Aussie Broadband (ASX: ABB)
Aussie Broadband delivered another strong financial performance in FY24, with a 27% revenue increase and an EBITDA of $120.5 million (excluding one-off items), at the top end of expectations set in the February half-year update. The company’s strategic acquisition of Symbio has not only accelerated Aussie Broadband’s growth strategy but also strengthened the leadership team, paving the way for enhanced operational efficiency and future growth opportunities. In a notable milestone, Aussie declared its first dividend in FY24, signifying the Group’s maturing business model and robust after-tax cash flows, even as it remains in growth mode.
Statutory revenue reached nearly $1 billion, reflecting an impressive 27% annual increase, underscoring the management team’s effective strategic execution. Gross margin also improved by 0.7 percentage points, reaching 36.1%, indicating consistent margin strength across customer segments. Symbio contributed $12 million to EBITDA in FY24, with $600k in immediate synergies, while long-term synergy potential of $8-12 million by FY26 has been identified. The Group anticipates further positive contributions from Symbio in the coming financial year, with integration continuing smoothly. In FY24, Aussie Broadband also expanded its Fibre network, a move aimed at enhancing infrastructure ownership economics. This network expansion will drive cost-efficiency, competitiveness, and long-term margin growth, aligning with the company’s infrastructure-focused growth strategy. A commitment to 100% renewable energy across all operational sites by FY28 further supports its sustainability initiatives, likely appealing to environmentally conscious investors.
The launch of "Buddy Telco" in July marked Aussie’s entry into the price-sensitive segment, addressing customers impacted by cost-of-living pressures. Within months of launching, Buddy Telco secured over 4,500 connections, providing a digital-first, lower-cost option that can help retain cost-conscious customers and attract new segments who may not have otherwise chosen Aussie. Aussie Broadband continues to exhibit strong growth across key metrics, with a 51% revenue CAGR and 150% EBITDA CAGR over recent years. Strategic investments in infrastructure have been instrumental in these results and are expected to drive sustained growth moving forward. Additionally, the company has secured partnerships with high-profile clients within the enterprise and government sectors, reinforcing its competitive edge in this space.
The company has reaffirmed its FY25 EBITDA guidance at $125 to $135 million, inclusive of the Buddy Telco investment, with capital expenditure projected between $55 and $60 million. With consistent growth across its strategic segments, an expanding infrastructure base, and a maturing customer offering, Aussie Broadband is well-positioned for continued success in the coming financial year and beyond.
WiseTech Global Limited (ASX: WTC)
The stock price of WiseTech Global Limited has become highly volatile, and recently declined by 25% over the previous month. However, following the announcement of a leadership transition, the company's shares surged initially by 22%. The founder and chief executive officer of the company, Richard White, will resign as CEO and Executive Director but will remain associated with the company as a consultant with his focus areas both on product development as well as business development after a short leave. He has reaffirmed his commitment, staying hard at work to advance product innovation in global logistics.
The company achieved very strong financials for the year June 30, 2024, reporting a total revenue of $1.04 billion, 28% above the prior year. Its fortunes in the success were attributed to a 33% growth in its CargoWise platform, which deals with large global freight forwarders. It is also clear that the company improved significantly on its EBITDA margin. During the fourth quarter, EBITDA run rate are at 50%. WiseTech is an example with the strong flow of cash, plus its strategic investments into research and development at 41% of its revenue show that it's on a strong track to innovate and grow.
WiseTech's strategic vision focuses on becoming the operating system for global logistics. The company continues to make strides in its six key development areas and has expanded its workforce, particularly in product development roles. Its recent acquisitions have strengthened its market position, enabling WiseTech to enhance its CargoWise platform and provide comprehensive solutions to the logistics industry. Through these ongoing initiatives, the company's developing capabilities as well as its plan to improve operational efficiency are visible.
Ambitious revenue targets are set for FY25 by WiseTech, targeting $1.3 billion-$1.35 billion in revenues, a 25%-30% gain from last year. The company is expecting cargoWise to continue its previous success with a growth rate achieved between 31% and 37%. The company is gradually being transformed under the new leadership of WiseTech; however, its approach towards innovation does not lose out on the key position in the strategy. The company has the potential to succeed in creating more value for the customers and shareholders in the near future.
(Source: Company Reports)
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