SME focused communications and IT leader Hubify grew annualised recurring revenue by 63.5% in FY21 as it rapidly built its client base and offerings.

Hubify (ASX:HFY) dropped its annual results this morning – a compelling set of numbers which highlight the company’s vision for rapid growth through accretive acquisition and by organic means.

This includes annualised recurring revenue jumping to $13.9 million from $8.5 million the previous financial year, based on an exit run-rate basis – using the performance of an acquired business at the time it was picked up as an indicator of ongoing output.

Recurring revenue grew by 36.8% to $11.2 million from $8.2 million the previous financial year, and now comprises 60% of overall revenue. That contribution jumped from 50% in FY20.

Group revenue and gross profit came in 15.4% and 32% higher at $16.3 million and $9.2 million respectively.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 18.6% to $2.1 million, and net profit before tax (NPBT) grew 24.7% to $1.24 million from $1 million in FY20.

Hubify CEO Victor Tsaccounis said the company was pleased with its output over the course of a transformative year.

“While group revenue grew by 15.4%, we are particularly pleased by the 36.8% growth in our recurring revenue base over FY21, which now accounts for 60% of overall revenue,” he said.

“The strong revenue result was driven by continued organic growth in our high-margin, core business divisions, as well as contributions from accretive acquisitions made during the period.

“As a result, gross margins improved by 6 basis points to 76.7%, driving strong growth in gross profit, EBITDA and NPBT over FY21, notwithstanding the adverse impact of some COVID-related headwinds in some of our business units.”

Strategic priorities mapped 

Hubify embarked on a deliberate growth strategy in FY21, designed to build a service which would help it cover all bases for SMEs when it comes to communication and IT services.

That included a series of six strategic acquisitions and investments, with key anchors secured in cybersecurity and in the managed service provider realm.

Hubify also picked up like-for-like businesses to grow its customer base and geophysical presence.

In FY22, the company said it intended to build on its organic sales and recurring revenue growth by increasing brand awareness and cross-selling across its business divisions.

With $5 million cash in the bank and no debt, Hubify said it was also well placed to take advantage of opportunities to grow by acquisition should they present.

“While organic growth remains a key focus for the company, we also remain very committed to pursuing further accretive acquisitions in the near term and look forward to updating the market as our acquisition pipeline materialises further,” Tsaccounis said.

 

 

 

This article was developed in collaboration with Hubify, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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