1800 Reversal of fortunes

Reverse corp sees rapid declines across its calling business

Reverse Corp (ASX: Rev) has seen a massive decline in its revenues and profits for the year to 30 June 2010 driven by declining call volumes and a strong Australian dollar.

During the year the reverse charge calling company recorded revenue from ordinary activities of $23.677 million, down $39.3 million the previous year.

Profit from ordinary activities after tax was $4.2 million, down from $13.3 million the previous year.

Earnings before interest and tax (EBIT) was $7 million, down from $19.4 million the previous year. The EBIT figure includes a $1.5 million impairment of the investment in the company’s subsidiary TriTel Australia.

According to the company, the impairment, the strong Australian dollar, declining call volumes and reduced margins due to increased variable charges were responsible for the large across-the-board declines.

During the year the company transitioned the management for its UK and Irish businesses to Australia. A mobile origination agreement was signed with Virgin Mobile UK.

The company was also progressing towards securing administration services for its Spanish business, while technical testing for new services in new Zealand had been concluded.

Looking ahead the company said it was focus on securing Telstra and VHA mobile origination in Australia, and further expanding its relationship with Telstra beyond a fixed line services agreement with the company through to 31 January 2011.

It was also working to realise further costs savings and access organic and acquisition-based growth opportunities.

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