Australian manufacturer of cellular M2M products, NetComm Wireless (ASX: NTC) has released its results for the six months to 31 December 2014 saying they reflect “the continued evolution of NetComm into a leading M2M company.”
CEO and managing director, David Stewart, said: “With a number of attractive strategic relationships and new business opportunities globally, NetComm has made further investments in people, skills and infrastructure to put the company in a strong position for its next phase of growth.”
He added: “While revenue was marginally higher, the mix of revenue continues to evolve. M2M sales accounted for 44 percent of total sales in the first half, as our M2M revenue mix develops. The Ericsson AusNet Services smart metering contract was substantially completed last financial year and these revenues were largely replaced by the Ericsson NBN[fixed wireless network] contract during the first half. Additionally, revenue from NetComm’s base business came in slightly higher than in the previous year.
- Revenue was marginally higher at $30.52m. (1H14: $30.47m)
- EBITDA was up 16.3 percent to $2.29m (1H14: $1.97m) after business reinvestment of $1.2m
- NPATwas up 124.5 percent to $0.363m, (1H14: $0.162m)
- Balance sheet remains strong.
During the half year NetComm signed an M2M distribution agreement with Arrow Electronics in North America and also established a contract with Tele2, a regional European carrier.
NetComm says it expects to continue its growth in 2H15 and beyond as it delivers further M2M contracts in line with its strategic plan to grow market share in the rapidly expanding global M2M market. The company expects full year FY15 EBITDA to be in excess of the $5.2m generated in FY14, after increasing investment back into the business by approximately $1.6m.
Stewart said: “We are continuing discussions and trials in relation to a number of M2M and rural broadband opportunities in a range of overseas geographies. If these opportunities translate into orders, they will result in additional revenue and earnings growth, with a lag between contract and delivery, spreading some of the benefit to later reporting periods.”
He claimed that NetComm was “in a unique position with multiple attractive growth opportunities available globally in an industry experiencing substantial underlying growth [and] the company has strategic relationships with some of the world’s leading telecommunications companies and service providers.”