Huge Group interim profit up
Alt-X listed Huge Group on Wednesday (26 November) reported a rise in profits for the six months ended August 2014.
Headline earnings per share improved to 9.20 cents, from 6.07 cents previously, while operating profit advanced to R8.9 million, from R8.3 million before.
Total revenue however, declined to R99 million, from R106.7 million in 2013.
Huge Telecom is the group’s principal revenue generator. The group said that notwithstanding the declines in revenue, Huge Telecom’s revenue indicators, in the form of sales activity indicators, reflect positive growth trends.
“The compounding effect of annuity sales has started to come through in September and October 2014 with revenue for these two months exceeding the revenue for the comparable two months in the prior year by 10%,” it said.
In the six months from 1 March 2014 to 31 August 2014, Huge Telecom acquired in excess of 1,800 new clients and grew net connections by more than 5,300 lines.
“Huge Telecom has also been successful in increasing its fixed annuity to variable annuity ratio. The fixed annuity consists of channel management fees, on-account fees, site management fees and line rentals, which are largely protected from price compression,” it said.
The current monthly annuity book of fixed annuity charges is in the order of about R2.8 million as at 31 October 2014 (R1.6 million as at 28 February 2014), the group said.
In the six months from 1 March 2014 to 31 August 2014, operating expenses decreased by 16.1% from R39.4 million to R33.1 million as compared to the previous comparable six months.
Huge Telecom has continued to contain costs and this remains a key focus area, the group said.
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