The share price of telecommunications service provider Uniti Group Ltd [ASX:UWL] has set a fresh 52-week high today on the release of its half-year results.
Having posted record revenue and earnings in the half the UWL share price has jumped 7.34%, or 14.5 cents, to trade at $2.12 per share.
Source: Trading View
It has been a solid few months for the UWL share price after the company announced it would acquire Telstra Corporation Ltd [ASX:TLS] assets in December.
Followed by a share placement that at a price of $1.50 per new share, represents a 1.4% premium to the last traded price at the time.
Business booms on changed work landscape
At its core, UWL is an infrastructure owner and operator.
Specifically, they own internet fibre infrastructure — now a crucial component for work, not only in the office but now in the home.
And it’s that core business that has dominated UWL earnings this half after the company acquired several key entities during the half.
Group revenue ballooned 148% to $54.6 million during the half compared to the previous corresponding period.
Underlying earnings before interest and tax doubled revenue growth, jumping 307% to $29.3 million.
Of that figure, UWL’s core fibre infrastructure generates 63%.
A figure expected to grow to 79% at their current run rate.
Managing Director and CEO Michael Simmons commented on the Group’s solid performance:
‘Uniti has transformed into a core infrastructure owner and operator, enjoying scale and relevance in our chosen markets & with the unique advantage of having “locked-in” organic growth, thanks to our large and growing contracted fibre order book.
‘We are today a core infrastructure business, generating operating free cash flow exceeding 60% of our earnings, after investing in the further expansion of our fibre telecommunications infrastructure.
‘The fact that 75% of our existing fully funded, contracted fibre order book will be deployed in the coming 5 years, and is continuing to grow at improving rates, assures our shareholders of continued steep earnings growth and free cash generation over both the near and longer term.’
Acquisitions only just coming into play
Having completed three acquisitions in the closing weeks of 1H FY2021, UWL full-year results have potential to be far larger than those posted today.
In fact, given the company’s current run rate, UWL have calculated that full-year revenue should hit somewhere around the $200 million mark.
While earnings should climb to $116 million.
A tantalising prospect for shareholders.
But if you feel like you’ve missed the boat with Uniti Group today, all is not lost. In one of our latest reports we discuss four innovative Aussie small-cap stocks with potential to capitalise on post-lockdown trends — similar to what we’ve seen UWL do. If you’re keen to know more, download a free copy of the report here.
Regards,
Lachlann Tierney,
For Money Morning
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