Superloop more than doubles revenue, delivers growth in underlying EBITDA, reaffirms full-year guidance

Superloop (ASX:SLC) has released its half-year financial results for FY2022.

For the six months ended 31 December 2021, Superloop reported total revenue of $119.8m compared to $53.3m in the prior corresponding period, an increase of 125.0%. Of this, 18.1% was recurring organic growth, with the remainder coming from the acquisition of Exetel, completed in August 2021.

The revenue contribution from the Exetel acquisition was strong in both the consumer business segment (up 220%) and the business segment (up 180%).

The wholesale business revenue also grew 12.8%, partially as a result of the Superloop Connect automated migration and management platform that now services more than 11,600 wholesale broadband services.

For the overall group, gross margin grew 60% from $24.7 million to $39.6 million compared to the prior corresponding period, a gross margin of 32.7%.

Underlying EBITDA (which excludes transaction costs related to the acquisition of Exetel, and the sale of Hong Kong wholesale network assets and certain Singapore assets) grew from $8.2 million to $9.1 million. This increase of 12.2% is post the additional $2.6 million of marketing spend compared to the prior corresponding period.

Paul Tyler, CEO and Managing Director of Superloop said “These very strong results underpin the confidence we have in our market strategy, first outlined last November, which is to help move the challenger providers towards 30% collective market share.

"At the centre of that objective is our infrastructure-on-demand offering that supports integrated, added-value services, and great customer service. In a market that continues to change almost every week, our focus remains the customer, and those service providers who support them.

"Throughout the first half of this financial year the Superloop group achieved some significant strategic milestones, including the completion of the acquisition of Exetel and the announced sale of the Hong Kong business and select Singapore assets.

“It is particularly pleasing to see the growth across all three segments, which demonstrates the strength and diversification of the Superloop business model. In the near-term, our focus will continue to be profitability and re-investment.

"Our consumer broadband subscriber numbers grew 220%, and 6,148 of that was net organic growth independent of those customers we acquired from Exetel.

"And in our wholesale and business segments, we've seen some marquee sales to customers that include NRMA, WiseTech Global, Merivale, Penske, Macquarie Telecom, Bendigo Telecom and Telair, amongst many others.

"Synergies in annualised operational costs were part of the strategy behind the acquisition of Exetel. We've fully achieved these run-rate savings by the end of the first half, which will now make a greater contribution in the second half.

"We also expect to complete the sale of our Hong Kong assets, and certain of our Superloop assets, to Columbia Capital and DigitalBridge Investment Management, subject to regulatory approval, by the end of this quarter."

Superloop has reaffirmed its expectation of an underlying EBITDA for FY22 in the $23.0 million to $25.0 million range.

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