Amcom profit hit by resources

20/02/2015 - 15:19

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Perth-based Amcom Telecommunications has posted a 16 per cent slide in half-year profit to $9.3 million on the back of a fall in revenue from its IT services business.

Amcom chief executive Clive Stein.

Perth-based Amcom Telecommunications has posted a 16 per cent slide in half-year profit to $9.3 million on the back of a fall in revenue from its IT services business.

The company reported a 3 per cent slide in revenue to $80.7 million, however, excluding the performance from its IT services division, revenue was 10 per cent higher at $67.3 million.

“The company’s core data networks business continued to perform strongly with a 13 per cent increase in revenue with consistent EBITDA margins,” Amcom said in a statement.

“Hosted and cloud services revenue was up 9 per cent to $17.4 million over the prior period. IT services revenue was down 39 per cent, impacted by the resources sector downturn in Western Australia.”

Chief executive Clive Stein said while the headline revenue and profit were down, the fundamentals of the business remained strong.

“Our core data network annuity business increased revenue by 13 per cent,” Mr Stein said.

“Our recurring revenue base grew to $125 million, an 8 per cent increase on the previous period. This is an important indicator pointing to continued earnings growth for the company going forward.”

The company declared an interim dividend of 5 cents per share, fully franked, however, a dividend reinvestment plan had been suspended due to the proposed scheme of arrangement with Vocus Communications.

Amcom chairman Anthony Grist said the company declared a dividend because it had available profits and was in an adequate cash position.

“We raised capital during 2014 primarily for acquisition purposes. However, as a result of recent events and the board’s view of our future funding requirements, we felt the prudent action from a capital management perspective was to enhance returns to shareholders via a fully franked dividend,” he said.

In December, Sydney-based telecommunication services company Vocus bought Amcom for $652.7 million, taking the remaining 90 per cent of Amcom shares it didn’t already own.

Vocus also released its half-year profit report today, posting a 54.3 per cent rise in underlying net profit to $8.9 million, and a 41.6 per cent increase in revenue to $62.7 million.

Amcom shares closed 0.37 per cent higher at $2.71 per share.

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