Spirit Technology returns to profit as revenue triples

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Spirit Technology returns to profit as revenue triples
Sol Lukatsky (Spirit Technology)

Spirit Technology Solutions has posted a bumper 2021 financial year off the back of strong demand from midmarket and SMB customers.

In the 12 months that ended 30 June 2021, the company returned to profitability with net profit after tax of $1.15 million, compared to a loss of $1.5 million in FY2020. Revenue also increased 200 percent from $34.9 million to $104.5 million, while EBITDA grew 295 percent from $2.2 million to $8.6 million.

Spirit credits its bumper year from its transition from a small internet service provider to a full-service technology company through its 13 most recent acquisitions.

“Our growth strategy is paying off — we have seen strong and growing demand for our product set across data, cyber, managed services and voice,” managing director Sol Lukatsky said.

“Of the 13 most recent acquisitions, Spirit has successfully integrated 10 of 13 companies into the standard operating environment. In FY21, Spirit tripled both revenue and underlying EBITDA and we are increasingly seeing this momentum carry us into larger contract success in the mid and corporate markets.”

The company also revealed that its planned sale of its consumer broadband business “continues to track well”, receiving multiple bids and the due diligence process was in advanced stages.

Spirit also revealed an undisclosed group of potential buyers also enquired about the possible sale of additional infrastructure assets, which it does not consider part of the core business. “The Spirit board is considering these requests and has appointed an advisor to review its options,” the ASX announcement read.

Looking ahead, Spirit looks to continue pursuing potential acquisitions in the IT and telco markets, but remains cautious with the “highly disruptive period” caused by COVID-19 restrictions in major capital cities.

“Spirit sits in the desirable position to participate actively in further industry consolidation across either of the IT & Telco markets,” Lukatsky said.

“We are seeing structural change with the merger of IT & Telco product requirements demanded by our customers.

“As we have seen from the FY21 results, the Spirit operating model is in a strong position, but the existing environment remains challenging for the SMB market and will restrict opportunities in the short term.”

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