Pipe Networks lifts revenue & NPAT by 46 percent

Stuart Corner
Tuesday, 25 August 2009 17:51

IT Industry - Strategy

Pipe Networks (ASX: PWK) has reported a 46 percent increase in after tax profit for the year ended 30 June 2009, to $10.5 million, including costs associated with construction of its submarine cable network between Sydney and Guam, PPC-1.

Revenue was also up 46 percent to $50.4m and EBITDA up 43 percent to $18.6m. Net operating cash flow was up 40 percent to $24.3m. The company said revenue growth had been driven primarily by strong demand for its dark fibre, telehousing and peering products. During the year Pipe says it secured new contracts worth $48m from new and existing customers. The result comes hot on the heels of Pipe lighting up its PPC-1 submarine cable, earlier this week.

Pipe Networks CEO, Bevan Slattery, said: "This strong result is testament to Pipe's sound business model underpinned by growing demand, long term annuity contracts, our investment in high growth assets and continued focus on customer service."

According to Slattery, "Since its inception, backed by customer contracts, the company has invested heavily in building its domestic fibre optic network that is now over 1,300km in length." He said the company's key focus for FY10 and beyond would be "to provide on-net services to Internet service providers, corporate and government customers and reap the benefit from our existing robust networks.

During FY09 Pipe launched two new products, PipeEthernet and PipeIP, that it expects will deliver increased sales from both existing and new customers in FY10. It says it has also invested in additional sales resources and upskilling of existing sales resources to support FY10 growth.

The utilisation of its existing fibre network increased from 22.5 percent in June 2008 to 24.8 percent in June 2009 and network reach grew by 18.3 percent during the year. The network connects over 75 data centres, 100 Internet and application service providers, 200 Telstra exchanges and more than 500 buildings. With an average fibre count of 155, Pipe claims it is the 'thickest' fibre network in Australia.