This morning’s Q3 statement from Colt is of the no alarms and no surprises variety. Revenue was up 0.6% yoy in the three months to September. EBITDA margin was unchanged at 21.3%. The company reports stabilising voice revenue (i.e. it’s still going down but not quite as fast) and growth from data centre services. Colt shares this morning are well ahead of a sagging FTSE, with a 1.6% rise.
Colt is doing the right thing by focusing on its core in network and infrastructure (see Colt to stand and deliver!). And there’s no doubt about the market opportunities the company is opening up for itself. For example, just this week it announced an extension of its VMware cloud datacentre service into mainland Europe. The challenge is to sell enough of such services fast enough to counteract the inevitable decline in other areas. This is a business dynamic that network service providers have become very accustomed to. What’s changing is the opportunity for a network-centric company like Colt to take – albeit in extremely competitive environments - a greater slice of the pie that IT services providers would once have regarded as their domain.
Colt is definitely “one to watch” as we continue our research into the turmoil in the infrastructure services market in the coming months.