Telco Network Owner & Operator; Corporate/Government Focus

Astride the Telco and IT Sectors, Amcom has a recurring annuity style revenue model, a strong financial position with low net debt and is well positioned for further growth.   It has nationwide reach with its own networks in Perth (1,800km), Adelaide (230km) and Darwin (180km). It also uses third party networks in Melbourne, Sydney and Brisbane. Amcom offers a wide range of services -

• Data Networks       • Internet       • Data Centre

• Hosted IP Voice & Video       • IT Integration

• IT in the Cloud       • Managed Services

Amcom observes that the IT and Teldo sectors are converging, particularly in the areas of cloud, IP voice, managed services and unified communications. It appears well placed to leverage this opportunity, having some 900 corporate and government customers and its own fibre networks, data centres and private cloud offerings. The acquisition of L7 Solutions should enhance its execution capability.

Amcom maintains its earlier guidance of double digit NPAT growth from its wholly-owned operations before one-off items, and sees accelerated growth in FY13.

 

Recent News Highlights

As at 31/12/2012 : see details at www.amcom.com.au   (new window? Shift+Click)

21/11/2012    Annual General Meeting 2012, Chairman's Speech & Presentation

25/09/2012    FY12 Annual Report

01/05/2012    Investor Presentation - Macquarie Securities Conference

20/02/2012    Half Year Results

23/11/2011    Annual General Meeting 2011

22/11/2011    Acquires IT group L7 Solutions P/L

17/10/2011    Amcom Cloud commisioned for University of WA

28/09/2011    In specie - ATO Class Ruling issued

27/09/2011    FY11 Annual Report

05/09/2011    Update; 1 for 3 Share Consolidation completed on 30 August

19/08/2011    Ceasing to be a substantial shareholder for IIN

Highlights of 1H12 :

Strong sales growth across all product lines; fibre sales for the first half were up 45% on the pcp; the product offering has broadened, helping cross-sell and acquiring new customers.

Amcom has been investing in FY12 for the next step change in FY13.

It now has a clean structure with the in specie distribution of its previous iiNet shareholding.

AMM has seen a three year compound growth rate of 31% in revenue, 33% in NPAT, 23% in EPS and 26% in dividend. The 1H12 result showed 35% revenue growth to $55.9m, 20% growth in EBITDA and operating unit NPAT to $16.6m and $8.4m respectively while operating unit EPS rose 21% to 3.5¢. The in specie profit was a further $18.6m. The dividend was maintained at 1.8¢. Operating cash flow was up 30% at $14.1m. Cash flow conversion has been accelerating as the business has grown.

Half-yearly Performance & Estimates - AMM

Year-end June	FY11A	1H12A	FY12A	1H13A	FY13A	FY14E	FY15E
Sales, $m	84.4	55.5	131.4	80.0	157.5	177.0	191.0
EBITDA, $m	36.6	16.4	34.1	19.2	40.1	46.8	54.4
EBIT, $m	28.0	12.1	25.2	14.5	30.6	35.8	42.5
Report NPAT, $m	21.6	8.4	16.9	10.0	20.8
Adj. NPAT, $m					20.8	24.0	28.6
Reported EPS, ¢	3.00	3.00	7.00	4.00	8.00
Adjusted EPS, ¢					8.00	9.80	11.70
EPS %FY/Growth		43%	133%	50%	14%	23%	19%
Dividend, ¢	1.6	1.8	5.0	2.0	5.5	6.50	8.00
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	42%	0	26%	24%	25%	26.4%	28.5%
NPAT Margin	25%	0	13%	12%	13%	13.6%	15.0%
ROE, %	13%	0	15%	9	17%
EBIT/Interest	23.8	0.0	20.8	18.8	19.3
Net Debt / Equity	-0.04	0	0.07	0.08	0.10
CashFlow/Sh, ¢	4.0	5.9	13.4	7.0	13.6	14.3	16.9
Y/E Shares, m	721.1	241.6	241.6	244.6	244.6

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios.

