28/08/2007 - 13:16

Amcom's net profit up 26% on back of growth initiatives

28/08/2007 - 13:16

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Perth-based Amcom Telecommunications Ltd has announced a 26 per cent increase in net profit to $4.1 million, increasing its dividend to 0.5 cents fully franked for the 2006-07 financial year.

Amcom's net profit up 26% on back of growth initiatives

Perth-based Amcom Telecommunications Ltd has announced a 26 per cent increase in net profit to $4.1 million, increasing its dividend to 0.5 cents fully franked for the 2006-07 financial year.

 

 

The full text of a company announcement is pasted below

Amcom announces a 26% increase in the underlying net profit after tax to $4.1m and an increase in dividend to 0.5 cents fully franked for the financial year ended 30 June 2007.

The reported net profit after tax for the financial year ended 30 June 2007 was $7.9m (2006:$4.8m).

This result includes equity accounted earnings from 20% owned iiNet Limited of $4.6m and a once off derivative loss after tax of $0.7m arising from the conversion of the Futuris loan to equity in the company in November 2006. The underlying net profit after tax is before equity accounting and derivative adjustments.

Amcom's earnings growth has accelerated in 2007 as the Company begins to benefit from its strategic growth initiatives and cost control.

Newly appointed CEO Mr Clive Stein reported that 2007 has been a year of substantial achievement, we can now see early positive signs of investment decisions taken to diversify revenue streams and provide effective telecommunication solutions to our clients.

Over the 2007 financial year our strategic initiatives have delivered the following positive outcomes:

  • profitable growth in the Amnet broadband business
  • completion of the Adelaide metropolitan fibre infrastructure
  • new products and technology
  • acquisition of the Peopletel fibre business in Perth
  • 20% stake in iiNet Ltd

Our ability to gain a meaningful presence in Adelaide, build on our fibre customer base and be a significant provider in the DSL broadband space will provide the momentum for 2008 earnings growth, commented Mr Stein.

Despite competitive market pressures, the Fibre Division increased revenue in 2007 by 12% to $25.6m and recorded and an increase in EBITDA of 12% to $11.2m.

The Amnet Division continued the excellent performance that was reported in the first half of 2007.

Amnet increased its subscriber numbers by 43% to 13,950. This enhanced base has provided critical mass to turn the division s result from an EBITDA loss of $0.2m in 2006 to a positive EBITDA of $1.3m. The revenue grew by 30% to $10.9m and the momentum gathered will see Amnet continue to perform strongly.

Highlights

Net profit after tax (reported) $7.9m 66%
Underlying net profit after tax $4.1m 26%
Revenue $36.7m 17%
EBITDA $10.4m 24%
Dividend 0.5 c 33%
Operating cash flow $11m 32%

Net debt was reduced to $7.2m at 30 June 2007, compared to $20.7m at 30 June 2006. Balance sheet gearing was reduced to 8% from 26% over the same period.

Shareholder returns

During the year, shareholders received a final 2006 dividend of 0.375 cents per share fully franked.

Shareholders (excluding Futuris Corporation Limited) were also issued with a free 1 for 1 bonus share option in November 2006. These options are exercisable at 17 cents per share up until 31 December 2009. These options are also listed on the ASX under the code AMMO.

For 2007 the Directors have declared a final dividend of 0.5 cents per share fully franked.

In determining the amount of this dividend the Directors have resolved to passing on the benefit of the iiNet Limited dividend payment to Amcom shareholders as well as the distribution from the profits of the Amcom business.

The final 2007 dividend will be paid on 9 November 2007, to shareholders registered on the book as of 23 October 2007.

Board Change

Mr Andy McLean has advised that he intends to retire from the Board at the Annual General Meeting in order to pursue other business interests. Mr McLean was a founder of the company and has been a director since 2000. Andy has made a significant contribution to the development of the company over an extended period of time. On behalf of the company, thank you for your dedicated service said Chairman Mr Tony Grist. The Board is seeking to fill the vacancy with an independent non executive director who can complement the existing Board composition.

Outlook

Management expect that the Company will maintain its double digit growth in its Underlying net profit after tax. The results to date for 2008 are ahead of last year, with new customer connections significantly higher than last year.

The continued growth in the resources sector will underpin Amcom s revenue growth for several years. The Company is well placed to leverage its high speed network infrastructure advantage to meet the growing IT needs of the sector.

We will up-date our outlook at the forthcoming Annual General Meeting.

Attached to this announcement are the Review of Results and Operations for 2007 and the Appendix 4E Preliminary Final Report. The 2007 investor presentation materials relating to this profit announcement can be downloaded from the Announcements section of our website or from the ASX website.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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