Intense competition impacts Amaysim's 2019 full-year results

The budget mobile operator however, is optimistic that the foundations it's laying will help build long-term growth.

Australian mobile and energy operator Amaysim reported it has achieved financial results in-line with its FY19 guidance and has laid the foundation needed to build long-term growth.

"As we expected, our FY19 result reflects the intense competition in the mobile market and a challenging environment in energy. Against this backdrop, we met the top end of our guidance for FY19 and maintained our market share in mobile," Amaysim CEO and managing director Peter O'Connell told shareholders on Monday.

For the full year ended 30 June 2019, the company's statutory earnings before interest, tax, depreciation, and amortisation (EBDITA) was AU$44 million, while net revenue came in at AU$508 million, which was down 7.8% when compared to the same period last year.

Of the EBIDTA, mobile accounted for AU$15.2 million, down a significant 51%; while energy contributed to AU$32 million, up 33%.

Within its mobile business, the company announced, for the first time, it calculated its mobile revenue split between recurring revenue earned from its recurring subscriber base separate to its revenue earned from its As You Go (AYG) and other non-recurring sources.

"Revenue from recurring mobile subscribers accounts for the majority of mobile revenue (95%) and therefore splitting these customers from the subscriber base provides better clarity around the recurring nature of the mobile business and our renewed focus on being a subscription business and growing our recurring revenue," the company said.

"AYG customers are, by their nature, sporadic and unpredictable users and can remain in the customer base for over 12 months without using their mobile service or adding more credit (in accordance with the market practice on credit expiry terms)."

Recurring mobile subscriber base totalled 624,000, down 4.8% for the period to 30 June 2019, which the company pinpointed was due to a competitive trading environment and higher churn. Despite the decline, Amaysim reported it had maintained 34% share of the mobile virtual network operator market.

Although, the company noted that since it launched new plans as result of re-signing a new network supply agreement with Optus, over 8,000 recurring mobile subscribers were added in less than 7 weeks as of 16 August 2019, pushing the total recurring mobile subscribers to 632,000.

"The mobile market continued to be driven by lower prices and rising inclusions. We had anticipated these challenges, and as a result of successfully revitalising our network supply agreement with Optus, we have significantly improved the competitiveness of our mobile offers, launching new plans shortly after signing the new deal," O'Connell said.

Amaysim's energy business reported energy subscribers grew by 8.3% to 207,000, with further expectations there will be further growth underpinned by the company's subscription energy plans that was launched in Victoria.

"Our new energy subscription plans were offered in Victoria in April, as planned: this is the first of many steps towards disrupting the energy market, as we did with mobile ten years ago. The plans are simple and deliver customers an unprecedented level of transparency, predictability and flexibility, just like our mobile plans," O'Connell said.

Looking ahead, despite the challenges in mobile and energy, Amaysim said it's optimistic for the medium to long term outlook for the business, following the successful raising of AU$50.6 million in capital. It said it will use the funds to continue to re-invest in the business through increased automation and a new technology stack.

In turn, the company predicts underlying EBIDTA for FY20 will be in the range of AU$33 million to $39 million, marginally lower earnings compared to FY19. 

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