Rising Costs Challenge Comms Group Despite Record Sales and Acquisition
Comms Group delivered FY25 results at the upper end of guidance, boosted by record new sales and the acquisition of TasmaNet. The company sets sights on accelerated growth and integration benefits in FY26.
- FY25 revenue of A$56.6m and underlying EBITDA of A$5.7m at top end of guidance
- Record $10.4m in new annual recurring revenue (ARR) sales contracts, up 35% from FY24
- Completed acquisition of Tasmanian telco TasmaNet with integration on track
- Underlying EBITDA impacted by higher sales costs, expected to benefit FY26 onwards
- FY26 outlook targets run-rate revenue above $75m and underlying EBITDA of $9m to $10m
Strong FY25 Performance Amid Strategic Acquisition
Comms Group Limited (ASX, CCG) has reported its full-year financial results for FY25, delivering revenue and earnings at the upper end of its guidance range. The telecommunications and IT services provider posted operating revenue of A$56.6 million and an underlying EBITDA of A$5.7 million, reflecting steady growth and operational discipline.
The standout highlight was a record $10.4 million in new annual recurring revenue (ARR) sales contracts, a 35% increase over the prior year. This surge was driven primarily by the Global and Wholesale Unified Communications division, which saw new ARR wins nearly six times higher than FY24. This momentum underscores Comms Group’s expanding footprint in cloud communications and managed IT solutions.
TasmaNet Acquisition Integration Progresses
A major milestone during FY25 was the acquisition of TasmaNet, a leading Tasmanian telecommunications provider. The integration of TasmaNet is progressing according to plan, with management focused on rationalising duplicated networks and platforms to reduce costs and enhance capabilities. This strategic move is expected to unlock cross-selling opportunities and synergies that will underpin future growth.
While underlying EBITDA declined slightly compared to the previous year, this was largely due to increased sales costs associated with scaling the Global & Wholesale Unified Communications business. The company anticipates these investments will translate into stronger earnings and cash flow in FY26 and beyond.
Cash Flow and Dividend Stability
Comms Group reported operating cash flow of A$3.6 million, which includes one-off acquisition-related costs of A$0.7 million. Excluding these, operating cash flow actually increased by 13% compared to the prior year. Free cash flow stood at A$3.3 million. The board declared a final fully franked dividend of 0.125 cents per share, bringing total dividends for FY25 to 0.25 cents per share, signaling confidence in the company’s financial health.
Looking Ahead, FY26 Growth and Integration Focus
Looking forward, Comms Group is targeting a run-rate revenue exceeding A$75 million and an underlying EBITDA between A$9 million and A$10 million once the TasmaNet integration is complete. The company plans to leverage its growing global network to expand services to multinational corporations and wholesale partners, while also enhancing its direct sales and reseller channels to capture government and mid-market opportunities.
Management remains committed to disciplined execution, focusing on cash generation and debt reduction to maintain a conservative capital structure. The upcoming year will be pivotal as Comms Group seeks to convert its strategic investments into sustained financial performance.
Bottom Line?
Comms Group’s FY25 results set a solid foundation, but the true test will be delivering on integration and growth promises in FY26.
Questions in the middle?
- How quickly will TasmaNet integration translate into measurable cost savings and revenue synergies?
- What impact will increased sales costs have on long-term profitability beyond FY26?
- How will Comms Group’s expanding global footprint affect competitive positioning in the unified communications market?
