Junior telecommunications company Uecomm has lauded the "quality of business" recorded over the last two years as validating a takeover bid made by SingTel Optus last Friday.
Uecomm chairman Peter Shore made the comment at the company's annual general meeting, at which he also said the offer delivered a substantial premium to the company's recently traded share price. Chief executive officer Peter McGrath said he foresaw continued growth over the next year, predicting an operating revenue of between AU$70 million to AU$80 million, with pre-tax revenue of around AU$30 million and a capital expenditure of approximately $20 million.
Independent directors for Uecomm have "unanimously recommended" the offer to the company's shareholders.
"Our target is to be cash-flow positive in 2004 after capital expenditure," said McGrath. He said such a result "will be a significant achievement for an infrastructure-based telecommunications company such as ourselves. We have started the year well, reporting a free cash-flow positive result for the first three months of the year".
He reported the company's total revenue was up 42 percent from 2002, reaching AU$63.3 million in the last financial year.
Uecomm's core revenues increased by 58 percent to AU$58 million in this period, with a total grow of 331 percent or a net value of AU$22 million before tax and significant costs.
McGrath said the company's monthly revenues also show signs of growth.
"Coming into April this year, our monthly recurring revenue was AU$5.1 million. This is 50 percent higher than the same time last year," said McGrath. "The unaudited first quarter results announced last month show AU$15.5 million in revenue, up 29 percent over the corresponding quarter in 2003."
Shore said the company had emerged victoriously through a difficult time in the telecommunications market, attributing its strong financial performance to a "singular focus on our business strategy".
"This strategy is about building the core strength of the business by leveraging our existing network infrastructure and customer base for future growth, and by vigorously and diligently pursuing new business opportunities," said Shore.
Uecomm owns and operates a fibre-optic network in several of Australia's major eastern capital cities in addition to leasing access from other telecommunication carriers. According to the company, it delivers a "specialised fibre broadband" to corporations, government departments and other carriers and service providers nationally.
The company has gone through some major changes in the past year, with Alinta Limited taking over as its major shareholder from United Energy Limited and the resignation of several of its board members.
The company is now headed towards a takeover by SingTel subsidiary Optus, valued at a net consideration of AU$226.8 million.
Optus announced its intentions last Friday to buy all of the ordinary shares in Uecomm for 40 cents per share after signing an agreement with Alinta to acquire 20 percent of its Uecomm holdings. The companies also made an arrangement for the remaining 46 percent to be purchased at a later stage.