August 10, 2017 / 6:54 AM / 10 months ago

UPDATE 2-United Internet says no new deals imminent as it cuts sales outlook

* CEO says no concrete acquisition targets currently

* Shares down 2.3 percent (Releads with CEO comments)

By Georgina Prodhan

FRANKFURT, Aug 10 (Reuters) - Germany’s United Internet said on Thursday it had no immediate plans for new acquisitions after the web services provider reported quarterly sales and operating profit that fell short of expectations and cut its full-year sales outlook.

Chief Executive Ralph Dommermuth said the company’s focus would be on integrating two new acquisitions, budget mobile firm Drillisch and internet hosting provider Strato.

“We’ve done a lot of acquisitions in the past few years. Now we have to pay more attention to day-to-day business and the integration of Drillisch and Strato,” he told Reuters in a telephone interview.

No new deals were imminent, he said. “It depends what comes onto the market but we have no concrete targets at the moment.”

He said, however, that United Internet may continue to raise minority stakes it owns in companies, which include cable provider Tele Columbus.

“We have various minority stakes, in both listed and unlisted companies. We have always increased those stakes opportunistically and we’ll keep doing that,” he said.

Earlier, United Internet cut its 2017 sales outlook, adjusting for weak first-quarter growth and the sale of its low-margin online performance marketing business to German publisher Axel Springer.

United Internet shares were down 2.3 percent to 50 euros by 1308 GMT.

The company said it now expected 2017 sales growth of 5 to 6 percent, instead of 7 percent, but kept its targets for 12 percent core-profit growth and 800,000 new customer contracts.

United Internet reported organic growth of 210,000 customer contracts in the second quarter and 400,000 in the first six months.

Quarterly sales rose 6 percent to 1 billion euros, short of the 1.04 billion-euro average estimate in a Reuters poll.

EBITDA (earnings before interest, tax, depreciation and amortisation) rose 10 percent to 217 million euros, in line with the poll average, but EBIT that rose 7 percent to 159 million fell short of consensus for 164 million.

“We think post Q2 there may be some profit taking as the results have come in light compared to expectations (after a strong run stock +40% YTD). However, we expect United to remain well supported by the Drillisch transaction,” wrote UBS analyst Vikram Karnany, who rates United Internet “buy”.

United Internet is buying Drillisch, mainly for shares, in an 8 billion-euro ($9.39 billion) deal to complement its own, more upmarket, mobile business and compete better with network operators Deutsche Telekom, Vodafone and Telefonica Deutschland

It is also Europe’s largest web-hosting provider, with brands including 1&1 that compete with Godaddy, and earlier this year bought hosting specialist Strato from Deutsche Telekom for 600 million euros.

$1 = 0.8522 euros Reporting by Georgina Prodhan; Editing by Maria Sheahan and Adrian Croft

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