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SPIRIT TECHNOLOGY SOLUTIONS LTD - Corporate Spotlight

ST1 is leading the disruption of IT&T industry. We’ve developed our own advanced fixed... ST1 is leading the disruption of IT&T industry. We’ve developed our own advanced fixed wireless network, which means we can provide Australian small to medium sized-businesses (SMBs) with Sky-Speed Internet, along with Managed IT Services and cloud-based business solutionsMore

Corporate Spotlight

ST1 is leading the disruption of IT&T industry. We’ve developed our own advanced fixed wireless network, which means we can provide Australian small to medium sized-businesses (SMBs) with Sky-Speed Internet, along with Managed IT Services and cloud-based business solutions
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ST1 discuss Intalock acquisition

ST1 SEALS THE DEAL ON NEXGEN BUY

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Spirit Technology Solutions (ASX:ST1) seals the deal on Nexgen buy

Telecommunication

ASX:ST1   
 
Spirit Technology (ASX:ST1) - Managing Director, Sol Lukatsky - The Market Herald
Managing Director, Sol Lukatsky

  • Spirit Technology Solutions (ST1) has finalised its acquisition of Australian telecom business Nexgen 
  • The new business is tipped to bring in $36 million in combined revenue for Spirit via the onboarding of 5000 new clients 
  • The buy will also bring in 100 new salespeople for the company, who are set to commence selling Nexgen and Spirit's products and technologies imminently 
  • Spirit first tabled the buy in late March, announcing a $23 million capital raise to partly fund the acquisition 

Spirit Technology Solutions (ST1) has finalised its acquisition of Australian telecom business Nexgen.


Onboarding the new business is set to bring in an additional 5000 new clients for Sprit as well as 100 new sales people in a bid to fuel organic growth. It's also tipped to bring in some $36 million in combined revenue, with 80 per cent of this classed as recurring. 


The new sales team is expected to join Spirit imminently to sell the existing Nexgen products and cross sell Spirit’s internet, cloud, voice, mobiles and cyber security.


Spirit first announced its plans to acquire Nexgen in late March. 


The telecom business sells a range of data, security and voice products including business internet plans, vendor-independent mobile plans and communication software. 


To fund the buy, Spirit undertook a $23 million placement and a Commonwealth Bank debt facility in with the remaining consideration comprising of approximately 72,161,000 company shares.


Spirit says Nexgen is tracking to a forecast FY21 earnings before interest, taxes, depreciation and amortization in the range of $7.2 million to $7.6 million. 



Read the full article on The Market Herald here.

ST1 TO RAISE $23M FOR NEXGEN ACQUISITION

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Spirit Technology Solutions (ASX:ST1) looks to raise $23M for Nexgen acquisition

Telecommunication

ASX:ST1   
Spirit Technology (ASX:ST1) - Managing Director, Sol Lukatsky - The Market Herald
Managing Director, Sol Lukatsky
Source: Spirit Technology

  • Spirit Technology Solutions (ST1) has tapped investors for $23.8 million to fund its acquisition of Australian telecom business Nexgen 
  • The buy is expected to double Spirit's business services and assets, and potentially generate $36 million in predominantly recurring revenue 
  • Split between cash and shares, the cash portion of the buy will be fuelled by the recent capital raise and an upgraded Commonwealth bank debt facility 
  • Completion of the acquisition is expected to occur around April 8, 2021
  • Spirit Technology Solutions is is up a healthy 8.57 per cent following the announcement, trading at 38 cents per share

Spirit Technology Solutions (ST1) has tapped investors for $23.8 million to fund its acquisition of Australian telecom business Nexgen.


The move is set to bring in over 5000 new business-to-business clients for Spirit and potentially generate $36 million in predominantly recurring revenue.


Consideration for the buy will be a blend of cash and shares, with 30 per cent of the consideration in Spirit shares and the remaining 70 per cent in cash from the capital raise and a Commonwealth Bank debt facility. 


Spirit has managed to fund the cash portion of the buy by offering up 72,161,000 shares at 33 cents apiece to sophisticated institutional investors via an unconditional share placement.


The remaining cash is expected to stem from Commonwealth Bank debt facility, which has been given the tick of approval to increase to $25 million. 


Spirit Managing Director Sol Lukatsky said the acquisition more than doubles the company's business services and assets.

"Additionally, this transaction gives us a much deeper presence nationally and in particular in Sydney and Brisbane," he explained. 


"Adding over 100 salespeople and 5500 news customers will immediately have a material impact on our organic growth via an increased sales pipeline," he concluded. 


Completion of the acquisition is expected to occur around April 8, 2021.


Spirit Technology Solutions is is up a healthy 8.57 per cent following the announcement, trading at 38 cents per share at 2:29 pm AEDT.


Read the full article on The Market Herald here.

