Webcentral turns a corner post-5GN acquisition
- 31 August, 2021 15:22
Joe Demase (5G Networks, Webcentral)
Webcentral has finally turned a corner with its finances after being acquired by, and then merged with, 5G Networks, in what it claims are record results.
The former Arq Group, which not too long ago appeared on the brink of closure, has seen its post-tax loss fall by 33.7 per cent to $61.4 million.
However, in its first full year results since being acquired by 5GN, Webcentral recorded, for the 18 months ending 30 June, revenue declining to $78.3 million, a drop of 6.4 per cent compared to the 12 months prior.
The 18-month period and 12-month comparison is due to the IT services company moving its reporting period to align with 5G Networks’ following its acquisition, and as such captured its whole financial year and then an additional six months to bring it in line with its parent.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was also down by 19.4 per cent, to $11.9 million.
Additionally, during the last six months, which have been entirely under 5G Network’s control, EBITDA rose by 391 per cent compared to the six months prior and was 47 per cent higher than the six month period before that.
This, it claims further, reflects “the significant initiatives implemented since the change of control by 5GN in October 2020”.
“The group’s revenue has been stable since the change of control in October 2020 and the group is confident that revenue growth will return across all four core services of domains, hosting, email and digital marketing as these short term issues are resolved,” Webcentral claimed.
Indeed, domains, hosting and digital were all up for the six month period by 3.6 per cent to $11.7 million, 12.9 per cent to $8.2 million and 11.4 per cent to $4.7 million, respectively, while email was down by 4.1 per cent to $4.8 million.
Meanwhile, 5G Networks recorded what it claimed was record revenue and underlying EBITDA for the 12 months ending 30 June, which rose by 77 per cent year-on-year to $87 million and 144 per cent year-on-year to $15.5 million, respectively, the latter of which excluding acquisition costs and share option costs.
Its net loss also increased however by more than triple, increasing 233 per cent to just under $5 million for the period.
On the results, managing director of both Webcentral and 5G Networks Joe Demase was optimistic about the future for the merged entity.
“The completion of the Webcentral takeover provides the group with significant organic growth opportunities leveraging Webcentral’s 330,000 customers through their online sales channel, offering 5GN’s suite of cloud, network and managed services,” he said.
The financial results of the two businesses follow the merged entity’s attempt of acquiring Perth-based IT service provider Cirrus Networks for roughly $26.3 million, with the provider claiming the offer does not provide enough benefits and represented an “inadequate control premium” and has told its shareholders to reject the offer.
