The Over The Wire Holdings Ltd (ASX: OTW) share price is pushing higher on Thursday following the release of its full year results.
In afternoon trade the telecommunications, cloud, and IT solutions provider's shares are up over 2% to $4.23.
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How did Over The Wire perform in FY 2020?
Over The Wire was a solid performer in FY 2020 and achieved growth across its entire business.
For the 12 months ended 30 June 2020, the company posted revenue of $87.6 million, up 10% on the prior corresponding period. The main drivers of its growth were the Voice and Service & Security segments.
The Voice segment recorded a 19% increase in revenue to $19.6 million and the Service & Security segment also delivered 19% revenue growth to $20.3 million. This was supported by a 12% lift in Hosting revenue to $10.1 million. The laggard in the group was its key Data Networks segment, which recorded a modest 2% rise in revenue to $37.5 million.
However, due largely to a 13% increase in overhead expenses, the company's earnings before interest, tax, depreciation and amortisation (EBITDA) grew at a slower rate of 1% to $17.4 million. Though, it is worth noting that this was slightly ahead of the market consensus estimate.
Finally, on the bottom line, Over The Wire's NPATA fell 2% or $0.1 million year on year to $8.8 million.
Challenging market conditions.
Over The Wire's Managing Director, Michael Omeros, was pleased with the company's performance in challenging market conditions.
He said: "In challenging market conditions impacted by COVID-19 restrictions, our team has shown commendable focus and resilience. We are delighted to deliver a full year result that exceeds the profitability expectation outlined in our May 2020 Business Update, and an exceptional customer retention rate of 98.5%."
"Our three solution pillars Cloud. Connect. Collaborate. are benefitting from industry tailwinds and our investment in capability and systems over the last twelve months positions us well to take advantage of these. We are excited by the potential opportunities for organic growth complemented with quality strategic acquisitions that accelerate the delivery of our strategy," he added.
Outlook.
No guidance was given for FY 2021, but management made a few comments on how the business is performing.
It commented: "Our business performance is tracking well against our strategy and we continue to generate positive operational cash flow and maintain a strong balance sheet. We will continue to proactively support our customers and remain well positioned to continue to deliver organic growth and pursue further accretive acquisitions. The Company remains confident that it will achieve solid growth in FY21 and continue to deliver value for shareholders."
