Olive Communications demonstrates growth in Cloud services and announces full year financial results
- 03.09.2019 08:24 am
High Wycombe based Olive Communications, one of the UK’s market leading Cloud Telephony and Unified Communications (UC) provider, shows significant growth in cloud revenues, up 48% at year end, as it releases its year end annual results.
The BGF-backed company has won major new contracts through the year, including Yorkshire Building Society and a leading retailer with 800 stores and 10,000 staff, providing contact centre and unified communications services.
Olive Communications was founded in 2003 and continues to build on its roots as a mobile service provider and Vodafone’s second largest strategic partner, by offering a full suite of communications services including mobile, broadband and data, unified comms, contact centre and voice. In 2013 – 2014 Olive grew rapidly through M&A, customer acquisition and growth in service capabilities.
Olive’s accounts to January 2018 show continued growth in profitability and cash flow with latest January 2019 results maintaining this trajectory rise. Olive’s EBITDA has risen 43% to £2.1m on revenues down 7.6% at £28.9m, as a consequence of ongoing mobile pressures such as EU roaming charges and Mobile Network Operator moves to optimise tarifs. Cloud revenues (including managed services encompassing unified comms, contact centre, mobile, cyber and Microsoft services) continue to show strong growth, and comprise 48% of revenues at year end.
This growth has driven a three percentage points improvement in gross margins to 44.2%, with gross profit only falling less than 1%. Ongoing cost reductions resulted in a 43% increase in EBITDA to £2.1m, for a 7.3% margin. Operating cash flow of £3.8m represented 178% conversion of EBITDA due to positive working capital movements, funding £1.1m of interest and a modest £269k of capex, facilitating a £2.5m decline in net debt to £10.4m, or just £0.7m excluding shareholder loan notes.
Brett Morris, CFO at Olive Communications said “Our cloud services are going from strength-to-strength, delivering high recurring revenues plus associated project and implementation revenues.
“This continued growth in Cloud services, supported by Vodafone encouraging mobile only users to adopt OneNet unified comms, together with a better year for mobile means we expect revenues to return to growth in the current year to January 2020. EBITDA margins are set to continue to expand, which all points to continuing EBITDA growth for the current year.”
Other developments include the opening of a new Australian operation to support its Global 24/7 Cloud Managed Service Platform, with similar plans underway for North America. And last month Andrew Jane was appointed Chief Technology Officer, to drive and support its global technology and cloud services strategy during this time of accelerated growth.
Martin Flick, CEO at Olive Communications said, “These are exciting times for Olive. With revenue rising Olive is set to embark on a period of growth in the UK and globally. We’re now in a strong position to consider further expansion opportunities and M&A activity to enhance our capabilities even more, and to develop our proposition to the benefit of our growing list of customers.”