M2 Telecommunications CEO steps down

Follows record revenue and earnings results

M2 Telecommunications (ASX:MTU) founding chief executive officer and managing director, Vaughan Bowen, has announced plans to step down amid a record revenue and earnings result at the diversified telecommunications service provider.

In an ASX statement, the telco said Bowen would take on an executive director role and allow M2’s chief operating officer, Geoff Horth, to take on the chief role.

Horth has been at the company for more than two years and has some 20 years’ experience in the Australian telecommunications industry.

In his new role, Bowen will be responsible for pursuing potential merger and acquisition opportunities, building relationships and advising the new CEO on company strategy.

The announcement follows the release of the company’s 2011 financial results, which include a net profit after tax (NPAT) of $27.6 million, up 72 per cent year-on-year, for the year to 30 June 2011.

The diversified telecommunications service provider also recorded earnings before interest tax depreciation ad amortisation (EBITDA) of 48.3 million, up 54 per cent year-on-year. Earnings per share also increased to 22.6 cents, up 56 per cent.

In a separate ASX statement, Bowen said a 47 per cent increase in operating margins during the year stemmed from considerable efforts to improve efficiency across the group along with improvements in the company’s wholesale cost base.

“Similarly, the guidance we have issued today for the [financial year 2012] highlights a continued improvement in operating margins, whilst also being a year in which we will be investing significantly in new growth and in delivering further business-wide efficiencies, to ensure we are fit and ready to take on the challenges of a rapidly evolving telecoms landscape,” Bowen said.

The 2012 guidance includes revenue forecasts of between $380 and $420 million, a reduction of six per cent on FY11. EBITDA margin is forecast to increase to 15 per cent — itself an increase of 33 per cent on the 2011 financial year.

The 2011 results follow an acquisition spree, with the assets of mobile services reseller, Edirect, being acquired in April for $5 million, while the mobile contracts and records of 15,000 Austar customers were purchased in February in a $2 million deal.

Clear Telecoms was also acquired in February for $24.5 million, netting some 20,000 SMB customer contracts and the assets of NZ telco, Black and White Group, were acquired in November.

Follow Tim Lohman on Twitter: @Tlohman

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