ST1 CAPITAL RAISE & MATERIAL ACQUISITION

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Spirit Technology Solutions (ASX:ST1) poised for capital raise and material acquisition

The Market Herald Deal Room

ASX:ST1   
 
Spirit Technology (ASX:ST1) - Managing Director, Sol Lukatsky - The Market Herald
Managing Director, Sol Lukatsky
Source: Spirit Technology

  • Telecommunications company Spirit Technology Solutions (ST1) has placed its shares in a trading halt ahead of a material acquisition and capital raise 
  • Spirit is expected to resume trading on or before Wednesday, March 31, when a formal disclosure regarding the raise and acquisition are made to market 
  • While Spirit hasn't laid any explicit plans regarding the buy or how much it is looking to raise, but the company hinted at further acquisitions in its recent announcement to divest from its consumer infrastructure assets

Telecommunications company Spirit Technology Solutions (ST1) has placed its shares in a trading halt ahead of a material acquisition and capital raise. 


In the announcement, Spirit advised its shares would remain in a trading halt until the earlier of commencement of trading on Wednesday, March 31 or when a formal disclosure regarding the raise and acquisition is made to market. 


Spirit hasn't offered any clear details as to how much it hopes to make from the raise or its subsequent plans thereafter, or revealed any specifics regarding the acquisition. 


In most recent developments for Spirit, the company flagged plans to divest from infrastructure assets associated with its consumer business, affirming its consumer assets account for a small amount of its revenue compared to its business-to-business (B2B) assets.


According to the company, proceeds from the sale were set to go towards acquiring high-growth assets across cybersecurity, cloud and IT services — citing high demand within its B2B customer base. 


Prior to today's trading halt, Spirit Technology last changed hands at 35 cents per share.


Read the full article on The Market Herald here.

ST1 HALF YEARLY PROFIT AS REVENUE SOARS

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Spirit Technology Solutions (ASX:ST1) posts half-yearly profit as revenue soars

Technology

ASX:ST1    
Spirit Technology (ASX:ST1) - Managing Director, Sol Lukatsky - The Market Herald
Managing Director, Sol Lukatsky


  • Spirit Technology Solutions (ST1) has delivered a sturdy profit and record revenue over the six months to the end of December 2020
  • While Spirit initially made a name for itself as a telco and internet provider, the company changed its name in October 2020 to reflect its expanded services
  • With the company internet, cybersecurity, cloud services, managed IT, and more, Spirit was able to increase revenue to $44 million over the half-year — 253 higher than the same period the year before
  • This revenue boost underpinned a $508,000 net profit for the half-year compared to a $740,000 loss over the prior corresponding period
  • At the end of December, Spirit had $23.3 million in cash and debt, with the integration of some important acquisitions tracking along ahead of schedule
  • Shares in ST1 closed 1.4 per cent higher this afternoon at 39 cents per share



Spirit Technology Solutions (ST1) has delivered a sturdy profit and record revenue over the half-year wherein it rebranded to a fully-fledged IT and Telco business. 


While Spirit made a name for itself as a telco and internet provider, a string of acquisitions over 2019 and 2020 saw the company majorly expand its product and service offering and subsequently change its name to reflect the growing business.


With Spirit's services covering internet, internet security, cloud services, mobile, managed IT, and more, the company made $44 million in revenue and other income for the six months to the end of December 2020 — an increase of 253 per cent on the same half-year in 2019. 


This revenue boost underpinned a $508,000 profit for the half-year. For reference, Spirit posted a $740,000 loss over the same time period in 2019.


The company's earnings before interest, tax, depreciation and amortisation (EBITDA) was $3.4 million for the first half of the 2021 financial year, which is 320 per cent higher than the prior corresponding period. 


Spirit Managing Director Sol Lukatsky said the "excellent" half-yearly results validate the strength of the company's business strategy. 


"It is particularly pleasing to deliver a profitable H121 in a period of investment in scaling up the business, building a national brand and integrating multiple acquisitions," Sol said. 


"We've been able to adeptly respond to the changing needs of business, as their IT&T needs become increasingly complex by delivering a comprehensive bundled offering across cloud, voice, data, managed services and cybersecurity with a strong customer focus," he said. 


"We have further growth in our sights as we launch new products, continue to expand our reseller network and realise the benefits of the investment made over the past year and during 2021." 


Importantly, Spirit's recurring revenue for the half-year came in 99 per cent higher than the prior corresponding period. 

At the end of December, Spirit had $23.3 million in cash and available debt, with the integration of some important acquisitions tracking along ahead of schedule. 


Shares in ST1 closed 1.3 per cent higher this afternoon at 39 cents per share. The company has a $230.7 million market cap.


Read the full article on The Market Herald here.

ST1 TRIDENT ACHIEVES EARN-OUT TARGET

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Spirit Technology’s (ASX:ST1) Trident achieves earn-out target

Technology

ASX:ST1    
Spirit Technology (ASX:ST1) - Managing Director, Sol Lukatsky - The Market Herald

Managing Director, Sol Lukatsky

  • Spirit Technology's (ST1) Trident Technology Solutions has achieved the earn-out target for the period ending November 30, 2020
  • On February 14, Spirit revealed it had acquired Trident Business Group for $6.9 million
  • Of that figure, 30 per cent consisted of an earn-out structure based upon earnings before interest, tax, depreciation and amortisation over 2020 and FY21
  • This acquisition allowed Spirit to launch its new business unit, which will focus on delivering IT and internet solutions for schools, hospitals and aged care facilities



Spirit Technology's (ST1) Trident Technology Solutions has achieved the earn-out target for the period ending November 30, 2020. 


