Monthly Archives: September 2021

THE FOLLOWING MEDIA RELEASE WAS ISSUED ON BEHALF OF CARTONCLOUD IN JULY 2021.

The inaugural CartonCloud Logistics Index took the pulse of warehouse and transport businesses in the first quarter of 2021 with 50 respondents providing feedback on business operating conditions, workforce and hiring outlook, growth, opportunities and challenges.

CartonCloud founder Vincent Fletcher (pictured below) said the results of the index pointed towards a healthy industry emerging from the pandemic disruption with significant confidence for the future.

“Optimism is high in the current economic climate and businesses are looking to capture growth opportunities in the months ahead,” Mr Fletcher said.

“The confidence is translating into the creation of new jobs in the industry, particularly for operations involved in warehousing.

“The numbers speak for themselves: 90 per cent of the businesses surveyed believe they are likely or very likely to increase their staff numbers.

“Increasing the workforce isn’t just positive for our industry but increasing employment opportunities and creating new jobs will benefit families and communities across Australia.

“Job creation is a powerful indication that logistics businesses in Australia are growing and they are in secure financial positions to bring on new staff.”

Mr Fletcher said it was satisfying to see more than 80% of businesses expecting to perform well or very well over the next six months, which was a sign of a very strong industry.

“Businesses are looking to grow by further increasing demand for logistics services, expanding the range of services they offer and making additional investments in business-to-consumer or e-commerce capabilities,” he said.

“Another opportunity to drive growth is the adoption of more technology across both warehouse and transport operations to drive efficiencies and unlock capacity.

“While 55% of respondents believe their business is embracing technology adoption well or very well, there’s clearly room for improvement in many warehouse and transport operations.”

Despite surging optimism and hiring intentions, the industry wasn’t without its challenges.

“Some businesses are scrambling to meet the high demand and customer expectations,” Mr Fletcher said.

“Hiring and upskilling the workforce so businesses can meet demand and customer expectations is a key challenge for both warehouse and transport businesses.

“We found it interesting that a significant number of senior management and business owner participants cited their own lack of digital vision and support as a key inhibitor in their business’s adoption of technology.

“Workforce knowledge and skill was also identified as a key barrier in the use of technology.”

STATISTIC SNAPSHOT

What is your view of the current economic climate for your business?

A significant 68% of respondents believed the current economic climate for their business was either positive or very positive. This is in stark contrast to only 5% of respondents experiencing a poor economic outlook. The positive attitudes to economic conditions are a strong sign businesses are confident and are experiencing success in their operations. It’s important to note 27% of respondents reported a neutral view of their economic climate and future events may tip some of them into the poor or positive category.

How do you expect your business to perform in the next six months?

An overwhelming 83% of businesses expect to perform well or very well over the next six months. Less than 3% of participants expected their business to perform poorly, which is a sign of a very healthy industry outlook.

How would you rate the likelihood that your business will bring on additional staff within the next six months?

The positive economic and performance outlook is encouraging with 65% of participants indicating they believe their business is likely to bring on additional staff over the next six months. Likewise, 25% said they were very likely to increase their staff numbers.

Which of the following activities, if any, are you planning in the next 12 months in order to drive revenue growth?

More than 50% of participants believe their businesses will also tap into e-commerce/B2C fulfilment, and require an expansion in the range of services in the coming 12 months.

A smaller segment (15) saw automation and robotics as their primary revenue growth mechanisms for the coming months.

What will be the biggest challenges facing your business in the next 12 months?

Increasing operating costs were the main challenge faced by most (50%) businesses followed by driver and workforce shortages (43%). Inability to balance demand for services and capacity rounded out the top three.

60% of transport companies expect driver and workforce shortages to be the biggest challenge facing their business in the next 12 months.

ENDS

THIS IS AN EDITED EXTRACT OF THE FULL-YEAR RESULTS ANNOUNCEMENT FOR OVER THE WIRE HOLDINGS. FOR THE FULL RESULTS PLEASE VISIT THE ASX.

Telecommunications, cloud and IT solutions provider Over the Wire Holdings Limited (ASX: OTW) is pleased to announce it has delivered another year of strong growth in recurring revenues with the company beginning to experience the full benefit of recent investments across its integrated solution platform.

