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M2 posts AU$1.02b revenue with organic growth

M2 has seen a record AU$1.02 billion in revenue on the back of Eftel and Dodo acquisitions, and through significant organic growth of its customer base.
Written by Josh Taylor, Contributor

Australian telecommunications and energy provider M2 has posted a 50 percent increase in revenue for the last financial year to AU$1.02 billion, and a net profit after tax of AU$67.1 million, up 53 percent.

M2 CEO Geoff Horth told ZDNet that the growth for the company came in a year where M2 uncharacteristically didn't make any acquisitions.

"To have posted that sort of organic growth is pleasing. We have not done any acquisitions this year," he said.

The company that acquired Dodo and Eftel for AU$204 million in the 2013 financial year saw an 8 percent organic growth in its customer base, with 121,000 new post-paid services, including 70,000 broadband customers and 37,000 energy customers.

As flagged in July, Horth said that much of the growth came from the company's consumer base, with iPrimus and Dodo performing particularly well with their bundled broadband and fixed phone products.

The company still struggled in mobile, where 29,000 subscriptions were lost for the financial year as M2 prepared its 4G offering.

The business sector of M2 also struggled in the first half, but Horth said that it began to turn around in the second half of the year.

"We declined in the business segment in the first half, and managed to turn that around in the second half," he said.

"The business segment has been the part of our business that has suffered the most, and we've had to work the hardest to overcome churn."

Despite the year of growth without acquisitions, Horth could not rule out acquisitions in the future. He said that a reported buyout of Sydney energy provider Lumo is now off the cards, but that M2 is always on the lookout for acquisitions that would help grow the company.

"Fundamentally, we will look at any assets where we think they will be complementary to our business," he said.

"Any acquisitions we do will truly be cream on the cake rather than the underlying story."

Horth said he isn't concerned that future acquisitions might draw the attention of the Australian competition watchdog.

"There will be opportunities in the energy sector, there's no doubt about that. The risk of us getting the attention of the ACCC is pretty low, in any sector," he said.

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