Final Results

Maintel Holdings PLC
12 March 2007



Maintel Holdings Plc


Preliminary results for the year ended 31 December 2006

Maintel Holdings Plc, the telecoms services company, announces preliminary
results for the year ended 31 December 2006.

Financial highlights

Turnover up 33% to £16.166m (2005: £12.197m) with underlying growth across the
group, supplemented by £1.1m London Probation Board VoIP contract announced in
February 2006

Voice and data division gross profit grown by 38% over 2005

Profit before tax and amortisation of goodwill up 16% to £2.202m (2005: £1.904m)

Earnings per share before amortisation of goodwill up 24% to 12.4p (2005:
10.0p). After amortisation, earnings per share increased by 14%, to 11.4p (2005:
10.0p)

Interim dividend of 2.1p per share paid in September; final dividend of 2.9p per
share proposed

Cash balances at year-end of £2.234m (2005: £3.625m), after acquisition of
District Group for net £877,000, share buy-backs costing £832,000 and dividend
payments of £591,000

Operational highlights

Investment in sales and account management resulting in increased equipment
sales including large scale VoIP equipment sales into existing customers
including the London Probation Board project

Enhanced network services portfolio has resulted in significant growth in the
voice and data division

Contracted maintenance revenues running at record levels, following the signing
of a number of larger new contracts, and the acquisition of District Holdings
Limited

Efficient integration of District Holdings Limited, acquired in June 2006

John Booth, Chairman, said:

'Our planned focus on top line sales has boosted turnover and contributed to
strong earnings per share growth for the year. 2006's investment in sales and
engineering capacity, combined with the District acquisition enable us to embark
with confidence on 2007 as a larger and stronger presence in our industry.'


For further information please contact:


Tim Mason, Chief Executive             020 7401 4601
Dale Todd, Finance Director            020 7401 0562
Chairman's statement



In 2006 our focus on building turnover has been successful. It is pleasing to
report top line growth of 33% to £16.2m (2005: £12.2m). Profit before tax and
amortisation of goodwill increased by 16% to £2.2m from £1.9m and earnings per
share before amortisation of goodwill increased by 24% to 12.4p (2005: 10.0p).
Our profit margin before interest and goodwill amortisation reduced from 14.4%
to 12.8% reflecting increased investment in our sales and engineering teams,
lower profitability of certain larger contracts won and the addition of lower
margin, bolt-on services in our voice and data business.

Maintel Europe, our maintenance and equipment division, grew turnover by 19%
with equipment sales growing by 57%. Highlights of this growth were our work for
the London Probation Board and a number of other sizeable new clients, and the
acquisition at mid-year of District Holdings Limited. This boost to turnover
required increased investment in sales capacity, and the expanded team continues
to perform well. We are also adding to our engineering resources, reinforcing
our nationwide presence and further strengthening our capabilities, especially
on Nortel products.

Maintel Voice and Data's turnover grew by 57% to £3.4m with gross profits up
38%. Our increased sales capacity now enables us to offer network services to
all appropriate existing customers and we have further expanded the range of
products offered. Customer churn in this business remains satisfactorily low.

Our cash balances remain healthy at £2.234m (2005: £3.625m), having spent
£591,000 on dividend payments and £832,000 on share buy-backs during the year
and £877,000 net on the acquisition of District Holdings Limited. We are
proposing a final dividend for 2006 of 2.9p per share, up from 2.5p in 2005 and
giving a total for the year of 5p (2005: 4p), an increase of 25%.

Future prospects

Maintel's engineering team has consolidated its nationwide reach and has the
capacity to service further new business wins. Our recent appointment as Nortel
Gold Partner recognises our expansion in this key growth area and positions us
well for the future. We expect margins to rebound gradually during 2007 as
capacity is utilised efficiently and further economies of scale are realised.

The industry continues to consolidate and our recently completed acquisitions of
Pinnacle and District Holdings demonstrate our ability to identify value
enhancing non-organic growth opportunities and integrate these quickly and
smoothly. We will continue to seek out appropriate acquisitions as well as
pursuing the steady organic growth that our sales team achieves day to day.

