Aussie Broadband Ltd (ASX: ABB) shares are starting the week in a very positive fashion.
In morning trade, the ASX telecommunication stock is up 13% to $3.52.
This follows the release of the broadband provider's full year results.
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ASX telecommunication stock jumps on FY 2024 results
- Revenue up 27% to $999.7 million
- Gross margin up 0.7 percentage points to 36.1%
- EBITDA before one-offs up 34.5% to $120.5 million
- Net profit after tax up 21.7% to $26.4 million
- Inaugural dividend of 4 cents per share
What happened during the year?
For the 12 months ended 30 June, Aussie Broadband reported a 27% jump to $999.7 million. This was underpinned by a NBN connections market share gain (6.6% to 7.4%), a 14% lift in total broadband connections to 684,299, and the acquisition of Symbio.
Thanks to margin expansion, the ASX telecommunication stock's EBITDA (before one-offs) grew at the quicker rate of 34.5% to $120.5 million. This ultimately led to net profit after tax increasing 21.7% to $26.4 million.
And with the company's operating cashflow before interest and tax rising 54.1% to $128.2 million, the Aussie Broadband board was able to declare its inaugural dividend of 4 cents per share. Though, this represents only a modest 1.1% dividend yield based on its current share price.
Management commentary
Aussie Broadband's co-founder and managing director, Phil Britt, was rightfully pleased with the company's performance in FY 2024. He said:
Aussie has had an excellent year, delivering strong financial results again with EBITDA growth of 34.5% to $120.5 million and revenue growth of 27% to $999.7 million. In our 20th year of operations, we have evolved into a leading technology and communications business with our fibre infrastructure and Voice networks providing a competitive advantage and setting the foundation for multiple growth pathways going forward. All of which is underpinned by our award-winning customer service.
The acquisition of Symbio is proving to be a hugely positive investment, boosting revenue streams and strengthening the Group's financial profile. The contribution to Aussie's results after just 4 months is substantial, adding $12 million EBITDA to the result.
Britt revealed that Symbio may not be its last acquisition. He adds:
With a healthy balance sheet, we are in an enviable position to make strategic investment decisions – whether that is in our own assets and infrastructure, on mergers and acquisitions, or providing a return to shareholders. I am proud to announce that based on the strength of the Group's balance sheet, we are delivering a fully franked dividend of 4 cents.
Outlook
The ASX telecommunication stock has had a strong start to the year, with net broadband connection growth of 13,023 in the quarter to date. Management highlights that this is particularly positive considering the price rise that occurred from July.
The company believes this leaves it well-placed to grow its earnings by 13% to 21% in FY 2025.
Inclusive of its investment in the new Buddy offering, its FY 2025 EBITDA guidance remains in the range of $125 million to $135 million.
Though, this will be done without John Reisinger, its co-founder and chief technology officer, who has advised of his plan to retire from Aussie Broadband, effective 31 October 2024.
