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Thus, the alternative telecommunications company, gave a bullish profit forecast for the first half as it continued to win lucrative contracts and save costs by integrating recent acquisitions.

The Scotland-based group told its annual meeting that underlying profit for the six months to September 30 would be higher than the first half of 2005.

Bill Allen, chief executive, also told shareholders that revenue for the period would be “not less than £255m”, up 55 per cent on the previous year’s figures, thanks to several large contracts for “new wave” services based on voice-over-internet networks.

Thus announced its latest contract on Friday, a five-year deal with HSBC estimated to be worth about £50m, to replace the bank’s legacy UK domestic national network. Thus shares closed 12½p higher at 133¼p.

The group said the demand for the higher-margin new wave services was compensating for the decline in its traditional business – particularly services that allowed customers to pre-select their telecommunications carriers as well as dial-up internet services and carrying voice calls.

The group also said its integration of Your Communications and Legend Communications, which Thus bought for a combined £70m in February, was ahead of schedule and lifted its forecast annualised cost savings from £25m to £30m.

Thus also said it would report an exceptional gain of approximately £42.6m for its interim results on November 20, thanks to its £47m disposal of Demon Netherland to KPN. It also repaid £30m of debt to cut its net debt from £26.3m on March 31 to an expected £5m.

“This improvement is despite the expected negative operating cash flow in the first half from integration costs, and higher capital expenditure,” said Mr Allen.

Christian Maher, analyst at Investec Securities, said the higher cost-cutting at Thus lessened the chances the group would miss full-year forecasts but warned the sector remained stressed.

“Nothing much has changed in the telecoms market,” he said. “Voice remains under pressure while others, such as Cable and Wireless, are also looking to get into managed services.”

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