Publicly-listed telco player Uniti Group has mounted a marked turnaround for the year ending 30 June, posting underlying pre-tax earnings (EBITDA) of $26.5 million after ending the first half in the red to the tune of $900,000.
The Adelaide-headquartered broadband specialist, previously known as Uniti Wireless, told shareholders that its 2020 financial year was “wholly transformational,” with the company having completed three substantial acquisitions in the first half, snapping up network operator LBNCo, OPENetworks and 1300 Australia, each of which has subsequently contributed to Uniti’s FY20 earnings for part of the year.
Additionally, the organic growth achieved in the second half of FY20 by the now enlarged Uniti business, combined with an integration program for the new acquisitions, resulted in the company upgrading its underlying EBITDA guidance for the second half of FY20 and its forecast June 2020 underlying EBITDA run-rate on three separate occasions.
As a result, Uniti finished FY20 with an annualised underlying EBITDA exit run-rate of approximately $41 million, a 24 per cent increase in the second half of FY20 on the same measure as at December 2019, generated organically, according to the company.
Statutory profit for the group, after income tax, amounted to $15.9 million, compared to a loss of $13.5 million for the previous year.
The statutory profit includes significant items consisting of $5.2 million acquisition costs incurred as part of the acquisition of 1300 Australia Pty Ltd, LBNCo Pty Ltd and OPENetworks Pty Ltd, $4.6 million share-based expenses relating to shares and options issued during the year, $700,000 in restructure costs incurred as part of group reorganisation activity and the recognition of a tax benefit of $7.3 million.
After adjusting for the significant items the profit after tax for the consolidated entity for the year was $21.7 million compared to the prior corresponding period loss after tax of $7 million.
“FY20 has seen Uniti Group completely transform from a loss-making, fledgling start-up to a highly profitable, diversified and growing organisation, with the platform set for further marked expansion over the coming years,” Uniti Group managing director and CEO Michael Simmons told shareholders.
“Whilst we are pleased to have secured a number of materially accretive business acquisitions during FY20, what we are most proud of is that our team has delivered strong organic growth in the last six months, a period in which no new acquisitions were undertaken and the nation was (and remains) in the midst of dealing with the impacts of COVID-19 and with no financial contributions received from JobKeeper.
“This is evidence that we are building a business with highly defensive qualities, capable of making strategic acquisitions, integrating them effectively, and delivering forecast earnings accretion, enhanced by organic growth,” he added.
Despite being in the midst of nationwide COVID-19 restrictions, Uniti also undertook negotiation, due diligence and signed an agreement to acquire 100 per cent of fibre network builder and operator OptiComm Limited for $532 million in June.
The expected completion and earnings contribution of the acquisition is expected to take place from 1 October 2020, subject to satisfaction of all conditions.