Amcom HY12 result (AMM)

Unlike most carriers, Amcom has diversified away from their core telecommunications capability, bolting on acquisitions such as IP Systems and L7 to complement the existing fibre business and create more cross-sell opportunities.  Reviewing the recently published HY12 numbers, things are looking pretty good:


Revenue up 39% to $55.1M

EBITDA up 20% to $16.6M

Cashflow up 30% to $14.1M

EPS up 21% to 3.5cps*


Based on these results it’s hardly surprising that AMM’s share price closed up 7.35% on the day of announcement, at 95c.  Having closed at $1.07 as of this Friday, Amcom’s certainly experienced some nice appreciation thanks to these results.


Amcom now have a number of different business units, each of which are related and make each other stronger through cross-sell opportunities:


Data Telecoms:

The core business, Amcom’s data telecoms asset may be maturing but it still posted an impressive 19% EBITDA growth.  Additionally, Amcom’s cost of delivery has decreased further, requiring only 64c capex to turn on $1 worth of fibre revenue.  The other businesses more or less extend the existing data business, moving up the value curve.

Cloud Computing:

Developed through the Bluefire partnership, Amcom’s SaaS offering gives them the ability to deliver applications through their own private network, giving their clients security and Quality of Service across the network.  While there still haven’t been any big name wins since UWA, Amcom’s management boasts a “strong pipeline of opportunities”.  I will be watching this area carefully to see that it is confirmed.

IP Telephony:

Not much detail was provided on the Amcom voice business, although FY11 growth was impressive.  It’s a fairly simple cross sell to make to an existing data network customer, so I look foward to seeing more growth here (and possibly a decent win with the NT Government as well)

ICT Services:

The most recent acquisition, Amcom’s purchase of L7 should give them a longer-term value proposition which sits away from the ICT infrastructure story.


In summary, I continue to hold AMM, and am happy to do so.  The business continues to perform and there are plenty of additional avenues for growth.

*Profit was reported up 169% due to the distribution of Amcom’s IIN shareholding

BigAir – The growth story continues, on track for maiden dividend (BGL)

BigAir posted their HY12 numbers today, and even though I’m a true believer, I was still impressed by BigAir’s excellent result.  Let’s review:

Revenue up 115% to $10.97M

EBITDA up 161% to $4.57M

NPAT up 211% to $1.97M

Cashflow up 57% to $3.78M


Additionally, as at December 31, BigAir’s cash reserves sat at $4.1M.  More exciting news is that management has confirmed the business is currently on target to pay a maiden dividend at full year.  If you look at October’s EBITDA run rate of $850k, you can see even if the company doesn’t sell a thing in the intervening period, BGL will post a full year EBITDA of $9.67M – well above the FY12 guidance of $9M.  Given the synergies yet to be realised, coupled with anticipated growth, and I’d expect to see FY12 EBITDA of at least $10.5M and more likely above $11M.  The full-year impact of opex reductions, coupled with some off-net contracts expiring in FY13, means continuing upside for shareholders.


Future years should see less of a capex requirement for BigAir, so it makes sense that the company is beginning to pay out dividends.  I’m 98% certain that we’ll see at least 1c for full year – given there is a $4M hurdle, and my modelling predicts an NPAT of $4.7M, it would take a pretty big disaster to spoil the end of year party for BGL shareholders.

BSA shoot the lights out with HY12 numbers (BSA)

I mentioned in my FY11 post that despite BSA’s share price receiving a bollocking by Mr Market (at one point touching 18c), the underlying business was sound.  Based on the HY12 numbers BSA put up today, Mr Market is now panicking to buy back those 18c shares at a 50% premium – with the share price closing at 27c.  Let’s look at the figures:

Revenue up 39% to $264m

EBITDA up 31% to $11m

NPAT up 38% to $6m

EPS up 32% to 2.67c


At this level, everything looks fantastic.  Management has $154m of work in the pipeline and they’ve continued to invest in their mobile workforce to increase efficiency.  Cash also rolled in the door, taking BSA from a $12m deficit to a $6m net cash position.


BSA even managed to wring more growth out of their mature Networking Services business, but expect this to shrink with loss of business from Silcar, due to a change in Telstra’s sourcing of contractors.  Realistically, BSA can continue optimising this section of the business as a stable source of earnings.


The real growth is in the HVAC side, which now generates 75% of revenue.  As tenants of older buildings demand better energy ratings, upgraded HVAC plant will become a necessity for more and more sites.  I’m expecting BSA to continue to grow this practice through acquisition and organic growth, and look forward to continue holding my shares well into the future.

Supply Network profit guidance (SNL)

I just can’t shut up about Supply Network (SNL).  After predicting at the start of 2011 that the company would grow at roughly the size of the economy, Supply Network has blitzed the general market, with NPAT growing 53% in FY11 and the share price almost doubling in a year, all while paying out generous dividends.


Today, Supply Network put up their HY12 numbers and forecast for the full year:


Revenue up 21% to $29.5M

EBIT up 53% to $2.73M

NPAT up 54% to $1.79M


Full year EBIT is anticipated to be $5.5M, up 44.7% from FY11.  The interim dividend has also been increased 1c to 3c per share.  The strong cash balance suggests more dividend increases (or a special dividend) may be in order later this calendar year.


(It should be noted that I have not yet added to my position)


Update 22/2/12: SNL today confirmed guidance at the above figures.  Half year earnings per share?  5.23c.  Current share price?  86c.