report and accounts 2005
spectrum interactive plc
spectrum interactive plc report and accounts 2005
spectrum interactive plc
po box 668 parker house
maylands avenue
hemel hempstead
hertfordshire hp2 4wa
t el   01442 205 500 
fax   01442 261 001 
infospectruminteractivecouk
wwwspectruminteractivecouk  t he d esign p or tfolio
a member of the flathill communications group plc
wwwflathillplccom
designed  produced by
financial highlights


Summary:
 chairman’s statement
introduction
i am delighted to report our maiden results 
following the company’s admission to aim in 
april 2005 it has been a year of tremendous 
progress with both our uk and german businesses 
expanding their core payphone estates and the 
acquisition of uk explorer in february 2005 
making spectrum one of the largest independent 
operators of internet terminals in europe we 
have also moved into two new exciting product 
areas in automated teller machines atms and 
digital photo printing and plan to introduce other 
complementary digitalbased services in the 
forthcoming year 
spectrum has over 650 customers in the uk 
and germany and operates from three ofﬁ ces in 
hemel hempstead hamburg and central london 
we manage over 8900 payphones and 1200 
internet terminals the group employs 120 people 
financial review
the ﬁ nancial performance for 20045 was 
impressive and we have met our ipo expectations 
overall it was a year of growth with turnover from 
our underlying businesses rising from £159m to 
£170m which includes £09m being derived from 
the acquisition of uk explorer 
on a proforma basis adding a full year’s revenue 
from uk explorer which we acquired in february 
2005 the turnover would have been £180m 
a 6 increase 
reported turnover for the group increased 
from £05m to £170m as 2005 is the ﬁ rst 
full year of consolidating the results of nwp 
spectrum holdings
gross proﬁ t margins were 47 slightly up on the 
prior year with the internet business showing 
margins in excess of 50 group margins should 
improve further as the internet business increases 
its share of group turnover 
proﬁ t after tax was £246m or 89p per share 
on a fully diluted basis with a tax credit due to 
capital allowances carried forward from prior years 
a position we believe can be maintained for the 
next two years 
the business is now beginning to leverage its real 
estate assets and site owner relationships the 
former via strategic partnerships and the latter via 
the introduction of new products and services and 
it is this strategy that will drive forward the growth 
and proﬁ tability of the company 
in april 2005 the company successfully ﬂ oated 
on aim raising net proceeds of £55m the bulk 
of which was used to restructure the ﬁ nances of 
the company the company’s gearing has been 
signiﬁ cantly improved by the ipo with debt 
reduced by £44m to £71m and with year end 
cash of £20m following a year of heavy capital 
investment the company intends to use its strong 
cashﬂ ow to generate further organic growth and 
undertake strategic acquisitions underpinned by 
a commitment to return a reasonable portion of 
proﬁ ts to shareholders t o this end i am pleased to 
report that due to the strong ﬁ nancial performance 
of the last year the board will be recommending a 
maiden ﬁ nal dividend of 109p per share payable 
on 16 december 2005 to shareholders on the 
register on 2 december 2005
going forward it is the group’s intention to pay a 
dividend in the region of 40 of proﬁ ts after tax 
“ having listed on aim we have met our preipo expectations 
 we have not only integrated key acquisitions but also continue 
to grow organically as well given the full year effect of the two 
acquisitions made in 200405 and the company’s strategy for 
organic growth i am conﬁ dent that 200506 will be another 
strong year for spectrum interactive” 
6 report and accounts 2005 spectrum interactive plc
lord young of graffham 
chairman
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contribution during this exciting year they are the 
steadfast proponents of our corporate objectives 
of providing high quality innovative communications 
services to our site partners and customers and 
delivering value to our shareholders 
  for further explanation of the proforma amounts see the unaudited 
additional information on page 38
outlook
growth prospects for 20056 are good driven 
in particular by the expansion of the internet 
business we have successfully integrated the uk 
explorer team and moved into new ofﬁ ces on 
baker street in central london we expect this 
business to grow signiﬁ cantly in 20056 as we add 
several hundred new units making us one of the 
largest public internet operators in europe with 
around 1500 ﬁ xed and wifi units in service 
on the payphone side of the business we expect 
to receive the fullyear beneﬁ t of the ipn asset 
acquisition despite the slight delay in the ipn 
rollout this will soon be completed and will 
generate additional traditional payphone turnover 
as well as increasing other revenue streams such 
as advertising and atms 
our partnerships with atm operators are 
expected to fuel growth in proﬁ tability we expect 
around 100 kiosks to be deployed by june 2006 
the ﬁ rst installations took place in august 2005 
in germany we anticipate that growth will come 
from further expansion of our core payphone 
business the expansion of internet terminals in 
our airport and travel base and other partnerships 
that are currently under negotiation based upon 
successful uk models 
further growth is expected to be realised by 
targeting speciﬁ c acquisitions in both territories 
as well as selectively considering new territories 
in particular we believe spectrum can be a key 
consolidator in the internet area 
finally i would like to extend my thanks to the 
management and staff for their wholly positive 
the dividend this year is 30 of half a year’s 
proﬁ ts after tax reﬂ ecting both the heavy capital 
expenditure during the year and also the fact that 
the group only went public midway through the 
second half of the year
acquisitions
in august 2004 the company purchased 1000 
public call box sites from interphone public 
networks limited ipn the ipn sites had suffered 
from a considerable lack of investment and poor 
maintenance and as a result we have undertaken a 
large capital investment programme to replace the 
ipn estate in the process reducing the number of 
units to 750 this initiative has been well received 
by local authorities and residents alike as it has 
both upgraded the street scene and reestablished 
a vital public service due to trafﬁ c and other 
public highway restrictions the project has been 
slower to implement than originally intended 
but all works should be completed by the end 
of september 2005 
the february 2005 acquisition of uk explorer a 
leading operator of internet terminals in airports 
and hotels has proven to be a signiﬁ cant step 
forward for the company uk explorer were in 
the process of rolling out a large contract with 
baa the airports group and were looking to 
partner with a larger group who could provide 
operational support and fund further growth as 
a result our internet business has moved strongly 
into proﬁ tability during 20045 in the next year we 
plan to add several hundred internet units in the 
uk and germany and a string of new webbased 
innovations to our internet desk product which 
we believe will signiﬁ cantly enhance the customer 
experience and increase per unit revenues
 report and accounts 2005 spectrum interactive plc
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