M2 TELECOMMUNICATIONS GROUP LIMITED
MTU - 2008 Full Year Results - Mr Vaughan Bowen, CEO
Tue, 26 Aug 2008 01:30PM
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Mr Vaughan Bowen
Tue, 26 Aug 2008
01:30PM Australia/NSW
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M2 TELECOMMUNICATIONS GROUP LIMITED (MTU)
ASX code: MTU
Website: http://www.m2.com.au
Industry: Telecommunication Services
Principal Activities:
Adding value to, and reselling, telecommunications services.
Address:
, 60 City Road, Level 10 - IBM Centre,
SOUTHBANK
VIC
Phone: (03) 9674 6555
Fax: (03) 9674 6599
Executives & Directors
Mr Craig Farrow , Chairman
Mr Vaughan Bowen , Managing Director
Mr Dennis Basheer , Non Exec. Director
Mr Max Bowen , Non Exec. Director
Mr John Hynd , Non Exec. Director
Mr Darryl Inns , CFO
Ms Kellie Dean , Company Secretary
Company Podcasts
Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
M2 TELECOMMUNICATIONS GROUP LIMITED (MTU) Events
| Company (Stock Code) | Date/Time | Event |
Timezone: Australia/NSW |
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Tue, 2 Jun 2009 04:30PM |
M2 Acquires Commander Business Assets - Mr Vaughan Bowen, Managing Director |
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Thu, 26 Feb 2009 01:15PM |
MTU - Half Year Results Overview - Mr Vaughan Bowen, CEO |
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Fri, 5 Dec 2008 09:45AM |
MTU - M2 Agrees To Acquire People Telecom - Mr Vaughan Bowen, CEO |
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Tue, 26 Aug 2008 01:30PM |
MTU - 2008 Full Year Results - Mr Vaughan Bowen, CEO |
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Mon, 21 Jul 2008 11:00AM |
MTU - Smart Business eConference - Mr Vaughan Bowen, Managing Director |
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Tue, 24 Jun 2008 03:00PM |
MTU - M2 Announces Wholesale Agreement with People Telecom - Mr Vaughan Bowen, Managing Director |
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Thu, 28 Feb 2008 08:45AM |
MTU - Half Year Results end Dec 2007 - Mr Vaughan Bowen, Managing Director |
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Mon, 4 Feb 2008 12:45PM |
MTU - M2 Acquires Unitel from Commander - Mr Vaughan Bowen, Managing Director |
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Wed, 5 Dec 2007 01:00PM |
MTU - Emerging Companies Online Conference Presentation - Mr Vaughan Bowen, MD |
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Wed, 10 Oct 2007 01:45PM |
MTU - FY2007 AGM Briefing - Mr Vaughan Bowen, MD |
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Thu, 6 Sep 2007 02:00PM |
MTU - Launch of Green Mobiles - Australia's 1st Environmental Telco - Mr Vaughan Bowen, MD |
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Thu, 23 Aug 2007 10:00AM |
MTU - 2007 Full Year Results - Mr Vaughan Bowen, MD |
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Fri, 3 Aug 2007 11:15AM |
MTU - Vodafone New Zealand Mobile Wholesale Agreement - Mr Vaughan Bowen, MD |
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Tue, 17 Jul 2007 12:00PM |
MTU - Simply Mobiles Launch - Mr Vaughan Bowen, MD |
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Mon, 2 Jul 2007 01:00PM |
MTU - M2 Acquires Tenex Telecommunications - Mr Vaughan Bowen, MD |
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Fri, 29 Jun 2007 01:00PM |
MTU - Plan to Acquire Orion Telecommunications - Mr Vaughan Bowen, MD |
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Thu, 21 Jun 2007 11:05AM |
MTU - Optus Extends M2 Wholesale Enabler Appointment to 2010- Mr Vaughan Bowen, MD |
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Tue, 29 May 2007 04:00PM |
MTU - MicroEquities Micro Cap Conference Presentation - Mr Vaughan Bowen, MD |
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Wed, 9 May 2007 02:00PM |
MTU - Acquires Wholesale Communications Group - Mr Vaughan Bowen, MD |
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Tue, 27 Feb 2007 03:30PM |
MTU - Reports 50% Increase in Half Year Profit - Mr Vaughan Bowen, MD |
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| Wed, 25 Feb 2009 11:00PM |
Interim Results | ||
| Fri, 31 Oct 2008 03:00PM |
Annual General Meeting Level 12, 600 Bourke Street, Melbourne, VIC
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| Thu, 30 Oct 2008 11:00PM |
Date Payable | ||