During 2006, we introduced a SIP scheme to enable employees to buy shares in the
Company in a tax efficient way. The early signs are encouraging and I am pleased
to welcome our new shareholders.

Finally, and on behalf of our Board and shareholders, I would like to thank all
our staff for their energetic commitment to the business in 2006.




J D S Booth
Chairman


9 March 2007



Business review

I am pleased to be able to report that Maintel has achieved further growth
during 2006, with profit before tax and before amortisation of goodwill
increasing by 16% to £2.2m, and earnings per share before amortisation of
goodwill by 24%, from 10.0p to 12.4p.

Following on from the revenue growth reported for the first half of the year,
this has continued in the second half, so that 2006 revenues were 33% ahead of
2005, at £16.2m. As noted in the interim statement, equipment sales have
contributed substantially to this growth, with one particular contract - the
London Probation Board ('LPB') - contributing £1.13m of this, albeit at lower
than normal margins. The acquisition of District Holdings Limited in June
contributed revenues of £845,000 and the voice and data division also grew
strongly in the year, increasing revenues by 57%, from £2.1m to £3.3m, including
£53,000 of the District revenue.

Cash flow from operating activities also continued to be strong, at £1.6m. Cash
balances remained healthy at year-end, at £2.2m (2005 - £3.6m), after the
acquisition of District for £877,000 net cash payment, the use of £832,000 to
buy back shares in the Company and £591,000 of dividends paid.

Operating structure

Maintel operates through two principal subsidiaries, Maintel Europe Limited and
Maintel Voice and Data Limited.

Maintel Europe provides maintenance, service and support of office-based voice
and data equipment across the UK on a contracted basis. It also supplies and
installs new and reconditioned voice and data equipment to maintenance
customers.

Maintel Voice and Data operates a telecommunications traffic business which
re-sells a portfolio of products including minutes, line rental and
non-geographic numbers primarily to Maintel Europe's existing maintenance
customers and selected non-maintained customers.

District Holdings Limited was acquired during the year. District's marketplace
is very similar to Maintel's and, whilst its results are separately reported
below, its operations were integrated with Maintel's two trading divisions
during the year and the combined results will be reported in future periods.

Maintel Europe

The division grew its revenue by 19% in the year, to £12.1m. As shown below, the
value of the maintenance base lifted slightly during 2006, with significant
growth coming from robust equipment sales - up 57% on 2005 - following an
increase in equipment sales resource and the benefit of the £1.3m LPB contract,
together with significant sales to a number of other major clients. The second
half of 2006 proved particularly successful with an increased aggregate turnover
of 20% over the first half of the year, including £600,000 more LPB revenue in
the second half than in the first. As we expanded our account management team,
sales into our customer base improved, with a large amount of projects
completing in the last two months of the year.

Revenue analysis (£000)                                    2006           2005
Maintenance related                                       7,693          7,375
Equipment, installations and other                        4,373          2,783
Total Maintel Europe                                     12,066         10,158

Maintenance revenues, the bulk of which are underpinned by contracts of at least
a year in length, amounted to £7.7m (2005 - £7.4m) representing 64% (2005 - 73%)
of the division's total revenues, the reduction in this percentage being due to
the change in the sales mix resulting from the high levels of equipment sales in
2006.

As anticipated in the interim report, there was a reduction in gross margin in
the year, from 43% to 38%, which was expected due to the signing of certain
larger contracts, including LPB, which contribute lower levels of profitability.
The conscious drive to secure Nortel contracts as these become more accessible
was highlighted as a strategy last year and this has been highly successful,
though has also contributed to the margin reduction, maintenance of Nortel
products initially being less profitable than the rest of the existing portfolio
as a whole. We have also invested heavily in Nortel engineers to give us the
critical mass to be able to offer a robust nationwide service and to achieve the
status of Nortel Gold partner. This has particularly impacted on margin in the
second half of the year, but will have a reducing impact in 2007 as utilisation
of the additional resource improves. The Group's investment in the Nortel
product was rewarded, however, with the LPB project being awarded Nortel's 'Best
Convergence Solution' in October 2006.

