Swoop Boosts Cash and Customers Ahead of Melbourne Fibre Project Sale
Swoop Holdings reported a strong quarter with cash reserves rising above $8.8 million and a 4% increase in customer numbers, supported by a new wholesale deal with TPG Telecom and pending proceeds from the Melbourne Fibre project sale.
- Cash and equivalents exceed $8.8 million
- Customer base grows 4% to 174,000
- New TPG wholesale partnership to improve margins
- Melbourne Fibre project sale expected to deliver $11 million
- Operating cash flow improves by over $2 million excluding project impact
Quarterly Cash Flow Strengthens on One-Off Receipts
Swoop Holdings Limited (ASX:SWP) ended the June quarter with cash and cash equivalents exceeding $8.8 million, marking a notable improvement from the previous quarter’s $4.2 million. Operating cash flow turned positive at $2.8 million, bolstered by one-off commercial agreement receipts that helped offset ongoing costs. Excluding the impact of the Melbourne Fibre project, the company saw a more than $2 million improvement in net receipts from customers versus the prior quarter, signaling underlying operational momentum.
Customer Growth Continues Amid Strategic Wholesale Partnership
Customer numbers across Swoop’s mobile and NBN retail segments rose 4% during the quarter to 174,000, excluding wholesale and fixed wireless users. This growth coincides with the launch of a new mobile wholesale partnership with TPG Telecom Ltd, announced mid-June. The deal grants Swoop access to TPG’s tier-one network infrastructure, expected to drive improved unit economics and margins. This arrangement complements Swoop’s dual-brand strategy, which includes Moose Mobile, aiming to enhance service reliability and competitive pricing.
Melbourne Fibre Project Sale Nears Completion
Swoop entered a binding agreement to sell its Melbourne Fibre project to Xenith IG Australia Holdings Pty Ltd for $11 million, with the transaction anticipated to complete in the first quarter of FY27 upon customary conditions being met. To date, Swoop has recovered approximately $2.6 million in project costs from the purchaser, contributing to a significant reduction in investing cash outflows this quarter. The sale is part of Swoop’s strategy to divest non-core assets and focus on its core telecommunications services, with expected proceeds to bolster the company’s financial position.
Financing Facilities Provide Adequate Liquidity Cushion
At quarter-end, Swoop maintained secured financing facilities totaling $29.4 million, with $22.5 million drawn. The company holds nearly $6.8 million in undrawn credit standby and corporate card facilities, providing additional liquidity. These facilities, arranged through Westpac Banking Corporation, support capital expenditure and working capital requirements, with terms extending to June 2027.
Governance and Costs
Director fees for the quarter amounted to $60,000, reflecting routine governance expenses. The company’s focus remains on balancing operational growth with disciplined cost management as it navigates the competitive Australian telecommunications landscape.
Bottom Line?
Swoop’s improving cash flow and customer growth, combined with the imminent Melbourne Fibre sale and new TPG partnership, set the stage for a leaner, more focused business in FY27.
Questions in the middle?
- How will the new TPG wholesale deal impact Swoop’s margins and subscriber growth over the next year?
- What conditions remain to be satisfied before the Melbourne Fibre project sale completes in Q1 FY27?
- Can Swoop sustain positive operating cash flow once one-off commercial receipts normalize?