| Tue, 14 Oct 2008 11:00PM |
Record Date | ||
| Wed, 8 Oct 2008 11:00PM |
Ex Div Date | ||
| Tue, 26 Aug 2008 | Full Year Results | ||
| Sun, 30 Mar 2008 11:00PM |
Date Payable | ||
| Tue, 11 Mar 2008 11:00PM |
Record Date | ||
| Tue, 4 Mar 2008 11:00PM |
Ex Div Date | ||
| Tue, 30 Oct 2007 11:00PM |
Date Payable | ||
| Mon, 15 Oct 2007 | Record Date | ||
| Tue, 9 Oct 2007 | Ex Div Date | ||
| Fri, 5 Oct 2007 04:00PM |
Annual General Meeting Level 1, 350 Collins Street Melbourne VIC
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| Mon, 2 Apr 2007 | Date Payable | ||
| Tue, 13 Mar 2007 11:00PM |
Record Date | ||
| Tue, 6 Mar 2007 11:00PM |
Ex Div Date | ||
| Mon, 26 Feb 2007 11:00PM |
Interim Results | ||
| Mon, 30 Oct 2006 11:00PM |
Date Payable | ||
| Mon, 16 Oct 2006 | Record Date | ||
| Fri, 6 Oct 2006 04:00PM |
Annual General Meeting Hotel Charsfield, 478 St Kilda Road Melbourne VIC 3000
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  Displaying 1-20 of 48 events
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M2 TELECOMMUNICATIONS GROUP LIMITED (MTU)
| Change in substantial holding | Wed, 24 Jun 2009 |
| Appendix 3B | Tue, 23 Jun 2009 |
| Change of Director`s Interest Notice | Tue, 23 Jun 2009 |
| M2 Completes Commander Business Assets Acquisition | Tue, 16 Jun 2009 |
| Change in substantial holding from HHL | Fri, 5 Jun 2009 |
| Boardroom Radio - M2 Acquires Commander Business Assets | Tue, 2 Jun 2009 |
| M2 Acquires Commander Business Assets | Tue, 2 Jun 2009 |
| Change in substantial holding | Tue, 12 May 2009 |
| Ceasing to be a substantial holder | Tue, 12 May 2009 |
| Change in substantial holding from HHL | Mon, 11 May 2009 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
INTERVIEW WITH VAUGHAN BOWEN, MANAGING DIRECTOR OF M2 TELECOMMUNICATIONS GROUP LIMITED (MTU)
“MTU - 2008 Full Year Results”
http://www.brr.com.au/event/50115
TUESDAY, AUGUST 26 2008, 1:30 PM.
BRR Welcome to Boardroom Radio. Today I’m speaking with Mr. Vaughan
10 Bowen, the Chief Executive Officer of M2 Telecommunications. Vaughan, thanks for joining us today.
MTU Thanks, for having me James.
BRR Now, M2 has today released the four year results to the ASX, can you start
15 by giving listeners an introduction and an overview of the highlights of this results.
MTU Yes, certainly, James, and as I would say we’re very pleased to be able to release these results to the market. It is by far, far and a way, most successful year in financial terms in the business as nine year journey. We’ve
20 recorded, as the relations describes, we’ve recorded a profit increase, Net Profit After Tax (NPAT) increase of over a 114% taking our profit up to $5.2 million compared something in the order of $2.4 million last year. Our EBITDA is up, to over $9 million; our revenues, broken through the $100 million revenue level to just over a $109 million, at $43 and a half million last
25 year. So on every key metric that our business as financial performance would be judged, M2’s had a very, very strong year. In fact, we didn’t have sector which is growing at the in the most single digits, has been the joke of sector. Our business has grown all of its key metrics by somewhere between 114% and 115%. So it’s been a stunning year for the company of a year of
30 great change in terms of growth in the business, obviously evidenced by the numbers but also a team of people has expanded to a nearly 3-fold to 175 individuals. Yeah, across the board, it’s been a very, very big year. In fact, the numbers as reported are terrific but they are… in fact, we’re impacted this year by a one of non-cash charge to the account which if, even if normalized,
35 in the very commerce, would actually improve our results somewhat as the released reports. In fact. there are in Net Profit After Tax (NPAT) normalized for that one of non-cash cost would increase to approximately $5.8 million or year-on-year in increase $75.7 million an increase of about 139% on last year. Our EBITDA would just be….would rate to just on the $10 million,
40 150% plus increase and earnings per share would, in fact, be up year-on-year by 83% but that normalize to just ….but even irrespective of that, it’s a fantastic year of on all rounds. So we are thrilled and certainly, I speak to the Board of Directors when I say that we’ve had a great year.
