Brisbane technology company wows the ASX with its growth prospects. Check out what spurred them on during the year of COVID-19.
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The technology services provider has boosted its numbers across the board as it brushed off the effects of COVID-19 for the December half-year.
The Brisbane company’s revenue was up 17% compared to the same half-year 12 months prior. Earnings before interest, taxes, depreciation and amortisation (EBITDA) also increased 28% and net profit after tax before amortisation shot up 12%.
The only figure down was net profit after tax, which shrunk 23%.
The market responded warmly to the numbers, pushing the Over the Wire share price up to $3.99 by close of trade Wednesday.
It had been as high as $5 in the past 12 months, but the rally was some relief for shareholders who saw it plunge from $4.28 since the end of last year.
The company on Wednesday morning also announced an interim dividend of 1.75 cents per share fully franked. This is up slightly from the 1.5 cents delivered this time last year.
Over The Wire’s busy half-year
The big events for the tech company over the December half-year were acquisitions of 3 businesses over 2 transactions. J2 Australia and Zintel were acquired on 31 August and Digital Sense came onto its books on 30 October.
Naos Asset Management reported in January that it was bullish about these acquisitions.
The investment firm forecast that EBITDA could see a $14 million boost over the next two years and the normalised EBITDA annual run rate could hit $35 million in financial year 2022.
J2 and Zintel brought in about 9,000 business customers.
The acquisitions also reinforced the recurring nature of Over The Wire’s turnover.
The half-year ending 31 December saw it rake in $45.9 million in recurring revenue, which was more than 91% of total turnover.
The company has a stated aim of keeping that rate above 90%.
Over The Wire provides software, hardware, telecommunications and cloud services to enterprise and government clients. It was established in 2007 in Brisbane, and now has 150 employees with branches in Sydney, Melbourne, Adelaide and Auckland.
Co-founder Michael Omeros still leads the company as managing director.
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Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Over The Wire Holdings Ltd. The Motley Fool Australia has recommended Over The Wire Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.