Half-year Performance & Estimates - AMM

Year-end June	1H11A	FY11A	1H12A	FY12A	1H13A	FY13E	FY14E
Sales, $m	41.2	84.4	55.5	131.4	80.0	165.0	183.0
EBITDA, $m	16.7	36.6	16.4	34.1	19.2	41.0	47.5
EBIT, $m	12.6	28.0	12.1	25.2	14.5	31.0	36.2
Report NPAT, $m	9.9	21.6	8.4	16.9	10.0
Adj. NPAT, $m					10.0	20.3	24.2
Reported EPS, ¢	1.00	3.00	3.00	7.00	4.00
Adjusted EPS, ¢					4.00	8.24	9.80
EPS %FY/Growth	33%		43%	133%	33%	18%	19%
Dividend, ¢	0.60	1.6	1.8	5.0	2.0	5.80	6.90
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	48%	42%	0	26%	24%	24.8%	26.0%
NPAT Margin	29%	25%	0	13%	12%	12.3%	13.2%
ROE, %	12%	13%	0	15%	9%
EBIT/Interest	32.7	23.8	0.0	20.8	18.8
Net Debt / Equity	0.01	-0.04	0	0.07	0.08
CashFlow/Sh, ¢	1.8	4.0	5.9	13.4	7.0	12.6	14.6
Y/E Shares, m	721.1	721.1	241.6	241.6	244.6

Notes

EPS Growth compared with the pcp is shown in most columns, except 1H10A and 1H11A which show the first half % of full year EPS.

Half-year Performance & Estimates - AMM

Year-end June	1H10A	FY10A	1H11A	FY11A	1H12A	FY12E	FY13E
Sales, $m	28.9	62.3	41.2	84.4	55.5	132.0	165.0
EBITDA, $m	13.2	30.0	16.7	36.6	16.4	35.0	42.6
EBIT, $m	9.9	23.2	12.6	28.0	12.1	25.3	31.9
Report NPAT, $m	7.6	18.2	9.9	21.6	8.4
Adj. NPAT, $m					8.4	17.0	21.7
Reported EPS, ¢	1.00	3.00	1.00	3.00	3.00
Adjusted EPS, ¢					3.00	6.95	8.85
EPS %FY/Growth	33%		33%	0%	200%	132%	27%
Dividend, ¢	0.40	1.4	0.60	1.6	1.8	3.85	4.90
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	48%	48%	48%	42%	22.1%	26.5%	25.8%
NPAT Margin	29%	29%	29%	25%	11.3%	12.9%	13.2%
ROE, %	12%	12%	12%	13%
EBIT/Interest	32.7	32.7	32.7	23.8	39.03
Net Debt / Equity	0.01	0.01	0.01	-0.04	0.28
CashFlow/Sh, ¢	1.7	3.3	1.8	4.0	5.9	11.7	14.6
Y/E Shares, m	717.0	721.1	721.1	721.1	241.6

Notes

EPS Growth compared with the pcp is shown in most columns, except 1H10A and 1H11A which show the first half % of full year EPS.

Company Overview

Customers are 52% corporate, 26% government, 12% wholesale and 11% reseller.

Amcom claims customers select it for its simple, competitive and flexible pricing; its network performance & reliability; its customer service culture, strong account management and innovative solutions tailored to customers’ requirements.

L7 Solutions P/L was acquired in November 2011 for $15m. L7 is an information technology company, specialising in the provision of IT integration solutions, managed services, advisory and related services, with revenue of $40m in FY11. Established in 2004, it has a strong reputation having built its business organically in the Perth market. Now employing 130 staff, it has around 200 clients across the Enterprise and Government sectors.

Amcom’s CEO Clive Stein said the acquisition was an excellent strategic fit for Amcom as it provided complementary product offerings, leveraging existing fibre network assets and opening opportunities to offer new services into Amcom's existing customer base. The extensive skills capability of the L7 business should enable Amcom to accelerate its recently launched Cloud offering.

L7 is expected to deliver at least $4m in EBITDA in FY13, and would thus be strongly EPS accretive that year. Combining L7’s IT skill base with Amcom’s infrastructure should place Amcom ideally to provide customers with comprehensive end to end solutions.

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Russell Research in the Media

Stock Picks for The Bull.com.au -  24 June 2013

BUY Amcom Telecommunications Limited (AMM)

A rapidly growing Perth-based IT and telecommunications group in the S&P/ASX 300 Index. A wide fibre-optic network supports national telecommunications, data, IT and cloud managed services to business and government. Expect earnings to continue at about a 20% growth rate with a franked yield of 4% in FY14 and negligible debt. Market reaction to a sale of 8 million shares by Wyllie Group, now 'comfortable' with its remaining 7.8 million, creates a good 'buy' price.

Stock Picks for Sunday Herald Sun – 24 February 2013

BUY Amcom Telecommunication, AMM, $1.69

The telecom provider with attractive fibre, cloud and IT offerings grew revenue and profits strongly last half and expects 20 per cent full year growth.

Stock Picks for Sunday Herald Sun – 29 July 2012

Buy: Amcom Telecommunications Limited, AMM, $1.16

Leveraging its wholesale fibre optic network well, with no debt. We expect the full year and beyond to build on the strong first half.