Given the cross training of engineers, and their time being spent on both
maintenance and installation work, it is not practical to quote definitive
margin data on different business sectors, however estimated management figures
are used to monitor results internally. Net margin reduced in line with gross
margin, but remained a healthy 12.6% (2005 - 16.9%).

Whilst central administration costs remained tightly under control, the sales
and engineer headcount was expanded during the year, the cause and consequence
of the increased revenue:

Average headcount during the year                           2006         2005
Sales and marketing                                           54           44
Engineers                                                     72           63

The ongoing development of the VoIP (Voice over Internet Protocol) market
continues to provide a considerable array of new opportunities although, as
noted last year, customers' acceptance of the new technologies moves at varying
rates, so that legacy systems will continue to be serviced for some time to
come. Cross training of engineers and recruitment of engineers with leading edge
skills to accommodate this scenario continues. The company's move into IT
provision and support continues well with contract wins in both the public and
private sector, and Maintel can now provide a seamless service for complex voice
and data installations.

It continues to be our intention to purchase suitable maintenance bases at
sensible prices as and when the opportunities arise, and integrate these into
the existing infrastructure, as was successfully achieved by the acquisition of
District during the year. For example, the acquisition, for no consideration, of
a base of mostly Panasonic customers in Yorkshire was completed in February
2007, and other similar acquisitions are being sought.

Maintel Voice and Data

Maintel Voice and Data saw significant growth during 2006, with revenues of
£0.9m in the first half of 2005, to £1.2m in the second half, to £1.5m in the
first half of 2006, to £1.8m in the second half of 2006, this in spite of a fall
in call selling rates over the period. As expected, this growth has come from a
broadening of the division's product offerings, as shown below:

Revenue analysis (£000)                                   2006            2005
Call traffic                                             2,446           1,969
Line rental                                                586              87
Other                                                      327              90
Total Maintel Voice and Data                             3,359           2,146

Also as expected, the division's gross margin as a percentage of revenue has
reduced, to 30% (2005 - 34%), with the addition of lower profit products, line
rental margin being around half that of call traffic, for example. Gross profit
was, however, up 38% over 2005, at £1.0m (2005 - £724,000) - the anticipated
benefits of being able to offer a more comprehensive telecoms package are being
seen, with more customers taking more than one service from Maintel.

Again, costs remain closely monitored, though the revenue growth and spread of
products has required some additional sales and administrative resource to be
added. Commission payments of around £90,000 have been saved in the period
following the acquisition of Pinnacle - the previous recipient of these - in
December 2005. The second and final tranche of consideration in respect of the
acquisition of Pinnacle was made in December 2006, and amounted to £147,000.

Attrition remained low in 2006, with no major customers leaving, reflecting the
realistic pricing and reliable service provided by the company; it is likely,
however, that a major customer will leave during 2007 due to it having been
acquired, although this is one of the company's lower margin customers.

The target market remains SMEs, however we are seeing opportunities arise in
providing some of our larger maintenance customers with a one stop shop
solution, and will tailor our offerings to such opportunities subject,
naturally, to overall contract profitability.

District Holdings

The District group was acquired on 12 June 2006, for £1.060m including costs;
£183,000 of cash was acquired with the group, so that the net cash cost was
£877,000, which was satisfied out of existing cash resources. The group operates
in virtually identical markets to Maintel, but adds another product offering -
Samsung - to the Maintel portfolio.

The District acquisition provided a fresh base of over 400 established
customers, billing over £750,000 per annum in maintenance revenues, into which
to sell additional services, whilst increasing the recurring revenue platform of
the Group. District had one significant voice and data client, billing around
£180,000 per annum and this contract is now being managed by Maintel Voice and
Data. Otherwise, the customers represent a potentially lucrative stream of new
call traffic business. The integration of District's other operations into
Maintel was also completed promptly and efficiently and the bulk of the business
will transfer to Maintel Europe from 1 January 2007.

