Aussie tech winners and losers in FY2018

The 2018 financial year saw many well-performing Australian tech companies, with revenue growth being a common theme for most.

Telcos, however, are having a tough year as competition and the ongoing NBN rollout has put pressure on average revenue per user.

Click and swipe through for a recap of FY2018 with an overview of the full-year performance of selected Australian tech companies. 

We have chosen to focus mostly on ASX-listed entities, with the exception of including major public-facing companies Optus and NBN Co. 

Empired

• Revenue: $174 million, up 4 percent

Empired saw steady revenue and earnings growth on the back of strong contracted work, the company reported.

Group revenue for the 2018 financial year was up 4 percent to $174 million despite a slowdown in its New Zealand business. Australian revenue came in at $117 million, up 12 percent year-over-year, while New Zealand revenue was down 11 percent to $57 million.

Underlying EBITDA was up 10 percent at $17 million while operating cash flow was up 58 percent to $15.5 million. Net debt was also reduced to $9.3 million, down from $13.8 million in 2017.

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Kogan

• Revenue: $412.3 million, up 42 percent

Kogan almost quadrupled its profits in the last financial year thanks to growth across all of its product divisions, customer base and the addition of new verticals.

The company brought in $14.1 million in net profit after tax in the 12 months ending 30 June, compared to last year’s $3.7 million, while revenue was up 42 percent to $412.3 million from last year’s $289.5 million.

The active customer base grew 45 percent to 1.39 million, compared to just under 1 million in 2017.

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Cirrus Networks

• Revenue: $76 million, up 41 percent

Cirrus Networks added $22.2 million to its revenue in the past 12 months thanks to a steady streamline of multi-million-dollar contract wins and a successful acquisition integration.

Quarterly revenue was up to $24.6 million, which would pump full-year revenue up by 41 percent to reach $76 million.

The company said its services revenue climbed 130 percent year-on-year in 2018 to $19 million, which now makes up 35 percent of its total gross margin.

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Rhipe

• Revenue: $196.6 million, up 25 percent

Rhipe achieved 25 percent year-on-year revenue growth to hit $196.6 million for the year ending 30 June 2018.

The company noted this latest growth spurt was up from its 14.5 percent climb in the previous financial year, having benefited from growth in both its licensing and solutions businesses.

Rhipe reported a 70 percent boost in licensing revenue, and growth in its public cloud business under the Microsoft CSP program. The distie now has more than 260,000 Microsoft CSP seats, representing a doubling over the course of the financial year, with revenue CSP revenue said to be in excess of $42 million, compared to $22 million in the previous year.

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Vodafone Australia

• Revenue: $1.77 billion, up 4 percent
• Net loss: $92.3 million

Vodafone Australia chief executive Iñaki Berroeta was positive about the company's outlook, internet offering and 5G future after revealing a significant boost in revenue and subscribers.

Despite the company posting a $92.3 million loss in the six months to 30 June 2018, compared to a loss of $81.5 million in the previous year, Berroeta said he was focused on the long game.

Company revenue grew 7 percent to $1.77 billion for the period, up from $1.65 billion last year. The telco's customer base is also up 5.2 percent, or 294,000, now sitting at 5.98 million.

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Optus Business

• Revenue: $386 million, up 6.6 percent

Earnings from Optus' enterprise business dipped by $6 million despite gains in ICT and managed services along with a bump to the enterprise mobile division.

Optus Business raked in $386 million in revenue in the first quarter of FY18 ending 30 June, an increase of $24 million, or 6.6 percent. EBITDA was down 8.9 percent to $59 million, representing a 15.4 percent earnings margin

ICT and managed services is the largest segment of Optus Business, growing 17.6 percent to reach $173 million in revenue thanks to strong cybersecurity, cloud and unified communications sales.

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Vita Group

• Revenue: $684.5 million, up 3 percent
• Net profit: $22 million, down 44 percent

Vita Group to feel the sting of Telstra's remuneration cuts with net profit dropping 44 percent and EBITDA falling 37 percent.

Its revenue was up three percent to $684.5 million in the 2018 financial year ending 30 June. However, net profit fell from $39.4 million last year to $22 million, while EBITDA was down from $55.4 million to $30.9 million.

The company, which is Telstra's only master license partner, again placed the soft results on Telstra's decision to cut remuneration for partners, as well as adverse product mix movements in its ICT channel.

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NBN Co

• Revenue: $1.98 billion, up 98 percent

NBN Co beat its own estimates as it inched closer to $2 billion for the year, off the back of increased activations and average revenue per user.

