Data and Hosting driving Macquarie Telecom's growth

By Stuart Corner
Thursday, 27 August 2009 05:26

IT Industry - Strategy

Macquarie Telecom (ASX: MAQ) has achieved a full-year EBITDA of $25.0m for the year to June 2009, an increase of 81.9 percent over the previous year and has turned a net loss in FY08 of $1.17m into a profit of $7.45m. Throughout the announcement of its results it emphasised the growing contribution from and focus on data and hosting services.

Data and Hosting EBITDA rose 17.1 percent to $11.0m and data and hosting revenue now represents 37.6 percent of total revenue. Over the year the company boosted employee numbers from 339 in June 2008 to 384 in June 2009.

CEO David Tudehope, said: "Our strategy to move towards higher margin services is working, as we continue to grow our data and hosting businesses. Our hosting business has now established itself as the market leader in mission-critical application hosting. With a continued focus on differentiation through personal, accountable service delivery, we look forward to further growth in this area. Tudehope told an investor briefing that the company was exploring "organic and inorganic investment opportunities."

Macquarie said it expected growth in 2010 to continue "moderated by ongoing investment in our leadership in customer service and our hosting business." An update on first half FY10 performance will be given at the company's AGM in late November.

Macquarie Telecom's voice business generated revenue of $118.0m, down 5.7 percent from the previous corresponding period. "The voice services market again came under intense price pressure, reinforcing Macquarie Telecom's ongoing strategy to reduce reliance on voice service revenue and focus the higher margin businesses of data and hosting," the company said.

After posting a drop in voice EBITDA in FY08 from 10.7m to $8.1m the company was able to almost double voice EBITDA in FY09 to $16.0m. It said that "voice share of allocated operating expenses reduced in FY09 as resources are redirected to the data & hosting line of business to support future growth."

Mobile revenue was essentially flat during the financial year, however EBITDA increased 31.3 percent on the previous corresponding period to $2.1m. The company said that mobiles "continues to be an important element of Macquarie Telecom's strategy of offering bundled solutions to customers across all areas of telecommunications."

Its Asian business grew revenue from $10.3m to $12.2m and EBITDA from $0.1m to $1.8m. However the main source of this revenue, Singapore-based Macquarie Telecom Pte Limited, was sold to CITIC 1616 Holdings for $A8.7m at the end of July 2009.

On 14 August the company changed the name of its subsidiary Macquarie Telecom Services Pty Limited to Macquarie Hosting Pty Limited.

This article first appeared in ExchangeDaily, iTWire's daily newsletter for telecommunications professionals. Register here for your free trial.