Macquarie Telecom has doubled its net profit after tax in the first half of its financial year.
The telco’s financial year started on July 1, 2010. First half-year figures cover the period July 1 to December 31.
Net profit after tax reached $9.7 million, 102 per cent higher than the previous corresponding period.
Earnings before tax jumped 48 per cent to $20.3 million. The sum included a one-off amount of $1.5 million gained from a legal settlement from last year.
Macquarie Telecom maintained a cash flow of $17.6 million with cash and cash equivalent assets amounting to $45.5 million.
The telco has invested heavily - $60 million to be precise – into fleshing out its hosting and cloud computing business. The division has already seen a 27 per cent growth in revenue in the first half of this financial year.
“The company is experiencing increased demand for its hosting services due to the growing trend of selective outsourcing of internal IT,” Macquarie Telecom CEO, David Tudehope, said in a statement.
“… We believe the emergence of cloud computing, which is a natural extension of managed hosting, will increase this trend and provide new market opportunities for us.”
Macquarie’s telco business which covers data, voice and mobile services made $89.7 million in revenue while earnings before tax was up 48.9 per cent to $15.8 million. The company attributed this result to strict cost control that improved margins in the telco division.
But the combined revenue of both divisions was down three per cent as the telco business softened slightly.
One of the strategies highlighted by Macquarie was to redirect some existing resources from the telco side to support the growing hosting business.
Capital expenditure on customer equipment and network maintenance was $9 million. This is expected to hit $18 million to $20 million as its hosting business continues to grow.
According to Macquarie, outlook for the full 2011 financial year appears positive and it is expecting to increase its earnings before tax by around 30 per cent.