Key highlights from the year include:

• Becoming a Tier 1 voice provider following the completion of a multi-year Carrier Interconnect project
• Growing recurring revenue by 38% to $103.2 million and delivering strong positive operating cashflows
• A customer retention rate of 97.8%
• Completion of the Zintel, Fonebox and Digital Sense acquisitions
• Implementation of new Cloud availability zones in Perth and Adelaide
• Increased international capacity and partnerships
• Commencement of investment program to significantly upgrade the company’s core network (SuperCore)

Over the Wire Managing Director Michael Omeros said the achievements of the last financial year were important for the long-term future of Over the Wire and the growth of sustainable earnings.

“The completion of the carrier interconnect project and the completion of the Zintel, Fonebox and Digital Sense acquisitions provides us with a strong platform to lock in a variety of new, recurring revenue streams,” he said.

“We are already feeling the impact of these investments with second-half organic recurring revenue up 7% on the first half and a strong pipeline of new contracts and work.”

“The current financial year has started well and in line with expectations and we remain confident of delivering on our target of 15% growth in organic recurring revenue.”

Mr Omeros said the company’s Cloud. Connect. Collaborate. solution offering would continue to deliver positive outcomes for clients and help support future revenue growth.

“With the completion of the Carrier Interconnect project, we now have all the elements of a comprehensive, fully integrated platform that simplifies technology and empowers business,” he said.

Financial Results

Throughout the year, Over the Wire continued to focus on building its recurring revenue, with total recurring revenue growing 38% to $103.2 million. This component of revenue now represents 92% of overall revenue, up from 85% in FY20.

EBITDA for the year was $23.5 million (FY20: $17.4 million) with EBITDA margin improving from 20% in the previous year to 21%. The company also reported the continued strong conversion of EBITDA to cash with net cash from operating activities in the year of $24.5 million, up 111% from $11.6 million in the previous year. At the end of the year, the company has $16.7 million cash on hand.

The Board has declared a final dividend for 30 June 2021, of 2.25 cents per share fully franked, taking the full-year payout to 4.0 cents per share, up from 3.75 cents per share in the previous year.

Outlook

During FY21, OTW completed its transition to becoming a Tier 1 voice carrier. Completion of the platform means Over the Wire joins an exclusive group of Tier 1 carriers in Australia that can now offer full-service voice capabilities. Other Tier 1 carriers include Telstra, Optus, TPG, MyNetFone and Vocus.

Mr Omeros said completion of the project was a significant milestone in the history of the company and, combined with a range of other solution and platform improvements, had laid the foundation for a new phase of growth.

“As a Tier 1 voice carrier we will be far less reliant on third-party providers and unencumbered by legacy technology which will deliver instant savings and about $2 million in additional earnings each year,” he said.

Mr Omeros said the company had already begun to see the benefit of investments flow through with a range of new recurring revenue contracts signed.

Following on from the second-half organic recurring revenue being up 7% on the first half, the strong pipeline of new contracts and work creates confidence of delivering on the target of 15% growth in organic recurring revenue.

“We have the people, solutions and platform to deliver strong organic growth in the current year and are focussed on ensuring we deliver in line with our expectations.”

MEDIA CONTACT

Ben Ready
RGC Media & Mktng
+61 415 743 838
ben@rgcmm.com.au

About Over the Wire Holdings Limited

Over the Wire Holdings Limited (ASX: OTW) is an ASX listed telecommunications, cloud and IT solutions provider that has a national network with points of presence in all major Australian capital cities and Auckland, NZ. The company offers an integrated suite of products and services to business customers including Data Networks and Internet, Voice, Data Centre co-location, Cloud and Managed Services.

Over the Wire Holdings, Limited companies include Over the Wire, NetSIP, Faktortel, Sanity Technology, Telarus, VPN Solutions, Access Digital Networks, Comlinx, Zintel Communications, Fonebox and Digital Sense.

Australia’s leading online book retailer Booktopia Group Limited (ASX: BKG) has convincingly beaten its prospectus forecasts for the full year to June 30, 2021, with increased capacity, record numbers of customers and growing order values all combining to deliver a strong first year on the ASX.

Booktopia today (30 August, 2021) reported its first results since listing on the Australian Securities Exchange (ASX) in early December 2020 following a $43.1 million capital raising.

In the 12 months to June 30, 2021, the company reported total revenue of $223.9 million, a 35% increase on the previous year and 10% above the $204.5 million forecast in the company’s November 2020 prospectus. Since 2018 the company has achieved a CAGR in revenue of 26%.

