Growth strategy pays off for Vox Telecom
Strong organic growth and strategic acquisitions boost alternative telco’s performance
Alternative telecommunications operator Vox Telecom has announced a 231% jump in revenues, to R869 million, in its unaudited results for the six months ending February 29, 2008. Operating profit for the period rose by 313%, to R67 million, and net profit by 271%, to R41 million. Earnings per share increased by 121% to 4.7 cents from the prior period.
The Group attributes its performance to strong organic growth in its voice and data businesses, combined with a successful acquisition strategy. Revenues for the interim period include three month’s contribution from ABSA Internet Access, Amvia and Telkom Ericsson (Namibia) as well as one month’s contribution from recent acquisition Storm Telecom.
“We’ve successfully combined earnings-enhancing acquisitions with excellent results from our existing core businesses,” says CEO Douglas Reed. “All our mature business units are showing strong organic growth, with the monthly contracted annuity base increasing to R170 million at the end of the period.” Reed says the integration of the various acquisitions has proceeded according to plan and the 2008 fiscal year will see a full 12-month contribution from prior acquisitions such as Orion Telecom.
“The second half of our fiscal year always shows greater growth than the first half,” notes Reed, “because of the seasonal downturn over the December and early January holiday period. We are also starting to see strong performance in our Vox consumer offering and an increase in voice traffic in our corporate voice business”.
“Vox Telecom is now well established as the leading independent telecommunications provider in South Africa,” says Executive Chairman Tony van Marken. “We have established a strong foundation to grow our voice and data businesses across all market segments. We are completing the integration of our recent acquisitions and are seeing market share gains in voice and data. As evidence of our progress we now provide essential telecommunications services to over 18,000 corporate customers and 160,000 consumers.”
Vox Telecom has an established voice and data network and interconnects with all the major operators including Vodacom, MTN, Cell C, Telkom, Neotel and the leading VANS, and believes the South African market is poised for further growth in both the corporate and consumer segments. “We have long been an established player in the data market, but we are now making our presence felt in the voice sector,” says Reed. “We see voice as a massive growth opportunity for Vox Telecom and believe our investment in this market segment is starting to pay off.”