In its previous financial year, to 31 August 2005, the District group reported
revenues of £1.636m and a profit before tax of £4,000. District's directors left
the group on acquisition and a range of other synergies was achieved from
integration of the two organisations' operations, such that we are able to
report revenues since acquisition of £845,000 and profit before tax of £263,000.
The District group's remaining property leases expired at the end of 2006, so
further cost savings of around £35,000 per annum are expected going forward in
respect of these.

Central costs

As already noted, the group has continued to tightly manage central costs and we
are encouraged that administrative expenses, excluding District costs, have
increased by only 8% to £1.842m (2005: £1.712m). In addition to future rent
savings, there will be further synergies in amalgamating various District
administration overheads with those of Maintel.

Administrative expenses (£000)                                2006       2005
Sales expenses                                               1,878      1,544
Other administrative expenses (excluding Goodwill
amortisation)                                                1,842      1,712
District sales and admin costs                                 211          -
Total administrative expenses                                3,931      3,256

Taxation

The group previously benefited from a degree of marginal relief on the profits
of Maintel Voice and Data, however its profits now mean that it is taxed at 30%,
with disallowable deductions taking the effective underlying rate of the
pre-District Maintel group above that figure.

Tax losses of approximately £215,000 were acquired on the acquisition of
District, and around £165,000 of these have been used post acquisition, with a
consequent tax benefit on the Group accounts of £49,000 when calculated at 30%.
Around £50,000 tax losses are therefore available for carry forward to 2007,
however as these have not yet been agreed with HM Revenue & Customs they are not
treated as a deferred tax asset in the accounts.

Dividends

A final dividend for 2005 of 2.5p per share (£323,000 in total) was paid on 24
April 2006, and an interim 2006 dividend of 2.1p per share (£268,000) was paid
on 29 September 2006.

It is proposed to pay a final dividend of 2.9p in respect of 2006, subject to
shareholder approval at the AGM, and payable on 25 April to shareholders on the
register at the close of business on 23 March. In accordance with FRS 21, this
dividend is not accounted for in the financial statements for the period under
review as it had not been committed to pay it as at 31 December 2006.

Purchase of own shares

Further to the authority granted at the last AGM, the Company repurchased and
cancelled 480,000 of its own shares during 2006, at prices between 141p and
180p, at a total cost of £832,000. The share price at 31 December 2006 was 194p.

Cash flow

At 31 December 2006 the group had cash and bank balances of £2.234m (2005 -
£3.625m), all of it unrestricted. Net cash inflow from operating activities in
the year was £1.635m, after the acquisition of District for £877,000 net cash,
the use of £832,000 to buy back shares in the Company, £603,000 corporation tax
paid, £591,000 in dividends and the second tranche payment in respect of
Pinnacle Voice and Data of £147,000.

The group invests its surplus cash in high interest, low risk accounts or funds.

IFRS (International Financial Reporting Standards)

The directors will adopt IFRS reporting with effect from 1 January 2007.

The main effect of IFRS reporting on the Group will be the creation and
amortisation of intangible assets in lieu of the existing goodwill arising on
the acquisition of the District group.

Outlook

2006 saw a significant increase in turnover, and a gearing up of technical and
sales infrastructure to cope with it, particularly in the Nortel marketplace.
Following additional investment in the first quarter, the board's objective
during 2007 is to grow revenues further, leveraging the existing infrastructure
to the extent possible, with a view to increasing overall margin percentages as
well as revenues. Given the extent of the investment at the end of 2006 and
beginning of 2007, it is not expected that profitability will improve
significantly in the first half.

The focus remains on developing the Group's maintenance base through organic
growth and acquisition, leading to sales of additional products and services
into that base.

Finally, I am pleased to report that Maintel has been awarded Gold partner
status with Nortel which will allow further penetration into this important
market sector.




