Daisy acquires Layer 3 as losses grow

Telecoms group Daisy has acquired Nottingham-based LAN and WiFi specialists Layer 3 as year-on-year losses increased.

The Nelson firm's most recent accounts detail four acquisitions, costing £35.3m in cash, though this represented just a 0.3 per cent increase in revenues to £352.7m. The additional purchase of Layer 3 was completed after these figures were filed.

Operating losses increased from £16.8m to £17.8m, with pre-tax losses increasing to £24.3m.

However, chief executive Matthew Riley highlighted an increase in adjusted earnings, before, interest, tax, depreciation and amortisation of nearly 3 per cent to £57.9m, and a 2.6% increase in the gross profit margin to 39.5 per cent.

He said: "We have made good progress during the year from both an organic and inorganic perspective. The acquisitions we have made are performing ahead of expectations and help to provide a better balanced product portfolio mix, which positions us well for the continued convergence of IT and communications.

"In addition to those in the period, post year end we completed the acquisition of Layer 3, the WiFi and LAN specialist which will complement the product offering in both our retail and wholesale divisions.

"Looking forward, we expect to continue with our inorganic strategy alongside our key organic objective of cross-selling. Changes to our bank facilities have increased the headroom available for further accretive acquisitions and notwithstanding our desire to pursue these acquisitions, the board will consider the return of capital by way of share buybacks to maintain an efficient capital structure." Daisy has proposed a final dividend of 3.1p, taking the full-year payout to 4.6p, up 15%.