The network provider raked in $1.98 billion for the 12 months to 30 June, up 98 percent from $1.01 billion in 2017. It also beat its own estimate of $1.9 billion as laid out in its 2018-2021 corporate plan. The company expects revenue to reach $5.4 billion in 2021.

Growth was driven by a 65 percent increase in activations to 4 million, compared to last year’s 2.4 million. Average revenue per user also increased to $44, compared to last year’s $43. The network is now 70 percent complete, with another 5 percent completed today.

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Telstra

• Revenue: $29 billion, up 3 percent
• Net profit: $3.5 billion, down 8.9 percent

Telstra managed to add another $837 million in revenue in what could be its most challenging year in its history as earnings and profits continued to slide.

Total revenue was up 3 percent to $29 billion for the 2018 financial year ending 30 June. However, earnings were down 5.2 percent to $10.1 billion, while net profit dropped 8.9 percent to $3.5 billion.

Once again, chief executive Andy Penn reiterated that the soft results were caused by further rollout of the NBN and lower average revenue per user (ARPU).

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JB Hi-Fi

• Revenue: $6.9 billion, up 22 percent

JB Hi-Fi added another $1 billion to its annual revenue in the 2018 financial year as hardware sales offset a decline in software sales and lower-than-expected home appliance sales.

The company posted $6.9 billion in revenue for the period ending 30 June 2018, up 22 percent from last year’s $5.6 billion. Net profit was also up 14 percent to $350 million, compared to $306.4 million in 2017.

Online hardware sales, which includes JB Hi-Fi’s communications, computers, audio, video game hardware and drones categories, grew 32 percent to $209 million, and accounts for 4.6 percent of total sales. Total hardware sales came in at $4.54 billion for the period, up 9.4 percent from 2017.

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DWS

• Revenue: $126.1 million, down 8.3 percent

The company's revenue continued to slide by another $11.3 million after dropping the daily chargeable rate for one of its major clients.

The Melbourne-based IT outsourcing firm reported revenue of $126.1 million for the 2018 financial year ending 30 June, a drop of 8.3 percent. Underlying EBITDA also took a hit, dropping 15.3 percent to $22.9 million, while net profit was also down 8.5 percent to $15.9 million.

The company said that a number of factors were to blame for the middling results, including the decline in daily chargeable rate for a major client, which was partially offset by a jump in the number of consulting staff in its rank.

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Amaysim

• Revenue: $577.6 million, up 77 percent

Amaysim posted strong revenue growth on the back of its energy business, softening the blow of its underperforming mobile business.

Revenue grew 77 percent to $577.6 million in the financial year ended 30 June, up from last year’s $326.6 million, but profit was down 76 percent to $2.7 million from $11.5 million in 2017.

Amaysim also announced it will also discontinue the sale of devices in the first half of its 2019 financial year in an effort to simplify its operational structure.

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Hills Limited

• Revenue: $271.8 million, down 8.8 percent
• Net profit: $400,000

Hills Limited has returned to profit following a period of restructuring and business changes.

The company reported net profit after tax of $400,000 for the year ending 30 June 2018, which it referred to as a significant turnaround from the prior year’s loss of $7.9 million.

Hills’ revenue was down $26 million to $271.8 million from last year’s $298 million. This, the company said was “primarily due to the decision to exit NBN satellite installations and lower antenna sales due to the competitive pay TV market” in Australia and New Zealand.

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MYOB

• Revenue: $218.5 million, up 7 percent

MYOB's online subscriber base has shot up to nearly half a million thanks to its growing SME and enterprise segments.

The Australian accounting software vendor's online subscriber count grew by 61 percent to reach 492,000 for the six months ended 30 June 2018. The company said it was on track to reach its goal of 1 million subscribers by 2020.

MYOB also reported its results for the first half of the 2018 financial year, with revenue up 7 percent to $218.5 million. Underlying EBITDA was up 3 percent to $92.7 million, while net profit was down 10 percent to $25.3 million.

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Arq Group

• Half-year revenue: $112.4 million, up 23.5 percent
• Half-year net loss: $2.59 million

The company formerly known as Melbourne IT reported a loss in the first half of the 2018 financial year despite strong revenue growth, after posting lower-than-expected results from its SMB business.

Arq Group posted revenue of $112.4 million in the half-year ended 30 June, up 23.5 percent from $91 million in the same period last year. It posted a $2.59 million after-tax loss and a $2.68 million net loss "attributable to members of the parent".

The loss was attributed to higher depreciation and amortisation costs, which were reported as $8.5 million, compared to last year’s $3.6 million, which included corporate costs and the cost of rebranding to Arq Group.

