LONDON (AFP) - British mobile telephone operator mmO2 said it would pay a maiden dividend at the end of the current financial year, while dismissing speculation of a possible takeover by Spain's Telefonica.
The news came alongside better-than-expected interim results, which showed pretax profits soared to 239 million pounds (341 million euros, 444 million dollars) in the six months to September from 26 million a year earlier.
The group said it would unveil its first-ever final dividend alongside full-year results in May, which it said was a first step in a policy of "regular, sustainable dividends" driven by underlying growth.
In the medium term the company aims to return 50 percent of its profits to shareholders.
"We are very pleased now to be able to establish a policy of sustainable dividends, earlier than originally expected," said chief executive Peter Erskine. "The group has delivered earnings growth and positive cash-flow, and we believe strongly that shareholders should benefit directly from this."
The interim results showed the group's customer base rising by 15 percent to 22.0 million.
For the six months to the end of September, mmO2 reported a 23 percent rise in turnover to 3.28 billion pounds, beating expectations for 3.20 billion.
Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 37 percent to 851 million pounds, trumping the 818 million consensus figure.
Looking ahead, mmO2 said that despite stiff competition, it expects full year net service revenue growth in Britain to be around 12-15 percent, up from a previous forecast of between seven and 10 percent.
Erskine rejected recent reports in the Madrid press that he held talks with Spanish telecoms giant Telefonica over a takeover of the British operator.
"I talk to all the major players in the telecoms industry -- it's my job to do so -- but no merger has been discussed with anybody," Erskine told reporters on a conference call.
He said that his recent talks with Telefonica had mainly centred on i-mode, Japanese telecoms group NTT DoCoMo Inc's mobile Internet service platform, which mmO2 is considering introducing in Britain.
Erskine said mmO2 is "on track" to have third-generation mobile services available in 20 British cities sometime next year.
11/17/2004 - 14:13 GMT - AFP