Tim Mason
Chief Executive


9 March 2007



Maintel Holdings Plc

Consolidated profit and loss account
for the year ended 31 December 2006
                                                          2006            2005
                                                         £'000           £'000
Turnover
------------------------------                         ---------       ---------
Existing operations                                     15,321          12,197
Acquisitions                                               845               -
------------------------------                         ---------       ---------
                                                        16,166          12,197

Cost of sales                                           10,167           7,188
                                                       ---------       ---------

Gross profit                                             5,999           5,009

Administrative expenses
------------------------------                         ---------       ---------
Goodwill amortisation                                      122               -
Other administrative expenses                            3,931           3,256
------------------------------                         ---------       ---------
                                                         4,053           3,256
Operating profit
------------------------------                         ---------       ---------
Existing operations                                      1,683           1,753
Acquisitions                                               263               -
------------------------------                         ---------       ---------
                                                         1,946           1,753

Interest receivable                                        135             153
Interest payable and similar charges                        (1)             (2)
                                                       ---------       ---------
Profit on ordinary activities                            2,080           1,904
before taxation
                                                       ---------       ---------
Taxation on profit on                                      621             577
ordinary activities
                                                       ---------       ---------
Profit on ordinary activities                            1,459           1,327
after taxation                                         =========       =========

     
Earnings per share
Basic and diluted (note 3)                                11.4p           10.0p
                                                       =========       =========



The profit and loss account contains all gains and losses recognised in the year
and all amounts relate to continuing operations other than as indicated above.



Maintel Holdings Plc

Consolidated balance sheet
as at 31 December 2006

                                   2006        2006        2005           2005
                                  £'000       £'000       £'000          £'000
Fixed assets
Intangible assets                             1,217                        227
Tangible assets                                 238                        240

Current assets
Stocks                              705                     585
Debtors                           2,890                   1,947
Cash at bank and in hand          2,234                   3,625
                                 --------                --------

                                  5,829                   6,157
                                 --------                --------
Creditors: amounts                2,451                   2,085
falling due within one year
                                 --------                --------

Net current assets                            3,378                      4,072

Deferred income                              (3,149)                    (2,891)
                                             --------                   --------

Net assets                                    1,684                      1,648
                                             ========                   ========

Capital and reserves
Called up share capital                         124                        129
Share premium                                   628                        628
Capital redemption reserve                       12                          7
Profit and loss account                         920                        884
                                           ----------                 ----------

Shareholders' funds - equity                  1,684                      1,648
                                           ==========                 ==========




Maintel Holdings Plc

Consolidated cash flow statement
for the year ended 31 December 2006

                                                           2006          2005
                                                          £'000         £'000

Reconciliation of operating profit to net
cash inflow from operating activities

Operating profit                                          1,946         1,753
Goodwill amortisation                                       122             -
Depreciation charge                                         136           143
Loss on disposal of fixed assets                              5             -
Decrease in stocks                                           12            51
(Increase)/decrease in debtors                             (671)          132
Increase/(decrease) in creditors                             85          (299)
                                                        ---------     ---------
Net cash inflow from operating activities                 1,635         1,780
                                                        =========     =========

Cash flow statement
---------------------
                                                
Net cash inflow from                                      1,635         1,780
operating activities

Returns on investments and
servicing of finance
Net interest received                                       134           151

Taxation
Corporation tax                                            (603)         (494)

Capital expenditure and financial
investment
Payments to acquire tangible                               (110)         (119)
fixed assets

Acquisitions and disposals
Purchase of subsidiary undertakings                      (1,207)         (352)
Net cash acquired with subsidiary undertaking               183           124

Equity dividends paid                                      (591)         (196)

Financing
Repurchase of own shares for cancellation                  (832)         (680)
                                                       ----------    ----------
(Decrease)/increase in cash in the year                  (1,391)          214
                                                       ==========    ==========



Maintel Holdings Plc

Consolidated cash flow statement
for the year ended 31 December 2006 (continued)

Reconciliation of net cash flow to movement in net cash

                                                            2006          2005
                                                           £'000         £'000

(Decrease)/increase in cash in the year                   (1,391)          214

Net cash at 1 January 2006                                 3,625         3,411
                                                         ---------     ---------
Net cash at 31 December 2006                               2,234         3,625
                                                         =========     =========





Maintel Holdings Plc

Notes to the preliminary statement

1.   The abridged financial information set out above has been extracted from
financial statements approved by the directors on 9 March 2007, which received
an unqualified report by the Company's auditors, and which will be delivered to
the Registrar of Companies following the Company's annual general meeting. The
financial information does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985, and has been prepared on the basis of the
accounting policies set out in the financial statements for the year ended 31
December 2005.

