Spirit’s losses deepen as restructure bites

Spirit’s losses deepen as restructure bites

Closes HY20 with losses sinking by a third

Credit: Dreamstime

Spirit Telecom has continued its downward trajectory after a year of acquisitions and restructuring saw its profits dip by a third.

The Melbourne-based telecommunications company closed the 2020 half year with $739,995 in the red, down from $562,010 year-on-year.

Spirit attributed the loss “in part” due to termination payments and business restructuring costs of $378,000.

The results for the year ending 31 December 2019 come just two months after the company’s co-founder Geoff Neate resigned as managing director. Chief sales and marketing officer Sol Lukatsky was named as Neate's replacement.

Despite also closing the last year with a loss, publicly listed Spirit maintained a commitment to an acquisitions strategy, picking up Arinda IT for $2.6 million and MSP Phoenix Austec for $1.6 million.

Nevertheless, Spirit saw its sales revenue rise by 51 per cent to $12.3 million and underlying EBITDA rise by 343 per cent to $1.61 million year-on-year.

Sales growth predominantly came from its B2B arm, whereby recurring revenue grew by 65 per cent to $12.5 million, while B2C grew by just one per cent.

The telco’s digital platform, Spirit X, stood out as a particular growth point, gaining 5,800 service qualifications and expecting to double its active partners and resellers to 300 by December this year.

Earlier this calendar year, Spirit brokered a $6.9 million deal to acquire two Melbourne managed services providers, Trident Business Group and Neptune Managed Services.

Trident’s IT solutions will now be cross-sold cloud, security and MSP products across the Spirit X platform nationally.

Looking ahead, more acquisitions are in the pipeline, with targets boasting $65 million in annuity based revenue eyed.

The company also hopes to scale the Spirit X platform to $80 million in revenue at the end of this calendar year, 2020, achieve a cash-positive position and “aggressively streamline” opex and capex until the close of financial year 2021.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Spirit TelecomGeoff NeateSol Lukatsky


Brand Post

Show Comments