VAN Vanco

RNS Number:1119N
Vanco PLC
01 February 2008


Immediate release


1 February 2008


                                   Vanco plc

                               Trading Statement


Vanco plc ("Vanco"), the global Virtual Network Operator ("VNO"), today issues
an update on the total contract value ("TCV") of orders won, period end net debt
and average net debt for the financial year ending 31 January 2008. A full
pre-close trading update will be issued in the week commencing 18 February 2008.


In the second half of the year to 31 January 2008 Vanco won new contracts with a
TCV of approximately �85m compared to �81m for the same period last year. This
brings the TCV order intake for the financial year to approximately �205m
compared to the �131m won last year and represents an increase of 56% year on
year.


As detailed in our Interim Statement of 25 September 2007, as we bid for new
business greater focus is now being placed on the overall contract profitability
and the underlying cash generation of the total contract, rather than period end
net debt considerations.


While the order outcome for the year represents significant progress, it has
been achieved after delays to the signing of several deals where the company
believes it will be able to negotiate more favourable terms early in the new
financial year. Furthermore, of the three deals that were delayed in the first
half of the year, two contracts have been subsequently completed at a lower
initial cash amount but at a materially higher gross margin. The company decided
to withdraw from the bidding process for the third deal for what it considers to
be sound commercial reasons. This approach is in line with Vanco's commitment to
achieve optimal gross margin and cash flow generation over the total contract.
The result is that the period end net debt at 31 January 2008 is expected to be
approximately �63m (subject to audit) and therefore in excess of the consensus
market expectation. Additionally, while trading performance is typically
weighted towards the second half of the year, and especially the fourth quarter,
the seasonality has been more marked this year. With more customers signing
contracts, and paying initial fees, closer to the year end; average net debt in
the second half is now higher than expected and is anticipated to be in the
region of �79m. Vanco remains in compliance with its banking covenants.


The management remains confident that there has been no diversion from the
overall improvement in the underlying cash flow metrics of the business. Vanco's
adherence to stricter commercial criteria should result in a more profitable and
cash generative business and the pipeline of new deals remains strong.


For further information please contact:


Vanco plc


Peter Johnston, Group Finance Director

T. +44 (0) 20 8636 8812



Morten Singleton, Director of Corporate Communications

T. +44 (0) 20 8636 6529

Morten.singleton@vanco.co.uk



Katie Tzouliadis, Biddicks

T. +44 (0) 20 7448 1000



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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