Business telecoms firm Thus yesterday said the integration of two recent acquisitions was on track as it reported a rise in earnings.

Thus, which owns the Demon internet brand, said total revenues for the group were up three per cent to £372.1 million, while revenues for continuing operations rose nine per cent to £350 million for the year to March 31.

Operating losses were reduced by 45 per cent to £20.8 million and the firm said trading for the current year was in line with expectations.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were £39.5 million, up from £37.8 million a year ago.

Glasgow-based Thus said it had completed the sale of its Demon business in the Netherlands to Dutch telecoms group KPN for £47 million. The sale was part of the firm's drive to concentrate on the UK business telecoms market.

The integration of business-based communications carrier Your Communications and internet service provider Legend Communications acquired in February was underway, Thus said.

Electricity provider United Utilities sold Your Communications to Thus in a deal valued at £58.8 million that gave it 22.5 per cent control of Thus. The firm said it won several new contracts during the year, including with Archant, the Audit Commission, Manchester City Council and Scottish Media Group.

Demon broadband growth soared 20 per cent to 110,000 UK customers.

Chief executive William Allan said: "This has been an exciting year for Thus as the pace of transition from legacy services to next generation services accelerated."

He added: "Our focus for the next twelve months within the enlarged group will be delivering the integration of the two acquisitions."

Matthew Pearson, analyst at Investec Securities, said the figures provided no real surprises and highlighted the firm's ability to deliver solid cash generation.

"Thus has delivered solid full-year results," he said. "Its acquisitions are being integrated ahead of expectations raising confidence in cost synergies."

The company surprised the City last year with a bid to snatch rival Energis from buyer Cable & Wireless, although this was rejected by Energis.

Thus has been seen as a takeover target.

Shares closed up 3 at 131p.