MONDAY, JUNE 25: KeyTech Limited announced it had a profit of $7.2 million for the year ending March 31, 2012.

This represents nearly a 10 per cent increase over the $6.6 million profit recorded for 2011.

Sheila Lines, KeyTech CEO, said:  “Despite continued weak economic conditions affecting group revenue, 2011/12 was a year in which we tangibly advanced our strategies as a group of companies with the facilities and breadth to meet and exceed the global and local communication needs of our customers.

“In the corporate segment BTC completed our rebuild of Bermuda’s Hamilton network, branded “PRISM”, to a full Ethernet network using CISCO technology.

“In the residential market BTC launched eight and 10 megabyte per second DSL.

“In the Cayman Islands we completed our fiber network in George Town.

Internationally Logic established a network point of presence in London, in addition to existing points of presence in New York, Miami, Bermuda and the Cayman Islands.”

Profit for the year includes a $10.5 million gain on the disposal of M3 Wireless and the acquisition of a 42 per cent interest in CellOne in May 2011, $8.9 million of additional amortization expense due to revised estimates of future cash generation and useful life of a number of tangible and intangible assets, and $3 million in staff termination costs.

Operating revenues in 2011/12 declined $5.1 million versus the prior year. However, of this decline $3.4 million arose on hardware and software revenues with a corresponding decline of $2.4 million in cost of goods sold expenses.

This revenue decline reflects KeyTech’s previously announced strategic shift from the sale of software and hardware to increasing the focus on recurring communications revenues.

Excluding hardware and software revenues, total operating revenues declined $1.8 million in 2011/12 due to a $2.3 million decline in residential wire-line revenues partially offset by growth in data and international capacity revenues.

Total operating expenses increased $1.3 million primarily due to one-off amortization expense charges in the year.

Salaries and employee benefit expenses declined $3.6 million due to restructuring of the group’s business model. Staff termination costs were

$3 million, $1.4 million lower than the prior year. Depreciation and amortization expenses increased $4.7 million. Included in total operating expenses is $5.5 million in additional tangible fixed asset and inventory amortization and impairment charges.

The next phase of BTC’s network investments will be higher speeds to the home. Ms Lines said:  “We have been working with vendors to develop detailed plans for both VDSL and fiber to the home. In the coming fiscal year we expect to commence execution of specific deployment plans.”

In January 2012 Logic Cayman was granted an Internet Protocol Television (IPTV) license. IPTV is used by telecommunications companies around the world, including BT, Verizon and AT&T, to deliver content services in competition to Cable TV companies — the triple play offers voice, data and content.

“We intend to offer a triple play in Cayman over a fiber residential network and we have commenced construction of this residential network. We expect the first phase to be in service in our 2012/13 fiscal year.”

Share of income of associates for the year were $3.2 million as compared to $1.9 million for the prior year. The increase is due to the addition of CellOne as an associate from May 2011 and improved results from QuoVadis following growth in European certificate revenues.

Total cash dividends paid to common shareholders for the current and prior year was $0.48 per common share.

The record date for attendance at the 2012 Annual General Meeting is July 2, 2012. The 2012 Annual General Meeting will be held at 4pm on Friday, July 27, 2012.