Tuesday, 28 July 2020 11:11

Spirit Telecom fourth quarter revenue increases despite ‘harsh economic’ conditions, COVID 19 crisis Featured

Spirit Telecom Managing Director, Sol Lukatsky Spirit Telecom Managing Director, Sol Lukatsky

Australian-listed Internet service provider Spirit Telecom’s fourth quarter 2020 revenue grew 133% year on year to $11.9 million, up from $5.1 million in the same quarter in 2019.

“This is a huge achievement for the company and demonstrates the resilience of the business and value of its recurring revenue streams, customer demand for the Spirit products (including the expanded service offering), contribution from acquisition strategy and skilled acquisition integration (8 over the FY20),” Spirit Telecom said in a statement released on Tuesday.

Spirit Telecom says the results were achieved despite harsh economic conditions and COVID-19 and capped off its “transformational acquisition and development growth strategy for 2020”.

“In a sign of organic growth and business strength the Trident Technology Solutions business which has seasonal highs during the Nov-Jan months generated circa $2.2 million in revenue in June (up 17% on May 2020 and 24% on April 2020),” Spirit Telecom noted.

“Revenue for the quarter ending 30 June 2020 (Q4 FY20) was $11.9m – up 14% on the previous quarter ($10.5m Q3 FY20), “demonstrating the resilience of the business and value of its recurring revenue streams, customer demand for the Spirit products, contribution from acquisition strategy and skilled acquisition integration”.

 An overview of the Spirirt Telecom results shows:

  • Total H2 20 Spirit revenue grew 133% Year on Year.
  • H2 20 revenue grew 80% to $22.4M on H1 20.
  • Total B2B revenue growth: H2 20 up 105% to $19.4M on H1 20 and up 205% on H2 19.
  • Spirit grew revenues by 14% from Q3 20 to Q4 20 (excludes revenue from recently acquired VPD Group completed on 1 July), demonstrates the resilience of the recurring revenue streams and acquisition integration skills executed during the COVID-19 period.
  • Recurring revenue base from B2B customers continues to strengthen - up 82% to $10.7M on H2 19.
  • The unaudited FY20 Underlying EBITDA* range is expected to reach $3.5M-$3.8M. • Healthy balance sheet with $14M of cash and available debt as of June 30 (VPD settled 1 July with $6.0M drawdown).

Managing Director, Sol Lukatsky said: “Over the course of the past year Spirit has evolved to become a Modern Telco, from solely being focused on high-speed internet to now providing a complete offering across Telco, Internet, Cloud, IT managed services and Cyber Security.

“Our proven ability to identify right-fit acquisition targets, pay fair value and importantly integrate these skilfully and quickly – coupled with our expertise in sales and marketing - has been integral to our growth.”

“These acquisitions have enabled us to create a truly contemporary and customer relevant Telco & IT company for Australian businesses - who are tired of the major Telco’s excuses. Our ability then to bundle the telco and IT products that a business needs and provide outstanding customer service resonates with our target clients and has underpinned our organic growth during COVID.

“With the added expansion of our network of the Spirit Solution Partners nationally reselling our products, following our most recent acquisition of VPD, we enter FY21 with a solid platform for further growth organically and via a healthy pipeline of acquisition options.”

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