Turnaround Company25 Apr 2022 15:23
At the AGM, Richard Horsman, Chairman, will make the following statement:
"I am pleased to update shareholders on positive trading in both Q1 and Q2 of the current financial year, as the business executes on its strategy of achieving higher revenues with strong margins and stable cash generation.
"During the first quarter, overall demand for our services remained strong and correspondingly when compared to Q4 of the last financial year, revenues have increased by 9%, in line with management expectations. This has translated into a growth in gross profit of 17% and an improvement in EBITDA of 19% from FY21 Q4 to FY22 Q1. This momentum has carried on into Q2 of our current financial year, with orders particularly strong in March."
"Furthermore, we are experiencing a material increase in Toople's high bandwidth leased line orders. These orders have significantly higher values and greater margins than our core broadband orders. This is significant as it gives us better visibility on our revenue given that 50% of the initial revenue consideration is received upfront and 50% paid on customer installation completion. Often customers require civil engineering work to complete installation and in some instances this can give a lead time of three to six months for completion."
"Importantly we are growing the business without any substantial increase in the cost of customer acquisition and our fixed operating costs remain stable. Our sales support function in Durban South Africa, is now back to working in the office following the easing of Covid restrictions, and that is translating into higher productivity and sales figures. We are also achieving increased customer contact rates compared to those achieved in the past 18 months.
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