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Over The Wire

• Revenue: $53.5 million, up 57 percent

Over The Wire's acquisition of VPN Solutions last year helped bring in more than $50 million in revenue for the 2018 financial year.

Over The Wire posted $53.5 million in revenue for the year ended 30 June, up 57 percent from $34.22 million last year. Profit grew 54 percent to reach $5.53 million, compared to 2017’s $3.6 million.

The company’s share price was also increaed to its highest point at $3.90 at the time of writing, up from yesterday’s $3.52. Its highest price prior to today was $3.72 as of 13 June.

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Vocus

• Revenue: $1.9 billion, up 4 percent

Vocus could be close to rightsizing its financial performance under a new leadership team after a rough past few years.

The company reported steady revenues of $1.9 billion, up four percent for the 2018 financial year ending 30 June. Statutory EBITDA outpaced revenue growth, up seven percent to $360.4 million for the year.

However underlying net profit was down 16 percent to $127.1 million, which Vocus pinned on increased depreciation and amortisation as the impact of increased capex flows through.

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Data#3

• Revenue: $1.18 billion, up 7.6 percent
• Net profit: $14 million, down 8.4 percent

Data#3 blamed one-off events negatively impacting its services businesses for a “disappointing” full-year profit, as the company reports an 8.4 percent profit decrease year on year.

In the company’s financial results for the year ending 30 June 2018, Data#3 reported revenue of $1.18 billion, up from its 2017 results of $1.09 billion.

Despite this, the company announced that is earnings and its dividend had been impacted by mixed profit results, reporting growth in the core Data#3 business being offset by lower-than-expected earnings from its Business Aspect and Discovery Technology acquisitions.

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CSG

• Revenue: $225.7 million, down 8 percent
• Net loss: $150.1 million

CSG more than tripled its losses after making the decision to exit its enterprise business earlier this year forced the company to write down its assets by $116 million.

The company racked up a statutory net loss after tax of $150.1 million for the 2018 financial year ending 30 June, compared to a $43.7 million loss in 2017.

EBITDA also took a massive hit, dropping from a $32.6 million loss last year to a $151 million loss in 2018, while revenue dipped eight percent to $225.7 million.

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Superloop

• Revenue: $125.2 million, up 109 percent

Superloop doubled its revenue for the 2018 financial year due to strong growth across its enterprise, cloud and managed services and broadband business.

The network provider posted $125.2 million in revenue in the year ending 30 June, up 109 percent from last year’s $59.8 million, and posted a $7.1 million profit after tax. In comparison, Superloop posted a $1.2 million loss in 2017.

The revenue growth was thanks to contributions from its wholesale and enterprise businesses in Australia, Singapore and Hong Kong, the development of INDIGO subsea cable facilities, cloud and managed services business Superloop+ and broadband services business Superbb.

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The Citadel Group

• Revenue: $108.5 million, up 9.8 percent

Citadel cracked the $100 million revenue milestone thanks to a record number of contract wins across its key verticals.

The MSP generated $108.5 million in revenue for 2018 financial year ending 30 June, up 9.8 percent. EBITDA was also up 13 percent thanks to a focus on scalable solutions that don't require significant incremental resources, while net profit was up 26 percent to $19.4 million.

Chief executive Darren Stanley praised the progress of the company's Citadel Information Exchange, a cloud-based software solution for enterprise information management, after signing up 10 new clients to long-term contracts in the past 12 months and generating more than $68 million in new opportunities.

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PS&C

• Revenue: $78 million, up 6 percent
• Net loss: $9.2 million

PS&C took on more losses despite a boost in revenue as the costs of recent acquisitions continue to affect profitability.

The company’s losses after tax came in at $9.2 million for the year ending 30 June, up 64 percent from a $5.6 million loss last year. Revenue grew 6 percent to $78 million from $73.9 million in 2017.

During the period, PS&C acquired IT services provider Canberra-based NTH Consulting, Melbourne-based business and technology consultancy Seisma, Sacon Group and Coroma Consulting.

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Dicker Data

• Revenue: $717.5 million, up 13 percent

Dicker Data experienced growth in both revenue and profits in the first half of its financial year.

The distributor posted revenue of $717.5 million in the six months to 30 June, up 13.5 percent from $632.4 million recorded in the same period last year. Net profit after tax was reported as $15.8 million, up 22 percent from $13 million.

Dicker said new vendors that came on board in the last 12 months contributed to the $35.8 million increase for the period, while existing vendors also saw 8 percent revenue growth.

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