M2 Group reports increased revenue of $546.2m

Company adds 61,000 net services during first half of 2015

M2 Group (ASX: MTU) has reported a revenue of $546.2 million for the six months lead up to the end of December, up 8 per cent on the same period in 2014.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was $86.1 million, up from 75.8 million last year.

Net profit after tax (NPAT) was $38.5 million, up 25 per cent from the $30.9 million recorded in 2014.

Turning to services in operation (SIO), there were 796,000 fixed voice SIOs, 223,000 mobile SIOs and 508,000 broadband SIOs. This equalled organic growth of 3.7 per cent.

M2 Group added 26,000 broadband services and 14,000 energy services during the first half of the year. It also rolled out 40 Dodo Connect kiosks in Queensland, New South Wales and Victoria meaning a total 60 kiosks as at February 2015.

During an investor presentation, M2 CEO Geoff Horth said the kiosk rollout has been a "very significant body of work" and it will take time for the kiosks to get up to speed.

“We are very focused on diversifying our channels to market. There have been two franchisees appointed to Dodo Connect kiosks," he said.

Ninety one per cent of new consumer customers bundled broadband with fixed line services while 86 per cent of new business customers also selected broadband with fixed line services.

The company also launched Dodo TV with Fetch, which has increased its bundled package opportunities.

It is now connected to 44 NBN Points of Interconnect (POIs). POIs allow NBN Co to hand over traffic from its network to the networks of wholesale and retail service providers.

Horth said the revenue rise was due to a dedicated program of internal improvement combined with organic growth.

“These results are a credit to our outstanding team who have worked diligently on delivering our strategy, the result of which is a business that is increasing share in its core markets and maximising shareholder returns on that growth via a relentless pursuit of operating efficiency,” he said in a statement.

M2 has been steadily increasing its broadband customer base since launching NBN plans and acquiring Dodo. M2 added 70,000 customers in the financial year 2014, with 31,000 in the first half and 39,000 in the second half.

Follow Hamish Barwick on Twitter: @HamishBarwick

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