Amcom FY11 profit announcement (AMM)

Today, Amcom announced FY11 results, putting up some great numbers and confirming both strong demand for their fibre services, and strong growth for their Cloud and Voice offerings.  High level numbers (excluding IIN’s contribution) are as follows:


Revenue up 38%

EBITDA up 29%

NPAT up 31%

Operating cashflow up 35%


The Fibre business grew 22%, and Business Services (which I’m assuming encompasses Cloud and Voice) rocketed up 285% in revenue and 71% in EBITDA.  If $15.4M of this revenue is from voice, that means Amcom’s cloud business is already contributing $5M.  I would not be at all surprised to see similar growth from the Business Services division for HY12 and FY12, given the amount of cross-sell opportunities to Amcom’s fibre client base.  It’s worth noting that Amnet, the non-synergistic consumer DSL business, showed a decline in revenue and a significant reduction in EBITDA, suggesting the business needs to be offloaded to someone for whom it is core business, iiNet being an obvious buyer.


The decision by management not to increase Final dividend suggests they are looking at more acquisitions, although I’m not sure who else they would buy that would integrate nicely with the rest of the business, apart from a data centre operator or dark fibre assets on the east coast.


Given the choice of holding IIN and AMM, the decision is easy, with huge growth coming through from their fibre business, and monstrous growth anticipated in the emerging cloud and voice market segments.  The new entity is debt free and throwing off cash like the billy-o.