Spirit Telecom’s acquisition drive will continue, with the MSP telling investors it has a “Healthy acquisition pipeline with multiple targets in DD [due diligence] stage or negotiation” and a $5m facility the Commonwealth Bank to help it chase its prey.
The company has also said it is testing the waters for a push to serve retailers through an alliance with a major operator of shopping malls.
In a half-year update for investors (PDF), Spirit reported that acquisitions such as those of LinkOne, Phoenix Austec and CloudBT have already contributed to strong growth, with B2B revenue hitting $9.5m, up 77 percent H1 19. Managed services acquisitions have also been good for business, contributing “an additional $2.1m in accretive revenue for the half.”
The update also revealed that Spirit has “Signed [a] Trial JV with Vicinity Centres to roll out new transmission towers across key shopping centres and to provide IT services to retailers.”
Vicinity Centres owns and/or manages 63 retail properties, among them the flagship Chadstone mall in Melbourne. If Spirit can get a foothold in those properties, and their myriad tenants, it could give the carrier all sorts of growth possibilities – especially if it can parlay the position into work across chains that reside in multiple Vicinity properties!
Other items of interest the company revealed to investors included:
- Total revenue growth up 33 percent to $12.3M on H2 19 and up 51 percent on H1 19.
- Recurring revenue up three percent (11 percent annualised) in Q2 over Q1.
- Spirit X digital platform showing immediate impact. In Dec 19 new sales up 87 percent YoY and a record $1.9M in Total Contract Value sold in a short/holiday period month.
- B2B average contract length sold now at 36 months in Q2. Up 4 months on H1.1
- B2B TCV2 for H1 20 up 32 percent on H2 19 and up 83 percent to H1 FY19. B2B services including pending installations for H1 up to $9.8M (pending installation $2.7M)
- Strong balance sheet: total $7.31M available (at end of Q2 $2.31M cash & $5.0M CBA facility for acquisitions
The company also reported the following milestones for its data networks:
- Sydney network expansion of 2,000km2 of 50Mbps -100Mbps coverage across Sydney metropolitan area potentially reaching a further 2.5 million people and more than 50% of Sydney’s populated areas.
- 200km2 of high speed 1Gbps coverage with 33 network-ready (lit) buildings with minimum speeds of 100Mbps.
- Launch of Horsham network completed on budget and on time for the VIC Gov with signed customers.
- Start of build of Morwell network for VIC Gov.
Spirit has also announced its acquisition of CloudBT has closed.