M2 execs net salary boosts as profits double
- 30 August, 2010 12:13
The executives of M2 Telecommunications (ASX:MTU) have seen a collective pay rise of almost double the amount of the previous financial year, coinciding with a doubling of revenues and profits over the same period.
The telecommunications wholesaler’s directors and executives received a collective salary of $2.21 million in the year to 30 June 2010, up from $1.43 million in the 2009 financial year, largely due to pay rises across the board and the addition of a new executive, head of company secretary and legal affairs, Kellie Dean.
The pay rises are unlikely to trouble shareholders who saw the company’s share price increase by 35c from a low of $1.40 in February to $1.75 last week. The rise follows an increase in revenues from $202.48 million in the 2008/2009 financial year to $406.1 million in the year to 30 June 2010.
The company also reported profit before tax of $24.16 million, more than double $11.13 million it reported the year before.
Total earnings before interest, tax, depreciation and amortisation (EBITDA) for the company were $31.41 million, a 136 per cent increase over last year’s $13.33 million.
“In last year’s report I commented on our awareness of the need to remain focused upon those things which would enable us to consolidate our strengthened position and to continue to sustainably expand the business,” M2 Telecommunications chairman, Craig Farrow, wrote in an ASX letter to shareholders.
The company’s managing director and chief executive, Vaughan Bowen, told shareholders the revenues could be attributed to organic growth aided by further integration and focus on the People Telecom and Commander brands which helped drive profits.
Across the year, M2 Telecommunications transitioned Commander franchise agreements into direct agent agreements for the company, incentivising salespeople to drive growth, while also launching new products and portfolios for both brands.
Some of M2’s 426 staff in Sydney and Adelaide were also consolidated into centres of excellence.
M2 has continued on its buying spree, having finished integrating the off-net assets of Clever Communications (ASX:CVA) into the company by the end of June after a $5 million acquisition, and the business assets of Bell Networks early in August after a $4 million acquisition. The two new purchases are expected to contributed $8 million and $13 million to the company over the next year, respectively.
The company has racked up seven acquisitions of business and assets since 2007.
M2 Telecommunications is forecasting further growth for the next financial year, with a seven per cent increase in revenue and 33 per cent increase in EBITDA, to a height of $42.5 million.
“M2 remains ‘infrastructure light’, utilising the network infrastructure of (principally) the largest telcos in Australia and New Zealand combined with limited company-owned infrastructure,” Bowen said. “This strategy enables the Company to continue to generate strong cash flows without the requirement for heavy capital investment and also provides us with technological flexibility so as to ensure we continue to provide our customers with products and services which are relevant to their requirements.”