Why is Uniti Group’s (ASX:UWL) share on the fast track today?

  • February 23, 2021 02:37 PM AEDT
  • Team Kalkine
Why is Uniti Group’s (ASX:UWL) share on the fast track today?

Source: Shutterstock

Summary

  • Uniti Group released its financial performance results for the 6 months ended 31st of December, 2020, showing exceptional growth during the period.
  • The company reported EBITDA increase of 307% to reach AUD29.3 million and the revenue increase of 148% to reach AUD54.6 million.
  • Uniti’s share market performance has been steady and on an upward path, with the share prices rising 3.5% since Monday to reach AUD2.03 per share.
Gold MTF non-AMP

Uniti Group (ASX:UWL) released its results for the first half of FY21, pointing to its strong performance during the period. The company reported revenue worth AUD 54.6 million, an increase of 148% over the same 6-month period in the previous year.

The company’s EBITDA also rose by a whopping 307% over the previous corresponding period to reach AUD29.3 million in the 6 months ending 31st of December, 2020. The telecommunication firm saw immense growth during 1H FY21 period.

The consequence of this profitable half-year result was a single-day uptick of 3.5% in the company’s share prices. Uniti is currently trading at a 5-year high of AUD2.03 per share. In a single year, Uniti’s share price has moved up by almost 31%.

Eventful Half-Year Period

The half-year period ending 31st of December, 2020, was an active period of growth and development for Uniti. During this time, the company completed accretive acquisitions of the OptlComm, Harbour ISP, and Telstra Velocity network assets.

The businesses are receiving impetus through greater digital services uptake, high consumption of the fibre, technology, strong residential property markets, and lifestyle factors making the fibre broadband an essential service, and expected inflation of the broadband prices.

Infrastructure Led Growth

Uniti holds three different business operations: Wholesale and Infrastructure, Consumer and Business, and Communications Platform as a Service.

Uniti’s Group Managing Director and CEO Michael Simmons stated that the company had progressed on to become a core infrastructure business. The company’s core infrastructure EBITDA run rate by December-end 2020 was recorded at AUD100 million with an operating cash flow exceeding 60% of the company’s earnings.

The Group is experiencing once-in-a-lifetime favourable set of market and economic conditions with fibre infrastructure investment. This can bring in long-term growth for the company led by steady demand and minimal operating expenditure.

The company’s earnings were dominated by the fibre wholesale and infrastructure business. This business brought in 200,000 premises in the order book, which are expected to go “live” within 5 years. This amounts for 75% of W&I’s contracted order book and is expected to double the business’s current active services.

The company’s Consumer and Business unit grew organically to deliver 80% of its new customers in December 2020. Similarly, the Communications Platform as a Service unit also drew organic growth in its main digital platform offerings.

 

 


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