On February 14, Spirit revealed it had acquired Trident Business Group, which includes Trident Computer Services and Neptune Managed Services, for $6.9 million. 


Of that figure, 30 per cent consisted of an earn-out structure based upon earnings before interest, tax, depreciation and amortisation over 2020 and FY21. 


This acquisition allowed Spirit to launch its new business unit, Trident IT Solutions, which will focus on delivering IT and internet solutions for schools, hospitals and aged care facilities. 


Further, Trident CEO Katie Bentley was appointed CEO of Trident IT Solutions while Neptune CEO Geoff Bentley was appointed Spirit's Chief Sales Officer. 


"The performance of the Trident business since joining the Spirit group has clearly demonstrated Spirit's capability to integrate and grow commercial opportunities as demonstrated by the recent 1H 20 growth recently announced," Managing Director Sol Lukatsky said. 


"Spirit's comprehensive product range spanning voice, cloud, data, managed services and cybersecurity is now being integrated into one offering and is in high demand," he added.


Read the full article on The Market Herald here.

VIDEO

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Spirit Technology Solutions discuss Intalock Acquisition and the business moving forward - December 2020


Internet on the ASX: Nimble service outpacing established giants





Investor Updates with Sol Lukatsky, Managing Director - Spirit Telecom - August 2020



Investor Updates with Sol Lukatsky, Managing Director - Spirit Telecom - July 2020





Spirit Telecom Quarter Figures and Update - The Market Herald Live - July 2020





VPD investor presentation by CEO Sol Lukatsky





Investor Updates with Spirit Telecom, MD Sol Lukatsky - June 2020





Investor Updates with Spirit Telecom, MD Sol Lukatsky - May 2020




The Market Herald Live Bulletin - May 2020




ST1 NAME CHANGE, SOLID Q4 REVENUE GROWTH

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Spirit Telecom (ASX:ST1) to change name amid solid quarterly revenue growth

Technology

ASX:ST1   MCAP $199.5M

Spirit Telecom (ASX:ST1) - Managing Director, Sol Lukatsky - The Market Herald

Managing Director, Sol Lukatsky
Source: Spirit Telecom


  • Shares in Spirit Telecom (ST1) are surging today after the company's latest quarterly market update in which it highlighted some strong financial results
  • Over the September quarter, Spirit pulled in $15.6 million in revenue — up 149 per cent on the same time last year and 30 per cent on the June quarter
  • The revenue growth was underpinned by a string of acquisitions over the quarter
  • The company has been working to become a one-stop-shop for the IT and telco needs of the small-to-medium business sector
  • To reflect its business transformation, Spirit is changing its name to Spirit Technology Solutions, still under the ticker code ST1
  • ST1 shares are up just over five per cent this afternoon, currently trading for 39 cents each



Shares in Spirit Telecom (ST1) are surging today after the company's latest quarterly market update in which it highlighted some strong financial results. 


The company had a busy first quarter of the new financial year. Since July, Spirit has bought four companies, signed a memorandum of understanding (MoU) with fellow ASX-listed Opticomm (OPC) on the NSW government $100 million GIG state tender, and raised $23.2 million through a placement and share purchase plan. 


Revenue boost

The result of the hard work is a new quarter of record revenue for Spirit. Over the quarter, the company pulled in $15.6 million in revenue — a 149 increase on the same quarter last year and a 30 per cent increase on the June 2020 quarter. 

In line with this, recurring revenue for the September quarter came in at $9.2 million, which is 78 per cent up on the same time last year. Solutions and Projects (S&P) revenue was up 507 per cent year-on-year at $6.2 million for the quarter. 


On the back of all this, Spirit had a neat $30.1 million worth of cash and debt available at the end of September. 


Spirit's Managing Director, Sol Lukatsky, said this has all been part of the company's work to fill a gap in Australia’s A$143 billion telco and IT services industry, where the big players are falling short.


"It's about giving customers one point of contact, one monthly bill, access to all of the products they need to support their business in a digital world — and with great service," Sol said at the company's annual general meeting (AGM) today.


Supporting this focus on becoming a one-stop-shop for the telco and IT needs of the small-to-medium business world, Spirit's business-to-business (B2B) total contract value (TCV) for the quarter came in at $8.4 million — up 124 per cent year-on-year and 159 per cent quarter-on-quarter. 




Strategic acquisitions and future growth

A key driver of growth for Spirit has been a recent string of strategic buys, with 11 companies taken over since April 2019. 

Sol said the latest acquisitions — VPD Group, Reliance, Beachhead, and Altitude IT — have grown the company's geographic footprint and expanded its national network for reselling products through Spirit Solutions Partners. 


Looking ahead, he said the company has over 70 new resellers signed with new mobile products to be launched in coming quarters — solidifying some important growth initiatives for the second and third quarters of FY21. 


On top of this, Spirit said it has several acquisition targets under consideration and due diligence for some more upcoming buyouts. 


