Investing in its aggressive acquisition and growth strategy has seen Spirit Telecom’s net profit absorb a $1.5 million loss for the 2020 financial year, ending June 30.
Revenue increased 100 per cent to $34.9 million as the publicly listed company foresees a strong pipeline of acquisitions in negotiation and due diligence stages.
During FY20 Spirit undertook a strategic decision to invest in its Spirit X Digital platform and advertising spots to grow leads, sales channel and brand nationally.
As a result of this move, it has witnessed a strong start to FY21, already booking $2.3 million (total contract value) of new sales, up from $900,000 in July last year. The acquisition of VPD Group last month has already contributed $1.3 million in total contract value.
One particular highlight of Spirit’s FY20 results was the growth experienced in its B2B segment, which saw revenue grow 147 per cent to $28.9 million, reflecting 90 per cent of its revenues, and signalling a dramatic shift of Spirit’s revenue mix the past year as part of its efforts to ‘create a one stop shop’ with its Spirit X Digital Platform.
During July, Spirit signed a further 21 new resellers and Spirit Solution partners to sell its products on the Digital Spirit X sales platform, which during the second half of FY20, created 12,000 unique leads and searches, the telco said.
The telco plans to have more than 300 partners as part of its wholesale dealer network by the end of the year.
“FY20 has been a year of phenomenal growth and transformation,” Spirit Telecom managing director, Sol Lukatsky said. “The July trading update shows we’re off to a fast start to FY21, and we continue to pursue an aggressive growth agenda, both organically and via a range of acquisition options.”
“We’ve assembled and integrated the product suite and service delivery model that’s enabled us to become a truly modern telco and challenge the major IT and telco providers head-on,” he said. “We will continue to invest in growing the Spirit brand nationally and are committed to not only meeting but exceeding the needs of Australian businesses when it comes to their IT and telco needs, with Spirit’s customer-focused approach.
For FY21, Lukatsky said its main priority was to bring its entire cloud and IT offering on to its digital sales platform, Spirit X, expand its wholesale dealer network and continue its disciplined M&A strategy to “find right price, right fit businesses that support the expansion strategy, as well as continuing to focus on integration and optimising growth synergies.”
Spirit entered into a trading halt on August 18, pending a capital raising announcement, with those funds expected to go towards new acquisition targets.