45 BRR Now Vaughan, you spoke that indicated that sales revenues has pushed through $109 million, how does this place you amongst your tier or your sector.
MTU With our revenues at the level of they’re at now, the way the telco industry works is basically network owners and there’s partial network owners and then there is a network reseller both but that our network….have used the network infrastructure of the carriers such as Telstra and (inaudible) (00:03:14) , we fall into that third tier or third category and as it stands right now, our business is quite substantially the largest by quite a substantial
5 margin, the largest in that tier, in that third tier. We have, as you mentioned, reported revenues of $109 million plus but our annualized revenues of the business on a run rate basis today are well in excess of that so, yes we do hold that number one position within our tier and we have no aspirations to become a network owner. Our business is finding a very successful and
10 profitable model in the sector that we are part of, the industry that we operate and we just intend to further consolidate our position in the network reseller tier.
BRR And, Vaughan, how did your acquisitions throughout the fiscal year impact
15 upon the results?
MTU They certainly contributed. We made two notable acquisitions during the year. We purchased another small publicly listed company by the name of Orion Telecommunications in October last year and we bought the whole sale network gaskets of Commander Communications Company called Unitel
20 Australia in February this year. So, both of those business have contributed only in a per rata sense about nine months and four months, respectively, so they haven’t contributed for the full year. Hence, the run rate earnings of the business are at a higher level going into the new financial year. They contributed something approaching half of our growth to the year so that’s
25 obviously from a converse evidences that the business’ organic growth has been very, very strong during the year. We’ve grown our top line by something in excess of $66 million for the year and less than $30 million of that was a ….half of that was coming from the acquisitions. So we’ve shown that the underlying business has grown by nearly 8%. So that’s irrelevant to
30 point that out, James, because business is obviously grown by acquisition, by doing transactions, up on transactions, but if the underlying business isn’t growing on advance steam that potentially creates (inaudible) (00:05:23) within the business but we can. We’re pleased that we’ve achieved both acquisition and organic growth successfully during the year.
35
BRR Vaughn, looking specifically at your wholesale division, you’ve indicated growth of over 400% for this year. Things work, you know, are very strong…strong results, what do you attribute this to?
MTU First and foremost, wholesale at wholesale division of our business is strong
40 in every regard. It is by far our most strategic arm of the business. We only started the wholesale division two years and two months ago, I think, as of today. In the business, it’s approaching $90/$95 million in annualized revenues standing in today so from the standing start, it’s just been a fantastic arm or extension to our business. The strength of the wholesale
45 comes from the fact that we are able to service the smaller and medium sized telecommunications companies and Internet service providers in a manner which the major carriers or they’re called T1 network owners are not able to. They either elect not to because they would prefer to deal with a larger base, a larger sized customers such as ourselves or there are other impediments to dealing directly with the larger carriers. So we fill a void within the telecommunications wholesaling market that has just delivered us fantastic growth year-on-year. It’s been a terrific balance to our business because we’ve had a successful retail business focused on the small enterprise based
5 for several years, but to have brought the wholesale business seem now to be, in the last financial year, in fact larger than our retail business is greater than a nice portfolio balance to our business whereas before we were just focused in one market segment. So, the business has a two pillars of earnings and growth at the moment which is good from a security and a
10 forward stability perspective,
BRR Now Vaughan, looking at M2’s retail division, it’s also showing significant, strong revenue growth following the acquisition of Orion Telecommunications is obviously a pleasing result on the retail side as well?
15 MTU Yes, absolutely. Our retail business had been reasonably flat for the couple of years prior to the acquisition of Orion. We were on somewhat starved of growth capacity in physical terms, in terms of our call center capabilities and the management marketing team that we were…that we needed to work up in order to grow that business positively again. The Orion acquisition, which
20 incorporate Southern Cross Telco, which is a network recently telco that’s been running in Australia for about 12 or 13 years very successfully in that segments. That brought in that missing talents, that brought in the additional capacity we’ve inherited through that acquisition, a large call center facility in Hobart in Tasmania, which has given us that scope of growth. It obviously
25 added large based customers, as well, we’ve added something in the order of $25 million annualized in new revenues, but more as importantly gave us that capability to generate further growth to cross sale and up sale to our existing customers to show them up and sell them more products. Compared with…as our industry refers to a greater share of wallet, we’ve got
30 our capabilities now that we didn’t have 12 months ago. So, the Orion acquisition, in particular the Southern Cross subsidiary of that Orion acquisition has been a terrific shot on the arm for our retail business and we’re expecting 2009 to deliver net growth once again in that area over and above the new customers that we’ve come… that we’ve inherited through the
35 acquisition.