Of course, a major catalyst for the company's growth has been the Spirit X platform, which is the largest aggregator of B2B internet products in one online sales portal. 


"The platform provides a channel for sales generation and organic growth and we saw an impact on revenue as soon as we launched in December last year," Sol explained. 




New Spirit, new name 

Released in tandem with the company's market update is a new identity for the company. 


Spirit Telecom is set to change its name to Spirit Technology Solutions, still under the ticker code ST1. 


According to Sol, the name change is designed to reflect the company's expanded offering and the transformation of its business. 


Shareholders seem impressed with today's update and the name change. Shares in the company were up over 10 per cent in early action but have since pared back the win to 5.41 per cent. At 2:04 pm AEDT, ST1 shares are worth 39 cents each.



Read the full article on The Market Herald

STI DISRUPTING THE MARKET

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Spirit Telecom (ASX:ST1): Disrupting the market with its modern IT and Telco offering

Spirit Telecom (ASX:ST1): Disrupting the market with its modern IT and Telco offering
Source: Spirit Telecom


  • Tech disruptor Spirit Telecom (ST1) is changing the way businesses access internet, telco and IT services, leaving traditional telco giants in the dust
  • As established telco big-caps lose revenue and slash dividends, Spirit is flourishing under astute management and a cutting-edge strategy
  • The company is working hard to acquire the right businesses, solutions and partnerships to offer a one-stop-shop telco and IT approach
  • The company's most recent achievement has been the launch of a $23.2 million capital raise in August — a portion of which has been used to buy out three New South Wales IT companies
  • This is on top of the eight acquisitions made last financial year
  • Despite the upheaval of COVID-19, Spirit's revenue more-than-doubled over the past financial year
  • Most importantly, Spirit now has $31 million in balance sheet capital to deploy for acquisitions and growth

Tech disruptor Spirit Telecom (ST1) is changing the way businesses access internet, telco and IT services, leaving traditional telco giants in the dust.


The company has emerged as an agile contender in the telco world, taking on established giants like Telstra and TPG, which recently completed its Vodafone merger.


Spirit has flourished under astute management and a cutting-edge strategy, unshaken by the challenges presented by the onset of COVID-19.


Spirit’s success is in its strategic thinking

Managing Director Sol Lukatsky said first and foremost, it's about the company's ability to acquire the right businesses, solutions and partnerships to offer a one-stop-shop approach.


Spirit offers telco, internet, cloud and IT managed services, and cybersecurity all under the same roof. This means flexible contracts with bundles of products can be tailored to the needs of small to medium enterprises (SMEs) and provided under one monthly invoice.

Vitally, this growth is also supported with access to $31 million of capital on the balance sheet to deploy for acquisitions.

Sol has made no secret of his ambition to become "the Officeworks of IT and Telco in Australia". He said that’s about combining an extensive product range with old-fashioned service.


"We have built trust and made good decisions to provide what businesses need today," Sol said.


"Our numbers are a reflection of the ability to bundle the products together — products customers need," he said.

"A contact centre is not a way to sell complex products."


And, looking at Spirit's big-cap competitors, it would appear Sol may be right.


A David and Goliath story

For example, Telstra’s net profits dropped 14.4 per cent last year and total income slipped six per cent to $26.6 billion. Shares have trended gradually south for the past five years, from around $6 in 2015 to south of $3 a pop over the past two weeks.


Telstra is forking out a fully-franked final dividend of eight cents a share – 16 cents for the 2020 financial year. This is flat on the year before but still down on FY18's 22-cent full-year payout.


Similarly, TPG's half-yearly revenue for the first half of 2020 fell 11 per cent on the prior corresponding period, despite the recent major merger with Vodafone.


This financial year alone, TPG's share price has slipped 17.64 per cent from $8.90 to $7.33 per share. The company did not pay a half-yearly dividend.


Yet, as the giants scramble to hold onto traditional revenue streams, the smaller and smarter Spirit is aggressively chipping away with its fresh approach, taking chunks of business off the table as it targets hospitals, government agencies, education facilities, and more.

It would appear the market has begun to clearly see the apparition as shares soar up towards the 40 cent mark — nearly double where they sat at the start of 2020.


Most tellingly, Spirit is seen as the natural home for the retail investors and self-managed super funds (SMSFs) moving away from the big Telcos who do not offer growth and have lowered their dividend payouts.


With the falls in dividends taking big chunks out of retirement nest eggs, the safe havens of 20 years ago no longer seem so safe — especially as every household in Australia starts to re-calibrate its thinking during the COVID pandemic.


Spirit is quickly covering ground

Spirit has been making remarkable progress in its stoush with the legacy, big-market-cap players in its field.

The company's most recent achievement has been the launch of a $23.2 million capital raise in August.


Spirit managed to pocket $18.2 million through a share placement and raised an additional $5 million through a heavily oversubscribed share purchase plan.


For those following the Spirit story over the past year, the use of the funds is likely no surprise: Spirit has used a portion of the extra cash to buy out three New South Wales IT companies and has the capital behind it to fund additional acquisitions and organic growth initiatives, including the rollout of its national brand.


