Telecommunications company, M2 Group (ASX:MTU), has recorded increases in both revenue and net profit after tax (NPAT). The company said, in a statement on the ASX, that its profit generation has translated into shareholder value, at $0.17 dividend per share, just above its stated ratio of 70 per cent of reported NPAT.
Its full year dividend was $0.32 per share.
“We have again achieved our objective of delivering returns to shareholders with our total returns to shareholders in the FY15 period at 89 per cent. We maintained disciplined control over CAPEX in the period, delivering on our guidance and driving our balance sheet position, while pursuing value-accretive transactions,” M2 Group chairman, Craig Farrow, said.
“Throughout an intensely competitive period before the end of the financial year, our management team continued to focus on growth at a reasonable price, responding appropriately to market pressures in order to ensure that our cost to acquire remained within our desired range.”
Farrow indicated that going into 2016, the Australian market presents good growth prospects for both telecommunications and energy, especially as the nbn continues to roll out and the broadband market continues to grow.
“With our diversified sales channels and position as a leading challenger in our chosen markets, we are well placed to continue to grow organically. As always, we will continue to focus on the balance between integration, growth opportunity and transactional activity,” he added.
The company’s merger implementation agreement with Vocus Communications is expected to play a huge role in its growth. The merged company is said to bring about an expected revenue of about $1.8 billion and EBITDA of approximately $370 million in FY16, before synergies.
“As you would likely be aware, the transaction is intended to complete via an M2 scheme of arrangement, through which Vocus will acquire all of the shares in M2 and, in exchange, M2 shareholders will receive 1.625 Vocus shares for every M2 share, in accordance with the terms of the scheme.
“This will result in the current shareholders of M2 owning about 56 per cent of the merged company at the time the scheme is implemented,” Farrow said.
Its recent acquisition of telecommunications company, CallPlus Group, in New Zealand, is also expected to boost its revenues in the new year.
“With a similar positioning to Australia and a growing broadband akin to our NBN, in FY16, CallPlus is expected to deliver, in New Zealand dollars, $250 million in revenue and $45 million in EBITDA,” he mentioned.