Neotel sees half year revenue soar

Neotel has announced a 21% rise in year-on-year revenue for the half year period ended September 2013, while turning profitable before tax positive for the first time since its inception seven years ago.

The company reported a 21% increase in revenue compared to the same period last year, while ebitda (earnings before interest, tax, depreciation and amortisation) rose 105% year-on-year.

Steven Whiley, Neotel CFO, said of the PBT figure, “its a small number, but it is positive”.

Last month, Vodacom and the shareholders of Neotel announced that they had entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom SA.

Neotel did not comment on the exclusive discussions with Vodacom regarding a potential acquisition of the company, apart from reiterating that the finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite approvals.

Sunil Joshi, MD & CEO of Neotel did note that, “a combined entity would be better-placed to offer an expanded product range and level of increased funding and, as a consequence, enhanced customer choice as well, while enabling Neotel to extend its footprint in South Africa.”

“The plan was to turn ebitda positive in FY12 – team Neotel did this. Then we set a target of being ebit positive in FY13 – Neotel did this too. Now we have achieved our target of being PBT positive – ahead of plan,” the CEO said.

Neotel said it grew revenue across all its business units, including Managed Services (125%), Network Services (10%), NeoVoice (24%) and NeoInternet and NeoBroadband (20%).

This resulted in sustained customer services growth of 27% in the Small Enterprise/Retail segment and 24% in the Business segment.

Joshi pointed to individual customers of 175,000, with business clients at approximately 3,000.

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Neotel sees half year revenue soar