In its most transaction, Spirit has acquired Altitude IT and Beachhead Group, both based in Sydney, and Reliance Technology in Central NSW. Spirit said the buys will provide instant market expansion and a neat $12 million in combined revenue. Importantly, roughly 60 per cent of the new revenue will be recurring.


It’s yet another bold move by Spirit Telecom, which acquired eight complementary businesses last financial year and pushed deeper into Queensland and New South Wales with another significant addition — IT provider VPD Group — for $14 million on July 1. All these acquisitions have performed strongly.


Over the period, Spirit has also secured over 30 new trading partnerships as it builds out its wholesale distribution network, Spirit Solution Partners.


On top of all this, the company has developed the Spirit X sales platform, which acts as an aggregator of business-to-business (B2B) internet products.


The money where Spirit's mouth is

Despite the upheaval of COVID-19, Spirit's revenue more-than-doubled over the past financial year — increasing by 14 per cent to $11.9 million in the final quarter alone, compared to the quarter before. More than half of the secured revenue will be recurring.


Supporting the revenue growth was an 88 per cent increase in normalised full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) compared to the 2019 financial year.


Most importantly, Spirit now has $31 million in balance sheet capital to deploy for acquisitions and growth.


Read the full article on The Market Herald here: https://themarketherald.com.au/spirit-telecom-asxst1-disrupting-the-market-with-its-modern-it-and-telco-offering-2020-09-18/

Spirit Telecom: Internet on the ASX

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Internet on the ASX: Nimble service outpacing established giants

Sponsored



The switch to remote working in light of COVID-19 has put an emphasis on the need for cloud applications, high-speed and reliable internet, and IT services.


The repercussions of not being adequately prepared to support a remote workforce run much deeper than the frustrations of having a laggy or unstable connection.


Businesses need fast, secure Internet that can protect the privacy of their staff and their intellectual property, as well as their back-up mechanisms. Going into COVID-19, many businesses were underprepared.


This has turned all attention to the providers of these IT services. On the ASX, while some companies have struggled to survive the pandemic, internet and IT service providers have faced unique challenges in having to adapt to the huge acceleration in the digital economy.


Of course, the market for these stocks was huge before the pandemic hit; a May 2020 Grandview report valued the telecom services market at a whopping US$1.7 trillion (roughly A$2.36 trillion) in 2019 with a predicted compound annual growth rate (CAGR) of five per cent from 2020 to 2027.


"As people worldwide struggle with the realities of the COVID-19 pandemic, digital entertainment platforms, as well as the global telecom service providers, have benefitted from the current scenario due to their industry type and business model," the Grandview report said.


The struggle for these companies, the report said, is meeting the sudden increased demand for higher bandwidths and high-speed connectivity.


So, what does this look like for ASX-listed telco companies?


Internet on the ASX

Of the country's top listed telco stocks, Spirit Telecom performs the best in terms of internet speed.

While your standard Telstra NBN speed might see you downloading at between 30 and 50 megabits per second (Mbps) with a peak of 100Mbps, Spirit touts the ability to provide speeds of one gigabit per second (Gpbs). This is equal to 1000 Mbps.


Moreover, while the companies perform similar services, Spirit's business model is slightly different.


Spirit bundles IT services such as cloud applications, infrastructure, cybersecurity, and IT support with its high-speed links — making it a one-stop-shop for all tech needs, with just one bill and one account manager to speak with.


Why Spirit?

Of course, this begs the question: why has Spirit Telecom, with its $200 million market cap, been grouped with these multi-billion-dollar peers?


The company has seen impressive growth in the face of COVID-19. While the listed big-caps have staged moderate recoveries from the brutal mid-March market crash, Spirit has almost tripled in value since the slump. In fact, the company's share price has nearly doubled since the start of the year from before COVID-19 hit.


The growth has been driven by the company's range of services and its aggressive acquisition strategy — from April 2019 through to July 2020, the company made eight major acquisition. In August, Spirit raised $23.2 million for another three buys.


The string of purchases underpins Spirit’s next phase in its growth plan to expand its geographic reach and become a truly national brand, as well as significantly grow its network of wholesale partners.


While Spirit was built on the premise of offering the country’s fastest internet, it is the company’s transformation to a modern telco that can meet all of the product and service needs for Australian business with one service point and one monthly bill that has driven its meteoric growth.


Spirit’s small-to-medium business (SMB) client base includes many businesses in essential areas like education facilities, aged care, and hospitals, which has underpinned its resilience in recent months.


Long before COVID-19 hit, Spirit was setting itself up for major growth through a string of strategic company purchases. These acquisitions have enabled it to build out the comprehensive product and service suite spanning across managed IT support, cloud storage, and cybersecurity, alongside voice and high-speed internet.


Moreover, the company's Spirit X sales platform is the country's largest aggregator of business-to-business (B2B) internet products in one online sales portal and has proven to be an effective lead generator — now able to service over 80 per cent of Australian businesses.


This focus on B2B service has created a sticky customer base and a growing stream of recurring revenue for Spirit.

Spirit’s currently forecast revenue run rate is $80 million. The company’s revenue doubled over the 2020 financial year alone.  


