Hostech continues "aggressive" expansion into regional Australia

Racks up seven acquisitions since January with plans for more

Hostech (ASX:HTC) has finalised its seventh acquisition this year, and has no plans to slow down.

The ASX-listed data centre company announced the purchase of D2K customer base in Townsville for $90,000 and 1.1 million Hostech shares alongside the company’s preliminary financial results.

The new acquisition joins the likes of 5 Star Telecommunications, Officelink Plus, Anittel Pty Limited, Accord technologies, Axxis Technologies and Aspirence, all acquired by the company for a total $9.1 million between January and April this year as part of an aggressive acquisition plan which executive chairman, Peter Kazacos, told shareholders would help the company expand further into regional Australia.

“Our aim is to provide the geographic diversity and technical competence to offer converged IT and telecommunications solutions that meet the under-served SME sector, particularly in regional Australia,” Kazacos said in a statement.

D2K area principle, Matthew Drane, will oversee the migration of Townsville customers between D2K’s data centre and Hostech’s own Anittel customer service platform.

Hostech now counts 230 among staff - up from 30 employees last year - in 15 locations through Australia offering a variety of telecommunications and data centre solutions as well as managed services for wireless network. Kazacos, a founder of Anittel, joined Hostech following the $4.97 million merger and was appointed executive chairman in May.

Integration of the new businesses since acquisition has seen all employees move to a single systems for finance, payroll, HR, communications, email, and single dedicated teams for all services.

The acquisitions have seen Hostech’s revenues increase from $2.4 million to $19.4 million the six months from 31 December 2009 to 30 June 2010, and full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.2 million.

The company’s contracted voice and data market performed strongest, bringing in $5.2 million of revenue, while the managed services division inherited from several of Hostech’s acquisitions brought in $1.7 million.

The company reported a loss overall for the 2010 financial year of $700,000, but claimed success in reducing loss from the $1 million loss it reported in the 2009 financial year.

The company has forecast a significant increase in revenues in the 2011 financial year to between $70 and 90 million, with an EBITDA profit of between $7 and 9 million.

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