BRR Now, your team has grown substantially to support the business growth, how have they added up to the changes within the business?
MTU Yes, as I mentioned at the outset, our business chain this time last year
40 was… numbered 66 people in this. Standing here now, it numbers in excess of 175 people so yes, it’s been …our business had a steep change in almost every area but on the team front, it has been a dramatic change nearly a tripling of our personnel. How they adapted unbelievably a team that we had within the business before a year of growth and the couple of acquisitions are
45 mentioned. The core group of that team are still together and united, have adapted to what is now much bigger business incredibly well and probably most as pleasingly. The change, the core management and senior and middle and junior management team as within the businesses of the we’ve acquired have all embraced the acquisition volumes to and have become a key part of our overall business. The level of integration between the managers of the Southern Cross operation, the managers of the Unitel operation and the M2 business itself is quite phenomenal. We’ve been very, very focused on culture as a core strength of our business for many years
5 and we’ve done our very best to maintain a loyal group of people but acquisitions can upset that apple cart. Standing here now, I’m thrilled to say that we have not lost a co-member of our management team. Those within the business, prior team managers, and operatives of the businesses we’ve acquired with the business are paid up and passionate so we have …I have
10 got much gratitude to the team and the much enlarged team of M2 and it certainly as a business that does not have a network infrastructure, intentionally does not have a network infrastructure. Our core asset undeniably is our team of people. Well it has a busy year and has just done fantastically.
15
BRR Now, Vaughan, say some good news for shareholders, M2 has declared an eighth consecutive dividend, this is coming at more than 70% of NPAT, quite remarkable particularly given the growth orientation of the company.
MTU Yes, it is something that we are very proud of, it is our eighth consecutive
20 dividend and it’s the dividend year on year is up some 67% from the time period last, over the full year last year. I thought we will declare a 5 cent fully franked dividend compared with 3 cents the year before. So, yeah, our business has always prided itself on being able to generate free cash flows and being able to return those free cash flows to our shareholders. We’ve
25 been able to find this, in excess of four years at balance, between strong growth. We certainly have achieved…we’ve grown by 80% compound annually on the top line of the business capital last 4 or 5 years but we’ve been able to manage that balance, that growth with good growth in earnings and very strong cash flows and evidenced by, I think we’ve averaged 73% or
30 74% of Net Profit After Tax (NPAT) as what we’ve paid out period on period for eight consecutive periods. So a consecutive half for four years. So, yeah, it’s certainly put us in a unique category in our sector and generally in small cap growth companies to be able to balance a strong tough long growth with strong bottom line growth and dividend yield is something that we’re very
35 proud of. We have every intention for that to continue about basically by forecasting on the quality of our customers so that we have good credit quality customers and we’re still managing our cash flows on a day-to-day basis.
40 BRR Just to finish up, Vaughan, I understand M2 has given some guidance for FY09, could you give us some insight into what this guidance is?
MTU Yes, we’ve touched on our expectations further for the 2008-09 financial year within the relations within our result presentation that we’ve released today. In summary, we’re expecting the business to have another year of fairly
45 dramatic, double digit growth. We’re expecting something in excess of 40% growth across all of the key metrics of the business whether it be the top line or the… most importantly, the net profit after tax line and also in our earnings per share and potentially also our dividends capability will work from that as well. So subject to board approval, that’s normal, but here we have another year of big (inaudible) (00:14:06) in store and that growth is very much focused to run our organic business. We’re not factoring in any other acquisitions or any bought on earnings. We’re looking at the underlying strength of our business now as a much larger enterprise. We have our
5 wholesale and retail arms, as I’ve mentioned, both fully resourced and strong forward, as mentioned, so we don’t believe we’ve been too heavy by suggesting that the business can deliver another year of fairly dramatic growth. As I touched on earlier, change is relative to the sector. We’re talking about a year of 40 something percent growth within our sector that is
10 growing, in terms of who you speak to. They call it 4 or 5% so it’s a ….we’re, we have an understanding ahead of the curve.
BRR Well, Vaughan, congratulations on a very solid result and thank you very much for taking the time to speak with Boardroomradio and update shareholders and potential investors and interested parties on the
15 performance of M2 Telecommunications.
MTU Thanks,James, and thanks for taking time.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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