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October 2011

October 2011. Financial Overview.

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October 2011

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  1. October 2011

  2. Financial Overview • ¹ FY 2010 result included Hello Mobile losses of $2.0m, impairment of goodwill in New Zealand operations of $89k and write off of previously recognized deferred tax asset of $215k. In the absence of the Hello Mobile investment, EBITDA and NPAT would have been $5.1m (down 5.0% compared to the PCP) and $2.5 million (down 24.7% compared to the PCP) respectively • ² A prior period adjustment was identified in the current year in relation to the recognition of expiry revenue and the payment of payroll tax. The effect of the adjustment was an understatement of revenue by $220k, an understatement of expenses by $179k which resulted in an overall understatement of profit for the FY 2010 by $41k. The adjustment also resulted in an understatement of retained profit for periods prior to FY 2010 by $17k. • ³ FY 2011 EBITDA included Hello Mobile losses of $5.4m. In the absence of the Hello Mobile investment, EBITDA and NPAT would have been $3.8 million (down 27.1% compared to the PCP) and $1.8 million (down 28.4% compared to the PCP) respectively.

  3. Revenue FY 2011 - Company revenue increased by 11.1% with the growth of mobile.

  4. EBITDA In FY 2011- A significant part of the negative result was a non-cash accounting adjustment as we changed the basis for calculating commission costs from a three year average to a three month period, to ensure a more accurate estimate of the effective rate of commission in a rapidly shifting market. This resulted in a one-off non-cash expense of $2.3 million, reducing deferred commission costs on the balance sheet. *Excluding $2.3 million non-cash accounting adjustment

  5. Dividend • On 28 February 2011, a fully franked interim dividend of 0.4 cents was declared and paid on 28 March 2011. • No final dividend was declared and payable for the year ended 30 June 2011.

  6. Total Terminated Minutes through calling card and mobile (million) FY2011-1.18 billion minutes (Calling Card 1071 million and Mobile 109 million)

  7. Hello Mobile • Hello Mobile achieved a growth of 450% from revenues of $2.1 million to $9.5 million. Currently we have more than 75,000 Hello Mobile subscribers, with a substantial number of those actively making calls and recharging each month, and this figure looks to grow over the next year. • The entrance of foreign competitors in the pre-paid international mobile space saw Hello Mobile operate at a loss due to fierce pressure in pricing. However, we believe the intense discounting taking place is not sustainable and the market fundamentals will be realised over time.

  8. Mobile Real Time Monitoring (MRTM) Platform • The development and utilization of the MRTM platform saw innovative services being brought about each month as the team seeks to further set apart the Hello Mobile brand from the rest of the market. • The MRTM platform also generated revenue from support services and development work that the Company performed for other wholesale customers.

  9. Calling Cards • The overall increase in revenue was offset by the decrease in calling card revenue. This was a direct result of the mobile rates competing head-on with calling card rates. • As the market fundamentals start to re-emerge over the coming year, we anticipate that the price difference between calling cards and mobiles will allow the calling cards to be differentiated.

  10. Sample Calling Cards

  11. Sample Hello Mobile SIM Packs/recharge cards

  12. Retail Advertising Photos

  13. Shop Decorations

  14. Focus • We will continue to focus on achieving long term organic growth through the ethnic markets as Australia continues to expand. We anticipate further growth in the pre-paid international mobile space as well as the restoration of the pre-paid calling card business. • Furthermore, we will continue to identify and capitalize on opportunities as well as maximize the strength of our 15,000 retailers and we will maintain our efforts to have a strong, professional customer service team. • Company will continue to explore M&A opportunities that add value to shareholders • Our goal is to return to profitability and to resume paying dividends to our shareholders as soon as possible.

  15. Directors • Greg McCann Chairman Greg.mccann@telpacific.com.au • Charles Huang C.E.O. Charles.huang@telpacific.com.au • Barry Chan C.O.O. Barry.chan@telpacific.com.au • Jeffrey Ma C.F.O. Jeffrey.ma@telpacific.com.au • Stephe Wilks Non Executive stephe.wilks@telpacific.com.au • Nick Geddes Company Secretary

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