Transcription of Finance News Network Interview with Inabox Group Limited (ASX:IAB) Managing Director and CEO, Damian Kay
Carolyn Herbert:Hello I’m Carolyn Herbert from the Finance News Network and joining me from Inabox Group Limited (ASX:IAB) is Managing Director and CEO, Damian Kay. Damian, welcome back.
Damian Kay: Thank you very much.
Carolyn Herbert: You’ve just reported your results for the half-year ended 31 December 2015. What were the highlights?
Damian Kay: For me it was definitely the substantial increase in EBITDA. It increased over 2.5 times or 144 per cent, to over $2.5 million. This was on the back of an 80 per cent increase in revenue, to over $42 million. And also, our all three channels performed very strongly.
Carolyn Herbert: Now to the different businesses, how did they perform for the half starting with Indirect?
Damian Kay: Our Indirect channel, where we provide white-labelled services to retail service providers, typically servicing the smaller end of the business market, it performed really strongly. It grew by eight per cent to over $24 million; that was a really good result. What was really important though, was the increase in our IP services and cloud services, which is a real big focus for us.
And quite strangely, which was a little bit of a surprise, was actually bucking the industry trend where fixed wire is declining, we actually had quite a substantial increase in the number of services in operation, for fixed wire as well. So overall, we’re seeing a really good result for our Indirect channel, and it sort of starts to show our dominance in that area.
Carolyn Herbert: What about Enablement?
Damian Kay: Enablement, which is our business that provides aggregated billing, provisioning and network services to large mass-market retail customers, servicing consumers. That grew really strongly as well. For the half, we grew by 23,000 services or 167 per cent, to the previous comparable period, that’s an enormous increase. It really justifies our focus and investment in time, money and resources into this area. It’s a good business, it’s high margin and it really is growing strongly. And we expect it to continue growing strongly,actually into the second half and also further on, as our customers put on more and more services.
Carolyn Herbert: How did the Direct business perform?
Damian Kay: The Direct business, which is an IT business servicing that mid market business customer, it performed really strongly. That was really about a transformational business. We bought the business, under the previous owners, it had lost money substantially and we’ve turned that business around. We’ve restructured it; we’ve pulled the costs out the business and reinvested a lot of those cost savings, back into sales capability. And that’s really starting to pay dividends as well. And we expect that to continue and give us some good organic growth, into the future.
Carolyn Herbert: Can you comment on your segment of the Telco market, and how has the competitive landscape changed to say 12 months ago?
Damian Kay: It’s always an interesting space in telecommunications. We’ve just seen the merger of M2 Group Limited (ASX:MTU) and Vocus Communications Limited (ASX:VOC). That was a substantial merger in the industry, its really taken out or merged two big players in the market. So that’s really changing. We participated in that in a smaller way, we’ve taken out a few smaller competitors, being Cloud Exchange and Wireline. And we’ve integrated them into our business and migrated them in. So we’ve kind of participated in that way.
In terms of competition, we don’t really focus on the competition. We’ve set our business strategy up very well, we’re executing on that. And we’re really focused on that, rather than what our competitors are doing.
Carolyn Herbert: Finally Damian, what are your priorities for the second half of the year?
Damian Kay: For me, delivering on what we’ve already done, so doing more of what we’ve already done, in summary. 144 per cent increase in EBITDA shows that our strategy is working. For me and my executive team, and for the greater organisation really, it’s really about keeping that focus and delivering on what we said we would do. We’ve done that. We now go into the second half; we’re coming off a really good run rate. We said that we would do more than $5 million in EBITDA in our guidance; we’re delivering on that. So really just doing more of what we’ve already done.
Carolyn Herbert: Damian Kay, thanks very much for the update.
Damian Kay: Thank you very much.