Underlying EBITDA (adjusted for IPO costs) for the year was $13.6 million, up 125% on the previous year ($6.0 m) and 45% above prospectus forecasts of $9.4m.

The full-year result was achieved on a 27% increase in total units shipped to 8.2 million, an average annual spend per customer of $126.85 (FY20: $111.43) and an average order value of $71.07 (FY20: $65.08).

Booktopia Chief Executive Officer Tony Nash said the company’s first full-year result as a listed company was very pleasing and had laid the foundation for the next phase of growth.

“Our prospectus set some very ambitious targets for our first year as a listed company and I am very happy to report we have been able to eclipse those expectations,” he said. “Our focus has now shifted to executing our multi-pronged growth strategy that will see us ramp up our market penetration, expand our reach within the book industry and lock-in new, earnings accretive partnerships and acquisitions.”

“Our team’s performance over the last 12 months, the strength of the Booktopia brand and our ability to adapt quickly to a rapidly changing external environment leaves us confident we can continue to grow at or above what we have achieved over the last few years.”

Mr Nash said the company had started the new financial year strongly with the momentum from the previous year continuing into the current year.

“Sales for the current year are currently tracking above the same time last year, despite the ongoing lockdowns in Sydney and Melbourne,” he said.

Booktopia’s growth and success since it was first established in 2004 is built on the development and continued refinement of proprietary software and algorithms that optimise traffic and conversion rates.

The company has now built a database of over 5 million customers with 1.8 million active customers in FY21, a growth of 19% on the previous year.

As well as achieving strong market share growth during FY21, the company also identified and executed three new partnerships that would accelerate growth over the coming years. In FY21 the company finalised deals with Australian publisher Brio Books, edtech provider Zookal, and teamed up with UK publisher Welbeck for a new joint venture in Australia and New Zealand.

Mr Nash said the company was actively pursuing several new bolt-on opportunities to leverage the company’s infrastructure and systems and enhance growth.

“Bolt-on opportunities, whether through acquisition or partnership, provide a clear path to supercharging our growth over the next few years and if we see an opportunity that provides the right benefits, at the right price, we will pursue it.”

“While our immediate focus is on Australia and New Zealand, we will look at opportunities in other markets if we believe there is attractive, medium-term, growth potential.”

Booktopia is also investing in the growth of its publishing (Booktopia Publishing) and publisher services (Booktopia Publisher Services) operations that will give customers access to even more titles, more quickly. The publishing division uses BPS to distribute its books to retailers and resellers across Australia and New Zealand.

“The Australian book industry is forecast to generate more than $2.6 billion in sales this year and we want to be at the very core of that industry to ensure our customers are getting the best deals on the best books,” Mr Nash said.

Mr Nash said the company would continue to invest in expanding capacity to accommodate growth.

Booktopia has invested over $20 million in the automating of its 14,000 sqm Distribution Centre at Lidcombe in Sydney’s west resulting in a doubling of capacity that allows the company the ship 60,000 books across 145,000 different tiles per day.

As part of its planning for future growth, Booktopia has recently signed agreements to secure an additional 13,500 sqm of warehousing and distribution facilities at Enfield in Sydney’s South West to complement its existing facility at Lidcombe. The new facilities will provide increased capacity to hold and distribute stock to its customers.

“The investment in distribution centres together with our strong balance sheet means we are well-positioned to leverage our future growth profitably and sustainably,” he said.

OUTLOOK

FY22 has started strongly, with revenue tracking ahead of the previous corresponding period.

The company continues to experience strong tailwinds, including:

• the ongoing adoption of online shopping due to structural and demographic shifts
• acceleration of these trends due to COVID-19
• an increase in discretionary spending locally due to travel restrictions

The Board and management are cognisant of the ongoing impact of COVID-19, geographic lockdowns and the vaccine rollout, both in Australia and internationally and note that a high degree of uncertainty continues to surround the Australian economy.

“We will continue our growth strategy, investing into key areas of the business to cement our online market leadership and drive increased market share with an ongoing ‘customer obsession’ mindset to ensure our engagement and service is second to none,” Mr Nash said.

The company will also continue the expansion of its Publisher Services (Distribution) and Publishing businesses and its investment in distribution facilities as well as exploring international expansion opportunities through partnerships and acquisitions.

“Our intent is to be the core of the book industry, locally and internationally.” Mr Nash said.