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CommsChoice Group Limited (ASX:CCG) is an IT company which provides hosted services, data, enterprise networks and cloud-based communication services to its customers. On 26 February 2019, the company has announced its financial results for the half year ended 31 December 2018.
The revenue for the company stood at $10.7 million on 1HFY19, representing 12% rise over the last six months. The underlying EBITDA was $0.7 million up by 26% on the prior period of 2HFY18 which was $0.5 million. The net cash of the company stood at $1.3 million with no debt.
The key operational highlights include that the company received a large order from an existing client in the 2nd quarter, which will help them to expand and upgrade the existing SD-WAN network of the company, through validation of their technology and strategy and delivering significant cost savings to the client in the process.
The company achieved a significant milestone as they have completed the financial integration. It has deployed NetSuite across the consolidated business currently and have established the main trading entity CommsChoice Operations Pty Ltd. As per the previous announcement, the company expects to complete this overall integration by the end of the FY19 financial year.
The recurring revenue of the company is approximately 90% of total revenue for the half year to December 2018 which is an indication of a sound base to continue revenue growth in the business in 2019. Significant investment was made in sales and marketing capability to take advantage of the market opportunity presenting itself going forward.
The CEO of the company Ben Gilbert stated that after facing challenges in the first year as a listed company, they are pleased with the progress achieved by focusing on the key priorities as the company continues its business on the completion of integration and sales acceleration.
The chairman of the company, Mr. John Mackay, said that with the integration moving ahead well, the company is confident that it has the essential foundation to build a strong telecoms business to take advantage of organic opportunities currently and inorganic opportunities in the future in the rapidly growing enterprise segment of the telecommunications market.
Stating on the outlook of the company Mr. Gilbert said, that the company with its full integration is well placed to derive advantage from the opportunities it has. The market opportunity for junior companies operating in the enterprise segment of the telecommunications market is enormous, particularly for those that offer additional value, like CommsChoice. The sales pipeline is accelerating going forward in 2019, and the company is funded to deliver organic growth ahead.
On the price-performance front, the stock of CommsChoice Group Limited last traded at $0.099 with a market capitalization of ~$10.77 million. The stock has generated a YTD return of 43.48% and posted returns of 62.30%, and 41.43% over the last three months and one-month period respectively. However, in the previous six months, it produced a negative yield of 34.0%. The stock has a 52-week high price of $0.220.
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