Spirit Telecom eyes further acquisitions despite profit plummet

Spirit Telecom eyes further acquisitions despite profit plummet

Earnings down by half as telco posts $832,000 in the red

Geoff Neate (Spirit)

Geoff Neate (Spirit)

Credit: Spirit Telecom

Spirit Telecom has posted a loss for the financial year that saw it swallow up two telecommunications companies in two months.

The Adelaide-based firm made a net loss after tax of $832,742 for the year ended 30 June, a 245 per cent drop from last year’s half a million profit.

However, despite the drop, the company said it plans to continue its acquisition strategy throughout the new financial year in an effort to grow its offerings and customer base. 

Spirit’s earnings also fell by more than half from $2.5 million to $1.19 million, although revenue rose by seven per cent to $17.4 million.

The publicly listed telco pointed to delayed network expansion as the cause of its relatively sluggish growth, particularly in the first half of the year.

It also pointed to the acquisitions of purpose-built carriers LinkOne and Building Connect, for which it paid collectively $6 million, as adding the period’s operational costs.

Spirit then went on to make its first major foray into managed services the $2.6-million purchase of Arinda IT after the financial year’s close in July. Following this, it bought another MSP Phoenix Austec for $1.6 million.

“Given the slower than expected start to the financial year, we are pleased with the turnaround and the momentum that we have harnessed in the second half,” Spirit managing director Geoff Neate said.

“The acquisitions of LinkOne and Building Connect have seen our addressable market expand, while the more recent acquisitions of Arinda IT and Phoenix provide our team with and expanded product line. These two factors, coupled with the increased speeds coming from our network means that our ability to service our targeted SME customer has significantly improved for the forthcoming financial year.” 

Looking ahead, the company told shareholders it hoped a focus on bundles of voice, data and managed IT products will result in revenue per user growth over the year.

The company also claimed it would look to improve integration of its recent acquisitions, though added some progress had been made.

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Tags adelaideSpirit Telecomtelecommuications

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