Credit: ASX
Comms Group’s moves to acquire and integrate businesses has hit its bottom line, cutting into its post-tax profit for the 2022 financial year by 219.2 per cent year-on-year, down to a loss over $600,000 into the red.
The loss during the 12 months to 30 June consists of acquisition, integration and restructuring costs of $1.4 million, as well as share-based payments of $700,000 and amortisation of intangibles at $1.4 million, including existing and acquired brands, customer contracts and an interest expense of $500,000.
The acquisition and integration costs, according to a statement posted on the Australian Securities Exchange (ASX), relate to its purchases of Switched On for $4.3 million in August 2021 and onPlatinum for an initial consideration of $12 million in February 2022 and a maximum total earn out of $18 million.
“The two acquisitions completed during the year have increased our presence in all three eastern Australian states and provided the Group with a significantly increased capability in the managed IT services market providing key IT services for corporate mid-market customers,” said Comms Group CEO and managing director Peter McGrath.
“Acquisitions completed in the prior year including Next Telecom and Binary Networks have traded within budget and expectation and provided significant financial benefit to the Group through the synergies extracted to date.”
Meanwhile, revenue was up 63.9 per cent to $41.3 million, which consisted of $24.4 million from its small- to medium-sized enterprise (SME) unit, $10 million from its global division and $6.6 million from its ICT arm, with the three segments formed during the last financial year as part of its restructure.
Its SME revenue in particular was strengthened from a year’s worth of performance from Next Telecom and Binary Networks, as well as 10 months from SwitchedOn. Meanwhile, SwitchedOn contributed roughly four months of revenue to its ICT division.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were also up, rising 28.1 per cent to $4.1 million.
