Huge Group earnings rise sharply - TechCentral

Huge Group earnings rise sharply

Huge Group CEO James Herbst

Huge Group has reported a 42% improvement in headline earnings per share for the year ended 28 February 2017, with management optimistic about future strong performance.

Revenue rose by 14% to R246m, while operating profit soared by 84% on an operating margin improvement of 62% to 17,2%.

Earnings before interest, tax, depreciation and amortisation, better known as Ebitda, was R53m, an increase of 61% on the 2016 number. Ebitda margin expanded from 15,1% to 21,4%.

“This year’s result has confirmed our belief that Huge Telecom has a solid business model and that our fixed location voice service using GSM is a viable substitute for the fixed landline,” said CEO James Herbst in a statement.

Zunaid Bulbulia, the former MTN South Africa CEO who was recently appointed as Huge Group’s chief financial officer, “helped champion the Huge Telecom telephony service to the mobile operators and he has helped us reduce the cost of sale”, said Herbst.

“He has been instrumental in securing full-suite functionality for our telephony service, including line hunting in hunt groups, calling name presentation and geographic number portability. This is going to impact our business positively in ways you cannot imagine.

“The cost-of-sale reductions we negotiated in late February this year will only be felt in the 2018 financial year — they had no impact on the 2017 result,” he added, saying the recent acquisition by Huge Group of Connectnet Broadband Wireless will also only contribute to earnings in the 2018 financial year.

The company said it will continue to grow organically and by acquisition.

No dividends were declared in the 2017 financial year.

Huge Group was last trading on Wednesday morning at R8,08/share, unchanged on the session. In the past year, the share has added 55%. Over a five-year period, it has jumped by almost 800%.  — © 2017 NewsCentral Media

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