Spirit Telecom makes the list of top ASX telco companies because it is young and nimble; it's ready to disrupt the looming giants of the telco industry and change the game.


Read the full article on The Market Herald 

SPIRIT TO AQUIRE VPD GROUP

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Spirit to acquire VPD Group – Expands further into NSW & QLD markets and creates new Wholesale Business for Cloud, Internet & Voice services

ASX Release 26th June 2020


  • VPD Group (comprising Now IT Solutions Pty Ltd, Live Call Pty Ltd and Voice Print and Data Australia Pty Ltd) generates combined FY20 revenues in excess of $15M.

  • The VPD Group acquisition is the largest and most transformational transaction completed by Spirit.

  • FY20 Revenue mix was split between private and public Cloud, Security, Voice and Data services.

  • The VPD acquisition represents a management forecast normalised EBITDA of $3.0M- $3.5M for FY20.

  • Price Paid for Tranche 1: gross purchase price is $14.0M on circa 4x multiple of EBITDA with a combination of cash & Spirit equity being $7.0M Cash and $5.8M Spirit shares (equity component adjusted after net debt adjustment on completion).

  • Spirit and the VPD Group have agreed to $1M in cash retention to allow for any adjustments in order to true up FY20 EBITDA (reconciled by end of August 2020).

  • Tranches 2 and 3 future payments payable where EBITDA performance exceeds performance targets for FY21 & FY22 with payment at 5x any over-achievement. Total maximum purchase price of up to $27.5M.


Spirit Telecom (ASX:ST1) has agreed to acquire VPD Group - its most transformational transaction to date. VPD Group is an established Voice, Data and Cloud Services provider across Queensland and NSW. 


This highly strategic move will see Spirit create a new wholesale business: Spirit Partners to focus on distributing its range of products via channel partners across Australia. More than 85% of VPD Group’s revenue is recurring, with a 98% retention rate across: Mining, Aged Care and Industrials. The acquisition assists with entry into high data usage for cross sell opportunities within NSW & QLD markets from the Spirit high speed data network and across Spirit X Digital sales platform.


Following the VPD Group acquisition Spirit will have a combined revenue run rate of: $70M-$75M (FY21) that delivers a strong integrated sales opportunity across Internet, Security, Cloud and IT services – now across every state in Australia.


The new Spirit wholesale business will focus on delivering cloud-based IT & Internet solutions for high growth verticals using the Spirit X sales platform. VPD Group’s clients are moving through a major generational technology change as they migrate to the cloud and require high speed Internet and specialised IT services which Spirit can now provide nationally.


On completion, Spirit will issue the completion shares at a deemed issue price of $0.20 (20 cents) per share, with the shares escrowed for 12 months from completion date. The earn-out component will be issued at a 5-day Volume Weighted Average Price (VWAP) at the relevant time. The Company will utilise its capacity under ASX Listing Rule 7.1 for the completion shares and the earn-out component. The cash component will be paid from Spirit’s cash reserves and from its existing CBA debt facility.


Spirit’s Managing Director, Sol Lukatsky, said “This is a game changer for Spirit and through the acquisition of VPD Group, Spirit will build and strengthen its cloud, security, data and managed IT services capabilities whilst providing entry into expanded geographies in QLD and NSW for verticals such as Mining, Industrials and Aged Care.”


Spirit is also pleased to announce that the VPD Group Co-Founders will take senior roles across Spirit: Jason Wade as Chief Technology Officer and Luke Briggs as Chief Sales Officer – Wholesale. 


Jason Wade said: “It’s a really exciting time to be joining Spirit for Luke and myself and for our staff, customers and channel partners. The two businesses are highly complementary, and by bringing our products into the Spirit X sales platform we will be a serious threat to the large Telco providers. From the minute we met Sol and his team it was obvious that there were material synergies and growth we could generate together. 


VPD’s customers and national network of highly engaged channel partners will be able to leverage the wider offering available through access to the Spirit groups market leading product offering. Our joint strategy of bundling products for SME’s in the Spirit X Digital sales platform is sure to make the larger Telco players wake up and listen. We look forward to shaking things up in Telco & IT across Australia and providing the services that Australian SME’s deserve.”


Completion is subject to normal closing conditions and is expected to occur on 1 July 2020.


ASX Release 26th June 2020

ST1 LAUNCHES NEW NBN PRODUCT

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Read the article now on The Market Herald


  • Internet and IT specialist Spirit Telecom (ST1) has officially launched its new NBN Enterprise Ethernet product
  • The new product was launched through the company's Spirit X platform, which is a major internet product aggregator
  • With the launch of its new NBN service, Spirit Telecom's platform can now reach two million businesses across the country
  • Before this, the company said its Spirit X platform could only service roughly 100,000 addresses with fibre internet products
  • Managing Director Sol Lukatsky said the launch of today's new product moves Spirit to a new phase of growth
  • Shares in the company are trading 10 per cent higher today, currently worth 22 cents each

Internet and IT specialist Spirit Telecom (ST1) has expanded its national reach today through the launch of its NBN Enterprise Ethernet (NBN EE) product. 


