Colt Telecom chief assures investors over funding

Steve Akin, the chief executive of Colt Telecom, yesterday insisted the telecoms company had enough cash in its coffers to get to break even even though he admitted markets were likely to remain tough this year.

"We have a plan in place. We've moved to the next phase of our strategy," he said, adding: "My guess is I don't think there'd be much question that we'll be cash flow positive in 2005."

Colt said it had burnt through about £43m of its cash pile in the fourth quarter of last year, leaving it with about £935m of cash – enough, on that basis, to last it for more than five years.

But the company cautioned yesterday that it expected no reprieve this year from the tough market conditions and "belt tightening" by customers that characterised 2002.

"2002 was a tough year and there are no signs that the going will be any easier in 2003," Mr Akin said. "That said, Colt is better positioned than most." Its shares closed up 10.5 per cent at 42.25p.

In an effort to cut costs further, it plans to axe about another 500 jobs by the end of September to cut staff numbers down to about 4,300. It ended the year with some 4,855 staff, down from 5,700 at the start of 2002.

For the year to 31 December 2002, Colt reported a pre-tax loss, after exceptional items, of £718m, compared with a loss of £360m a year before. Sales rose by 13 per cent to just over £1bn. On an underlying, or Ebitda, basis, the company reported a profit of £71.5m, up from £24.6m the year before.

The figures are the first the company has released since winning its High Court battle against rebel bondholder Highberry which had been trying to force it into administration. Highberry had alleged that Colt would not be able to repay or refinance its £1.2bn of bonds when they became due between 2005 and 2009.

Mr Akin said Colt would "continue to be opportunistic" about buying back some of its £1.2bn of bonds in the market place. Colt has spent around £182m over the past two years buying back £342m worth of debt.