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
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financial highlights


Summary:
  report and accounts 2005 spectrum interactive plc 8
chief executive’s review
the success of the business during the year ending 
30 june 2005 was the result of three years 
of growth and development culminating in a 
successful ﬂ otation on aim in april 2005 
there are a number of key components to our 
business which i am pleased to describe below 
internet 
our internet business is going from strength to 
strength as we build on the acquisition of uk 
explorer in particular our internet desk installations 
typically deployed in clusters of four to eight 
units at airports have been welcomed by site 
owners and customers alike the easy to use 
multilingual terminals are engineered to assist 
the casual user in connecting speedily to the web 
and wider availability of high speed broadband 
has bolstered demand the ﬂ exibility of the units 
which allows users to connect their own laptops 
through docking ports and via wifi links has meant 
that our service has become established as the 
market leader in airports and hotels in the uk 
we estimate that around 80 of all uk airport 
passengers in 2005 will have access to our service 
the market for internet terminals in particular 
at airports and hotels remains vibrant and is 
showing good growth prospects worldwide 
growth in low cost airline trafﬁ c and the 
associated rapid increase in global web awareness 
is fuelling revenue growth in our key target 
markets our locations such as heathrow airport 
continue to be in high demand but also the 
growth of regional airports such as birmingham 
newcastle liverpool and bristol is also working 
in our favour as is the bourgeoning two and 
threestar hotel market 
payphones
since the advent of the mobile phone the payphone 
as a means of communication has been in gradual 
decline however a key strength of our business 
has been its ability to manage that decline and 
as a result proﬁ tability has risen steadily over the 
last three years and the core payphone business 
remains a genuine “cash cow” we have continued 
to redeploy assets from poor sites to good ones 
and we have also managed to secure a number 
of proﬁ table new contract wins during 20045 
including the mall shopping centre group 
a tenyear contract with frankfurt underground 
and a deal for 250 units in mecca bingo halls 
and casinos 
the overall market for our core payphone 
business continues to be pressurised in both 
territories with mobile carriers providing a wider 
range of discounted or cheap tariff schemes 
the company is prudently forecasting a modest 
decline in annual revenues from payphones 
albeit we will continue to compete for new 
customers where high margins can be achieved 
and where the company’s strategic position can 
be enhanced the market for 0800 calls whereby 
spectrum is paid through the payphone access 
charge mechanism is also beginning to slow as 
the means for making international calls become 
increasingly diverse through both traditional voice 
networks and newer voice over internet protocol 
networks nevertheless our payphone real estate 
and customer base generates signiﬁ cant cash and 
provides a launch pad for new initiatives 
as described further below 
operational highlights
 company has delivered on ipo strategy
  internet business growing rapidly now with over 1200 units from under 
200 in june 2004
 spectrum now operates over 8900 payphones up 14 from june 2004
  new products introduced including integrated atm with payphone and instant 
digital photo kiosks
  acquisition of ipn assets in august 2004 added 750 new payphones to the 
company’s asset base
  acquisition of uk explorer – a leading operator of internet terminals in airports 
and hotels – in february 2005 making spectrum one of the largest independent 
operators of internet terminals in europe
mark lewarne 
chief executive  
0spearf05indd   sec18 18102005   152551 9 report and accounts 2005 spectrum interactive plc
strategic outlook 
the company will continue the strategy clearly laid 
out within the ipo prospectus