Inabox enablement strategy bears fruit


Transcription of Finance News Network Interview with Inabox Group Limited (ASX:IAB) CEO, Damian Kay

Dallas Baird: Joining us on FNN today is wholesale telecommunications provider Inabox (ASX:IAB) CEO, Damian Kay. Damian thanks for joining us.

Damian Kay: You’re welcome.

Dallas Baird: Let’s start with your one-year vision for Inabox Group, Damian. How do you see 2014 going?

Damian Kay: You know 2014 is being very much a transition year for us. Heavy investment in our enablement capability, which is bringing large retail brands to the Telco market, by allowing them to provide telecommunications to their customers. That has been a really big investment and a focus for us. In fact one of our opportunities has actually moved from the build phase and into the operational phase. This has been quite an exciting, you know, transition for us. But what it means for us in the future is that earnings - it’s very high margin and high value for us, and so those earnings will start to flow into the second half of FY14 and into the FY15 year.

Dallas Baird: So this has been a real transition point for the Company. What makes you so bullish about this new enablement strategy?

Damian Kay: You know it’s a very high value, high margin proposition for the Company and it also plays to our strengths. We already do it, but it’s expanding that capability to allow these large retail brands to bring Telco to their customers. And I think that’s a really important focus for us because if we already do it, it’s quite easy to expand on what we already do.

Dallas Baird: It’s certainly an interesting space to be in. Do you have any direct competitors?

Damian Kay: Well actually no funnily enough, very few. We don’t have that many competitors, one - in that space but also that have the scale, the capability and the expertise that we do. And that’s really important. It’s one of the key reasons why we’ve really focused on this area and invested heavily, which has actually affected our results as well, because we really don’t have that many competitors in the space.

Dallas Baird: You mentioned at listing that you’d purchased iVOX. How’s that been going?

Damian Kay: You know what – really, really well. They’ve really contributed positively to our results. I guess from an operational and staff perspective, that’s been integrated really well. And thirdly I think, you know from a strategic point of view, it’s really expanded our capabilities in the voice space, or the voice-over internet protocol space and given us the capabilities that we might not have had before.

Dallas Baird: Are there any more acquisitions planned?

Damian Kay: Yes actually, especially in the cloud space. You know we’ve always been very consistent about having a balanced organic and acquisitive growth strategy. The cloud space is obviously a very fast growing part of the market. And what we find in Australia is that part of the market is very fragmented and so what we’re doing is focusing on possibly, consolidating that area. And that’s where our focus is at the moment, around M&A.

Dallas Baird: There’ll be many people out there watching, who could be potential investors in Inabox Group. In a nutshell, why should they consider investing in Inabox?

Damian Kay: You know the core business has performed really strongly. You know revenues from our core business were up 16.2 per cent, which really sets us up well for the future. You know, we’ve really got that part of the business right. Put that together with the investment that we’ve made in our enablement capability and the fact that we’ve actually bought one of those ones through the build phase, and into the launch phase. And you know, with the large national marketing campaign that will deliver earnings into 2014/2015, I think it’s a really exciting time for one - the Company, but also for shareholders that are kind of, giving us loyalty and showing us loyalty. And I think it’s a very good opportunity for all of us.

Dallas Baird: As an Inabox shareholder, what do these results mean for me as a current or future investor?

Damian Kay: The results mean that we’re kind of delivering on our strategy, which means that earnings as I said before will flow through into the second half of FY14 and into FY15, as more of these large enablement opportunities come online.

Dallas Baird: Damian Kay thanks for joining us on FNN.

Damian Kay: Pleasure.