Telecoms provider says shift from on-site equipment installations to managed services will start bearing fruit over coming years
Azzurri Communications doesn’t expect any revenue growth in its current financial year after posting a fifth consecutive fall in annual turnover.
The comments were made by the firm’s CEO Chris Jagusz, after announcing revenues had fell £6.5 million year-on-year (ending April 30) to £104.5 million.
The results mean it has now shed almost 30 per cent of its revenues since a high point of £149.5 million in 2010. Operating profit fell from £774,000 a year ago to a loss of £1.5 million. It has a total mobile connection base of 60,000 users.
Jagusz said the results were reflective of the shrinking margins in the mobile and fixed-markets as well as trends from its customers opting for managed services rather than installations.
He also confessed sales at the firm slowed due to mounting debts of around £87 million. The firms has since restructured its debts (now £25 million) and expects to return to growth in its next financial year.
He claims the company has just enjoyed its “best” sales quarter for two years and expects the recurring revenues it is generating from managed services to start leading to revenue growth shortly.
“This year will be pretty flat at a revenue level,” said Jagusz. “About 70 per cent of our turnover is contract and recurring revenue and that proportion will grow. We will see the growth in the top line (revenues) coming next year rather than this year. Things that we did last year will help to improve profitability this year.”
He added: “It was well known that a couple of years ago we had a relatively high debt burden compared to the cash generation of the business. That gave some potential customers cause for concern, it slowed the business down a bit, that’s why the refinancing was important.”