Vonex boosts revenue amid rapidly expanding telecommunications market
Vonex chief executive officer Matt Fahey says the company is excited to deliver further growth in the year ahead.
Telecommunications company Vonex (ASX: VN8) has revealed a 67% rise in revenue to $14.94 million for the December half year (H1 FY2022) – closing the period out with $8.34 million in cash to fund its growth strategy.
Describing itself as a “full-service, multi-award-winning” telecommunications company, Vonex provides phone and internet services to Australian businesses and individuals.
The company attributed the strong H1 FY2022 performance to a “rapidly growing” customer base and continued market expansion.
Contributing to the increased revenue was a $34.5 million in annual recurring revenue at the end of December, which was a 103% year-on-year rise.
For the December quarter (Q2 FY2022), Vonex achieved $7.72 million in cash receipts – up 78% on the previous corresponding period.
Growing retail business
A major reason behind Vonex’s strong performance was what it describes as a “transformational acquisition”.
The company acquired Direct Business operations from MNF Group in August last year and has continued to grow small-to-medium enterprise (SME) customer numbers and contracted revenue.
This resulted in the joint entity’s total contract value of new sales in November exceeding $1 million, which was a record for Vonex’s retail business.
It also represents a 50% increase on November 2020, and was achieved despite ongoing challenges of COVID-19 lockdowns and restrictions across Melbourne and Sydney.
For Q2 FY2022, total contract value of new customer sales expanded to $2 million.
Additionally, Vonex has about 90,000 registered active users of its PBX cloud-based phone service, which is 114% higher than 2020.
Vonex noted this was also a “key indicator” of its business development progress.
Voiteck acquisition
Boosting its expansion potential was Vonex’s acquisition of Voiteck last month.
Voiteck provides voice and internet services to SME customers in South Australia. It currently services more than 10,000 hosted PBX phone systems across 1,000 customers from a range of markets including aged care and community clubs.
According to Vonex, the Voiteck acquisition launches it into the South Australian market – offering “exciting growth opportunities”.
Voiteck also provides a physical presence in state with its showroom in Adelaide’s CBD.
Wholesale business continues expanding
While continuing its strategy of pursuing growth via organic and inorganic channels, Vonex’s wholesale division was also expanding.
Its Mobile Voice division was up 31%, and NBN with 4G back up increased 26% over the previous calendar year.
“Vonex’s flagship IP voice product has also delivered significant ongoing growth, with wholesale revenues up 34% year-on-year – reflecting strong achievement of cross-selling,” the company noted.
Additionally, Vonex has rolled out its 5G services to its customers – providing another value proposition to drive sales.
The company expects ongoing sales contribution as the 5G roll-out gathers pace with Optus as its 5G partner.
2022 outlook
Vonex says moving into 2022, it is “well placed” to capitalise on its expanding market presence, combined with lower cost base and capacity to boost cross-selling opportunities.
The recent acquisitions of Direct Business and Voiteck will facilitate Vonex’s organic growth plans.
“Through these two deals, Vonex is welcoming a highly experienced combined new team of 40 staff in Sydney, Melbourne and Adelaide, and approximately 6,000 new SME customers and 180 new channel partners to its platform,” the company stated.
Additionally, Vonex is pursuing growth via lead generation, brand awareness, average revenue per user, cross-selling, product range expansion, and network cost efficiencies.
As well as organic growth, Vonex will also continue disciplined merger and acquisition activity throughout FY2022 and FY2023.
It says it will target profitable IT and telecommunications businesses that offer potential for growth in revenue, profit and earnings per share.
The Australian Communications and Media Authority forecasts the nation’s telecommunications industry will rise from $44 billion in 2018 to $47 billion by 2022.