The new product was launched through ST1's Spirit X platform, which the company touts as the largest aggregator of business-to-business (B2B) internet products in one online sales portal in Australia. 


NBN EE is an enterprise-grade fibre service. Through the Spirit X platform, the new product can reach in the vicinity of two million businesses across the country. 


This is a significant upgrade, given Spirit X could previously service roughly 100,000 addresses with fibre internet products. The company said the platform now has a "truly national footprint". 


Spirit Telecom Managing Director Sol Lukatsky said the launch of the NBN EE product moves the company into a new phase of growth. 


"Spirit X has already generated over 6200 service qualifications and leads in a few months," Sol explained. 


"With the ability to service a much larger number of businesses, Spirit can drive greater awareness of the platform and continue to fill the demand for bundled, high-speed internet links and IT services in one offering," he said. 


Additionally, Sol said the Spirit X product range is being promoted through the company's first national marketing campaign. 

While today's launch majorly expands ST1's national reach, the company said further organic growth will come through cross-selling opportunities as the Spirit X platform shifts from a data platform to a marketplace in the 2021 financial year.


ST1 said Spirit X will then offer cloud services, IT support, and security — meaning customers can buy bundled high-speed internet and IT services in one offering. 


Spirit Telecom has been rated at the country's fastest internet provider, with broadband speeds ranging from 25 megabits per seconds (Mbps) to a whopping one gigabit per second (Gbps). 


Following today's new product launch, ST1 shares are trading 10 per cent higher and worth 22 cents each. The company has a $93.8 million market cap.


Read the full article on The Market Herald 

THE NIMBLE GIANT KILLER TAKING ON TELCO

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Read the article now on The Market Herald


As the COVID-19 pandemic continues to infect economies across the globe, many listed companies are scrapping dividends, withdrawing guidance, and standing down staff across the country.


However, some companies are not only managing the global downturn, but are actively benefitting from the huge changes in how people work and play. 


Internet and IT service provider Spirit Telecom (ST1) is one such company. 


The company announced last Friday that revenue grew 146 per cent from January to April 2020 compared to the same period in 2019.

In the past few weeks, the company has announced record results, and a range of new institutional investors has come onto the register to support ST1's two-pronged organic and acquisition growth strategy. 


Moreover, ST1's share price has leapt to a market capitalisation at around $75 million. The company has at its disposal $14.8 million of cash and debt for new acquisitions and organic growth. Commonwealth Bank recently showed its approval of Spirit’s performance by increasing its debt facility to $10.9 million. 


This begs the question: what makes Spirit Telecom different?

Work and learn from home — and quickly


Spirit Telecom has been rated as Australia's fastest internet provider. The company touts its ability to provide internet speeds of 25 megabits per second (Mbps) to a whopping one gigabit per second (Gbps). 


For reference, your average Telstra NBN speed will have you downloading between 30 Mbps and 50 Mpbs. ST1's one Gpbs is the equivalent of 1000 Mpbs — making it 20 times quicker than a strong NBN speed. 


The big players in the world of internet providing were rolling out the revolutionary 5G internet throughout 2019. Spirit Telecom claims it's been using 5G tech since 2017. 


So, what does high-speed internet have to do with defying COVID-19-related share price trends?

It's all about the sudden and dramatic shift to remote work in businesses and schools across the country. 

Essential service providers like schools, small-to-medium businesses (SMBs) and aged care providers need high-speed internet and redundant internet links to function effectively.


The result is a dramatic upswing in demand for the services provided by tech companies like Spirit Telecom. 

So, Spirit does something very clever here: it bundles a range of IT services such as cloud applications, cybersecurity, infrastructure and IT support with the high-speed links. The company is a one-stop-shop with one bill and one account manager to speak with.

Additionally, it has developed its own digital sales platform called Spirit X which is the largest aggregator of business-to-business (B2B) internet products in one online sales portal.


This has supported the hefty 146 per cent growth in revenue in the first four months of 2020. 

Spirit reported $14.3 million in revenue over this period, with $4 million raked in over April alone. 


This total revenue growth was supported by a 216 per cent increase in business-to-business (B2B) revenue compared to the time period the year before, standing at $12.4 million at the end of April, and a 60 per cent increase to recurring revenue, at $8.6 million. 

Of course, a general concern for this sort of growth is that once the virus subsides and the economy returns to normal, so too will demand Spirit Telecom's services scale down. 


However, ST1 has been laying strong foundations for future growth long before the virus struck through a string of strategic acquisitions. 


A year of buyouts

While Spirit Telecom made four major acquisitions from 2012 to 2018 — namely the Voxcom, My Telecom, Phone Names, and World Without Wires purchases — 2019 was the year the company's acquisition strategy kicked into a new gear.

In one year, ST1 acquired LinkOne, Building Connect, Phoenix Austec, and Arinda IT. 


Of course, it didn't just stop there. In January 2020, Spirit bought Cloud Business Technology in Sydney.  

A month later, Spirit spent $6.9 million on the buyout of Trident Business group and Neptune Managed Services. With these two purchases, the company was set to launch its business unit, Trident IT Solutions. 


