21 May 2008

Preliminary Results
For the year ended 31 March 2008

Maiden Operating Profit Delivered for the Year
Increased Financial Strength

THUS Group plc (THUS.L), the UK-focused telecommunication company, today releases its Preliminary results for the year ended 31 March 2008 in which it announces its maiden operating profit, significantly improved free cashflow and third consecutive year of EBITDA¹ and EBIT ¹ expansion.

Financial highlights for the year¹

• Revenue up 8% to £576.2m (FY 07 £532.7m) driven by growth in Managed solutions and Data and telecoms
  

• EBITDA¹ up 33% to £57.0m (FY 07 £42.9m), EBITDA¹ margin improved to 9.9% (FY 07 8.0%)

• Operating profit of £4.0m (FY 07 operating loss of £11.1m)
  Adjusted operating profit ¹ of £5.9m (FY 07 adjusted operating loss¹ of £5.8m)

• Free cash flow² significantly improved to -£6.0m for the year (FY 07 -£25.7m); inflow of +£6.9m in the second half of this year

• Strong balance sheet maintained: net debt³ of £31.9m (FY 07 £25.8m); net gearing³ of 6.9% (FY 07 5.5%)

Operational highlights for the year

• Next-generation services accounted for over 70% of new major corporate and public sector contracts⁴signed this year

• Contract momentum nationwide across multiple sectors. New business won this year is testament to our capabilities and consultative approach and included:
  
  

  Education:	Aberdeen Metropolitan Area Network (AbMAN); ClydeNET; Fife and Tayside Metropolitan Area Network; Imperial College London; University for Industry; Queen Mary, University of London; University of the West of Scotland (formerly University of Paisley)
  Public sector:	South Somerset District Council
  Utilities:	ScottishPower; Wales & West Utilities
  Retail:	Thresher Group; VME Retail; Vodat International
  Media:	Global Radio; Johnston Press; MGt plc
  Other:	Hanover; Kwik Fit Insurance; Standard Life

Commenting on the Preliminary results, William Allan, Chief Executive said:

"We are delighted to announce our maiden operating profit for the full year. This achievement further validates our business strategy to focus on next-generation services for our customers.

The scale and operating leverage from the THUS UK national network and services has delivered significant operating cost efficiencies which, taken togethe with our growth and improved revenue mix, resulted in our third consecutive year of EBITDA¹ and EBIT¹ expansion.

As our industry continues to transition from legacy to next-generation services, THUS is increasingly strongly positioned. Over 70% of all new major contracts⁴signed were for next-generation services. These services contribute over 60% of our variable gross margin, up 7% on last year.

Our balance sheet remains strong with low levels of gearing and a healthy cash balance. We are encouraged by our progress over the past year and by our ability to design and manage larger and more complex contracts.

Although there is uncertainty about the UK economy, the outlook for this financial year is in line with the Board's expectations."



¹ All financial highlights relate to continuing operations. Adjusted operating profit / loss (EBIT) is stated before restructuring costs and the amortisation of intangible assets. Earnings before interest, tax, depreciation (including impairment) and amortisation (EBITDA) is stated before restructuring costs. EBITDA is stated after share-based payment costs.
² Free cash flow represents operating cash after interest, taxation and capital expenditure (see note 13 to the Preliminary Statement).
³ Net debt represents loans and finance leases net of cash and cash equivalents. Net gearing is net debt represented as a percentage of the total equity attributable to equity holders of the parent.
⁴ Next-generation services exclude traditional fixed switched voice services, leased lines, frame relay and ATM data services. Major corporate and public sector contracts represent bespoke contracts typically covering higher value sales.

For further information, please contact:

THUS Group plc
Jennifer Lawton THUS Investor Relations Manager	+44 (0) 141 566 3176
Barbara Anne Nimmo THUS Head of Press and Corporate Communications	+44 (0) 7912 395 975
Redleaf (Public Relations Adviser to THUS)
Emma Kane or Paul Dulieu	+44 (0) 207 822 0200

An analysts’ conference will be held this morning at 09.00am for 09.30am at the City Presentation Centre, 4 Chiswell Street, Finsbury Square, London, EC1Y 4UP. A simultaneous webcast of the conference will be screened at www.thus.net via the following link www.thus.net/prelims. Webcast participants are advised to visit the web link at least 15 minutes before the start of the conference to ensure they have all necessary software to take part.

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