2.   Segmental analysis
                                                            2006          2005
                                                           £'000         £'000
Turnover

Telephone system maintenance and equipment sales          12,827        10,094
Telephone network services                                 3,339         2,103
                                                         ---------     ---------
                                                          16,166        12,197
                                                         =========     =========
Gross profit

Telephone system maintenance and equipment sales           5,038         4,313
Telephone network services                                   961           696
                                                        ----------    ----------
                                                           5,999         5,009
                                                        ==========    ==========
Profit before taxation

Telephone system maintenance and equipment sales           1,799         1,691
Telephone network services                                   403           213
                                                        ----------    ----------
                                                           2,202         1,904

Goodwill amortisation                                       (122)            -
                                                        ----------    ----------
                                                           2,080         1,904
                                                        ==========    ==========
Net assets

Telephone system maintenance and equipment sales           1,677         1,625
Telephone network services                                     7            23
                                                        ----------    ----------
                                                           1,684         1,648
                                                        ==========    ==========

3.   Earnings per share

Earnings per share have been calculated using the weighted average number of
shares in issue during the period. This and earnings, being profit after tax,
are as follows. An adjusted earnings per share figure - excluding the
amortisation of goodwill - is also shown in order to provide a clearer picture
of the trading performance of the Group.

                                                              2006        2005
                                                             £'000       £'000

Earnings used in basic and diluted EPS, being profit         1,459       1,327
after tax

Goodwill amortisation                                          122           -
                                                           ---------   ---------
Adjusted earnings, being profit after tax, before
goodwill amortisation                                        1,581       1,327
                                                           =========   =========
Weighted average number of shares                           12,783      13,232
                                                          ==========  ==========

Adjusted basic and diluted                                    12.4p       10.0p
============================                              ==========  ==========


The weighted average in 2006 has been adjusted for the purchase of the Company's
shares noted below. There are no share options in existence which would result
in a dilution to basic earnings per share.

4.   Purchase of own shares

During 2006, and pursuant to the authority granted to it at its annual general
meeting in April, the Company repurchased 480,000 of its own ordinary shares of
1p each, at prices between 141p and 180p, at a total cost of £832,000. These
shares were subsequently cancelled.

5. Dividends

A final dividend of 2.9p per share is proposed, subject to shareholder approval
at the AGM. In accordance with FRS 21, the proposed interim dividend is not
shown in the financial statements for the period under review as it had not been
resolved to pay it as at 31 December 2006. No dividend was paid in the six
months to 30 June 2005.

                                                          2006            2005
                                                         £'000           £'000
Dividends paid
                                       
Interim 2005, paid 26 September 2005
     - 1.5p per share                                                      196
                                            
Final 2005, paid 24 April 2006
     - 2.5p per share                                      323
                                           
Interim 2006, paid 29 September 2006
     - 2.1p per share                                      268   
                                                       ---------       ---------
                                                           591             196
                                                       =========       =========
                                             

6. Acquisition

On 12 June 2006 the Company acquired 100% of the issued share capital of
District Holdings Limited. The consideration of £1,060,000 (£877,000 net of cash
acquired), including £35,000 of professional costs and stamp duty, was fully
satisfied in cash. Based on the acquisition balance sheet, as amended for fair
value adjustments, goodwill of £965,000 has been capitalised.

7. Statement of movement in reserves

                                            Capital                 Profit and 
                                         redemption                       loss
                                            reserve                    account
                                              £'000                      £'000
                                
At 1 January 2006                                 7                        884
Profit for the period                             -                      1,459
Dividend                                          -                       (591)
In respect of purchase
of own shares                                     5                          -
Appropriated in respect
of purchase of own
shares                                            -                       (832)
                                            ---------                  ---------
At 31 December 2006                              12                        920
                                            =========                  =========


8.      The annual report and accounts will be posted to shareholders on 28
March 2007 and copies will also be available on request from the Company's
registered office at 61 Webber Street, London SE1 0RF.





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