With a focus on providing cloud-based IT and internet solutions for schools, hospitals, aged care facilities, and more, the new business sector could not have come a better time. 


What's more, while businesses across the country are going into hibernation mode until the coronavirus pandemic subsides, Spirit recently raised $9.2 million through a share placement to continue its acquisition spree via a range of fund managers and high net worth families.


Why the buys?

Spirit's aggressive acquisitions strategy is all part of the company's plan to become Australia's largest provider of high-speed internet and IT to SMB sectors like hospitals, government branches, and education facilities: in simple terms, a provider of bundled IT and telco services.


Rather than cocoon its businesses and wait for the COVID-19 crisis to pass, the astute management team at Spirit Telecom is making the most of the unique opportunities presented by the virus.


Looking ahead, ST1 has a healthy balance sheet with $14.8 million available at the end of April in a mix of cash and debt. 

Moreover, the company is set to launch its NBN Enterprise Ethernet range through its Spirit X platform at the end of May. This product gives the company more than half a million business locations across the country in which to sell its products. 


Managing Director Sol Lukatsky put it simply when he said:

"This is a game-changer in terms of organic growth for Spirit." 

Managing Director,Sol Lukatsky


With more acquisitions in its line of sight and a throng of new customers available soon, Spirit Telecom is set for some substantial growth. The only question, then, remains: will investors hop on board now, or will they miss the opportunity?  

Spirit’s latest investor update presentation is available here


Read the article now on The Market Herald

ST1 INVESTOR VIRTUAL OPEN SESSION

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Rewatch the Investor Virtual Open Session Presentation & Trading Update here 


We’re an ASX listed (ST1) provider of Sky-Speed Internet, Managed IT Services and cloud-based solutions for small to medium-sized businesses (SMBs). Since 2005, we’ve been a disruptor in the telco industry – our fixed-wireless network now spans Australia’s east coast, providing SMBs with services to take their IT to the cloud and back again across our super-fast Sky-Speed network. We believe that not only do Australian businesses deserve better, faster, more reliable Internet, they also need a team that can support their IT needs. That’s why we’re a one-stop shop built to provide SMBs with all the IT services they need, so they can focus on what they do best: running their business.


Visit the Spirit Telecom Investor Centre Here

THE SPIRIT STORY

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MAKING THE IMPOSSIBLE POSSIBLE FOR BUSINESS


WHO WE ARE IN A NUTSHELL

We’re ASX listed (ST1) and a disruptor in the IT&T industry. We’ve developed our own advanced fixed wireless network, which means we can provide Australian small to medium sized-businesses (SMBs) with Sky-Speed Internet, along with Managed IT Services and cloud-based business solutions.


We’re rated as Australia’s fastest ISP* – with our symmetrical Internet speeds ranging from 25Mbps to a whopping 1Gbps. On top of this, our Managed IT Services mean you don’t have to worry about making sure IT works. Instead you can focus on running your business, powered by our Sky-Speed Internet.


And look, we don’t want to toot our own horn too much, but we also have an incredible team who put our customers at the centre of everything we do, and we like to think we do a mighty fine job of it. We’ve got some of the highest customer satisfaction and NPS scores in the industry to prove it.


Since 2005, our network has expanded through substantial organic growth and strategic acquisitions and now spans across Australia’s east coast. We’re not pumping the breaks on this anytime soon, either. We’re always expanding our reach and looking for ways we can provide more Australian businesses with the connectivity and tools they need.


By investing in the most exciting technology around, we continue to create our very own advanced fixed wireless network, which operates through the air and above the congestion. But we also have the people and the experience on the ground to support your IT needs, and ensure you stay connected in this fast-paced, non-stop, ever-changing world.


SO, WHERE DID IT ALL BEGIN?

Our journey has been one of super-fast growth, just like our Sky-Speed Internet. Thanks to the support of thousands of fellow Australians, we’ve transformed from a 2005 telco reseller to an ASX listed IT&T provider that just keeps on growing.


Some say the sky’s the limit, but we’re already here – and we have no intentions of slowing down when it comes to upgrading our Sky-Speed network, and expanding our product offerings. 


Not only do we provide Australian SMBs with Internet access they deserve, we also provide a full range of Managed IT Services and unified communications solutions.


In the past year, we’ve expanded our operations to include five offices across Australia.  This is all thanks to the significant network expansion of our Sky-Speed Internet through the acquisitions of LinkOne Group (QLD, NSW & VIC) and Building Connect, as well as the acquisition of Managed IT Service companies, Arinda IT and Phoenix Austec, allowing us to broaden our IT offering for SMBs. On top of this, we’re being noticed in the industry – with awards for our Sky-Speed Internet, including CRN Fast 50 and Deloitte Technology Fast 500!


We’re now a dedicated one-stop-shop for Australian SMBs, providing the tools they need to enhance their connectivity, improve their productivity – and grow their business. Next year we’re just as growth-focused: keep expanding. Keep upgrading. Keep simplifying all things IT for business.

We’ve got some big plans and more network expansion in the works, so stay tuned!


Visit Spirit Telecom's Website and Discover More Here 

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