market to offer business opportunities, although more details were awaited.The company increased its total number of Demon broadband customers by 56% to more than 150,000, with UK customers up 59% to 92,000.

There had been a 100% retention rate on major customer renewals and service provision was expanded with insurer Standard Life, London Metropolitan Network, Scottish Power, Stirling Council and Amserve.

The company warned in September that first-half earnings would fall short of the previous year in the face of tougher trading conditions.