Australian telecommunications company, Swoop, has announced significant growth in the first quarter of the financial year 2025, alongside reaffirming its acquisition bid for Vonex Limited.
Swoop reported a 15% rise in recurring revenues within its core business and a substantial 74% increase in monthly recurring revenue sales for the quarter, compared to the first quarter of fiscal year 2024. The company highlighted these milestones as indicators of its promising start to the fiscal year.
Since its public listing in May 2021, Swoop has completed nine acquisitions in its expansion efforts across Australia. Notably, the acquisition of Moose Mobile in November 2022 for AUD $24 million initially added over 94,000 users to its portfolio; this number has since grown to more than 130,000. Tomas Diaz, previously the General Manager of Strategy and Performance at Vonex, now heads Moose under Swoop's management.
Swoop also confirmed its acquisition bid for Vonex Limited, where Swoop already holds a 19.9% stake. The merger is expected to create a combined entity with revenues of AUD $137 million, with anticipated annualised EBITDA synergies of AUD $5 million. This move is expected to bolster the company's growth prospects and improve returns for shareholders.
The financial stability of Swoop was further strengthened by the divestment of its VoiceHub business for USD $9 million during the first quarter.
Significant initiatives contributing to Swoop's growth in Q1 FY25 include securing a USD $36 million long-term contract with a global technology company. This contract will support the construction of a 300-kilometre fibre network aimed at servicing 42,000 businesses and approximately 450,000 residential premises in Melbourne.
Additionally, Swoop has expanded into new markets through the acquisition of a Fibre-to-the-Premises asset in regional Western Australia. This area presents significant growth potential, with expectations for the construction of up to 1.2 million premises over the next five years.
On the operational side, Swoop experienced organic SIO growth of 13% compared to the end of Q1 FY24, excluding the operations of the divested VoiceHub.
Employee satisfaction at Swoop also saw an improvement, with an industry-leading engagement score of 81% in September 2024, up from 68% the previous year.
Chief Executive Officer of Swoop, Alex West, expressed optimism about the company's recent achievements, stating, "These amazing, organic growth results in Q1 FY25 demonstrate our ability at Swoop to execute on our strong strategic vision in challenging economic times. This is a testament not just to the Board and Executive, which remain one of Australia's most experienced telco teams, but to all the Swoop team who deliver outcomes that delight our customers every day."
West further highlighted the company's competitive positioning and strategic developments. "We have remained a competitive reseller while also advancing our infrastructure development, which will drive long-term gross margin and profitability. The sustained increase in core business revenue this quarter, fuelled entirely by organic growth, highlights the demand for dependable internet and mobile services, reflected in our high employee and customer satisfaction ratings," he added.
On future prospects, West commented, "Following the success of FY24, we have continued expanding into residential fibre infrastructure alongside our fixed wireless products, offering high-margin services to our customers. Our $36 million long-term contract to provide Swoop-owned fibre infrastructure to a Nasdaq-listed global tech company marks a major milestone in expanding our reach in Melbourne and other key digital infrastructure regions."
The potential acquisition of Vonex Limited is seen as a further step in Swoop's strategic growth. West remarked, "Looking to Q2, I'm particularly excited about the potential future acquisition of Vonex Limited. I am confident that our extensive experience in recognising suitable acquisition opportunities and subsequently integrating complex businesses will see Swoop achieve annualised EBITDA synergies conservatively estimated at $5 million, driving growth and strong results for both shareholder groups."
He concluded by reinforcing Swoop's commitment to building on current successes, stating, "Alongside the Board, the Executive, and the entire Swoop team, we are eager to build on this success throughout FY25 and beyond."
