Macquarie Telecom has reported revenue up by 5.5% and profit at $5.4 million compared to a loss of $4.3 million "for the prior corresponding period".
Billing itself as "Australia’s data centre, cloud, cyber security and telecom company for mid to large business and government customers", Macquarie Telecom is a clever player and strong competitor in the market.
The company’s USP is its claim that the way it does it is "completely different" from its competitors, and that it provides "the best customer service in Australia".
They’re bold claims but the company is no stranger to running a successful and growing business service customers, as I explained in my article entitled: “VIDEO Interview: Macquarie Telecom’s mission to boldly go and be the best,’ which features a great video interview from early August with Macquarie Telecom founder and chief executive David Tudehope worth watching.
{loadposition alex08}So, Macquarie Telecom has now released its results for the full year ended 30 June with updated guidance, and declared a final dividend of 25cps, fully franked.
Chairman Peter James said “We believe the company is well positioned to drive further shareholder value and ongoing returns.”
The company also announced the resignation of its chief financial officer, and issued a statement which read: “Macquarie Telecom wishes to advise that Stuart Pauly has resigned from his position of chief financial officer effective 5 September 2016. The board thanks him for his contribution and wishes him the best for the future,” with no further detail on why he is leaving at this time.
No doubt the company is already searching for a successor or has one in mind and the position will be filled in due course after replacement CFO candidate considerations are concluded.
So, here are the key points from Macquarie Telecom’s results.
- Full year revenue was up 5.5% to $202.6 million for FY 2016 compared to $192.1 million for the previous corresponding period.
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $32.3 million for FY2016, an increase of $6.0 million or 23% on FY2015 and in line with upgraded guidance.
- Cash flow from operating activities of $39.4 million, an increase of 65% resulting in a closing cash balance of $36.5 million as at 30 June.
- Net profit after tax was $5.4 million compared to a net loss of $4.3m for the prior corresponding period.
- Capital expenditure for FY16 was $18.0 million (FY15: $19.9 million) which includes maintenance capex of $17.3 million (FY15: $14.7 million).
- Second tranche of Intellicentre 2 funds of $3.0 million received on 11 August.
- Final dividend declared of 25 cps, fully franked.
Tudehope said: “The continued focus on providing an outstanding customer service experience has been a major driving force behind Macquarie’s continued profit growth. In July, we launched our brand evolution to reinforce our differentiation and our passion to make a difference in customer experience as measured by our market leading Net Promoter Score. As part of this evolution we have created three new brands around our customers.
"They will be known as: Macquarie Telecom, focused on mid-large sized business customers; Macquarie Cloud Services, focussed on tech businesses and Digi SaaS customers; and Macquarie Government, focussed on cyber security and cloud for government customers.”
Here are Macquarie Telecom’s stated 'priorities in fiscal 2017.’
The company’s focus will include:
- Maintaining industry leading Net Promoter Score greater than +60 across all business segments.
- Telecom will invest in new data networking technology and insourcing network operations to materially reduce costs and further improve service delivery in FY18.
- Hosting will focus on operational service readiness for the Fortune 100 customer at Intellicentre 2 with initial billing to commence in Q3 ramping up during FY18 with full revenue earning capacity in FY19.
- In addition, Intellicentre 4’s capacity will be expanded.
- Leveraging the 42% of the Australian government who trust Macquarie Government, the company plans to further grow government customer revenue in cyber security and secure cloud computing.
Here is Macquarie Telecom’s stated outlook:
- The Company’s EBITDA will continue to grow in FY17.
- Macquarie is confident that hosting revenue will continue to grow in FY17 and as a result it is investing in growth capex.
- Growth capex is expected to be $10 to $11 million for hosting and $6 to $7 million for telecom.
- Business as usual capex is expected to be $17 to $19 million.
- Depreciation is expected to be between $21 and $23 million.
- The company says that an update on its first half performance in fiscal 2017 will be given at its annual general meeting in late November.
