Hostech FY10 revenue grows 310 percent

ASX-listed Hostech Limited has acquired IT services provider D2K Townsville for $90,000 plus the issue of more than a million shares.

Under the agreement, Hostech gains access to D2K's customers, name and branding in the North Queensland town.

The acquisition is Hostech's third in Townsville in as many years and seventh nationally this year.

Executive chairman Peter Kazacos told CRN that his plan was to grow Anittel - Hostech's national IT services arm for small businesses - into the country's regional managed services provider.

Hostech had 230 staff in 15 locations and Townsville was a strategic focus for the company, he said.

"North Queensland is strong but you need scale to deliver services there. [D2K Townsville] is an outpost that was better serviced by us," he said.

Kazacos said further acquisitions were imminent.

D2K principle Matthew Drane will help integrate customers to Anittel for "several months."

Drane said the deal was a "great thing for D2K".

"We're planning for growth and the easiest way to do that is to have people [using] our brand," Drane said.

D2K's operations in other Queensland locations would continue to operate under the D2K brand, he said.

D2K's vendor partners included HP, Acer, Toshiba, VMware and IBM.

Yearly results

Meanwhile, Hostech's 2010 financial results saw revenue grow by 310 percent from the previous corresponding period to $21.8 million.

The group increased revenues from $2.4 million for the six months ended 31 December to $19.4 million for the six months ended 30 June.

Between January and April Hostech acquired 5 Star Telecommunications, Officelink Plus, Anittel Pty Limited, Accord technologies (WA), Axxis Technologies and Aspirence.

The acquisitions translated to a net loss of earnings before interest, tax, depreciation and amoritisation (EBITDA) of $1.7 million - a $700,000 loss for the six months ended 30 June 2010 and $1 million loss for the prior six months.

An EBITDA profit in the range of $7 million to $9 million was forecast for FY2011, with revenues of $70 million to $90 million.