Telecommunications firm Alternative Networks is on the right lines after it lifted earnings substantially last year and rewarded shareholders with a bumper dividend.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in the year to 30 September rose 26% to £12.14m from £9.64m the year before, while underlying profit before tax climbed 28% to £11.60m from £9.07m.

Turnover improved by 7% to £96.24m from £89.68m. Organic revenue growth, excluding recent acquisition AKJ, was 4% year on year.

Broker finnCap said the turnover figure was 1% ahead of forecasts while EBITDA was 6% better than predicted.

Mobile subscribers increased by 12% to 62,136 from 55,299 at the end of September 2009, while fixed line customers grew 18% to 79,862 from 67,587. In the second half of its financial year revenues were 12% higher than a year earlier.

"We are rapidly becoming a leading mobile systems and data integrator and the strategy we have put in place, combining organic growth with high quality acquisitions, is supporting this objective. One of the most important aspects of this performance has been our increasing ability to cross sell a greater number of products to a client base whose spend is also growing," said chief executive officer James Murray.

Net cash funds increased to £11.1m at the end of September from £8.1m a year earlier.

"We have started the current financial year strongly, continuing the momentum that became apparent in the second half of last year. Demand for our products is growing and market conditions are stabilising, giving us confidence that our strategy will deliver long term value," Murray added.

As a measure of that confidence the company has lifted its full year dividend per share from 5.1p last year to 6.1p this year, on top of which it is to pay a special dividend of 3p.

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