The 5G Networks Ltd (ASX: 5GN) share price has been a positive performer on Friday morning.
At the time of writing, the telecommunications carrier’s shares are up 3% to $1.57.
Why is the 5G Networks share price pushing higher?
Investors have been buying 5G Networks shares this morning after it revealed that it expects to report a record first half profit.
According to the release, for the six months ended 31 December, 5G Networks expects to report revenue in the range of $27.5 million to $28.5 million. This will be a 10% to 14% jump on the prior corresponding period.
Thanks to the widening of its earnings before interest, tax, depreciation and amortisation (EBITDA) margin from 12% to 13%, management expects to report a record EBITDA of $3.5 million to $3.8 million.
This represents an increase of 16.7% to 26.7% compared to the same period last year.
Webcentral acquisition completes
In addition to this update, the company has revealed that the takeover of Webcentral is now complete.
Management spoke very positively about the acquisition and sees numerous growth opportunities.
It commented: “5GN currently provide numerous Cloud, Telecommunications and Managed IT services to WCG; these services represent our core strengths. The strategic business relationship will continue to expand, with 5GN now seeking to leverage WCG capacity for software code development for operational improvement and automation across our service delivery platforms.”
“Importantly, the acquisition of WCG has enabled 5GN to fast track its exposure to the SMB market and WCG’s 330,000 existing customers via its online sales portal. Additionally, 5GN will also develop a comparable e-commerce system as used in the WCG portal to deliver low touch, automated services to its wholesale clients.”
“5GN continues to add to its strong track record for prudently completing acquisitions that bring accretive value through increased earnings and growth. This most recent acquisition in particular sets the stage for the next phase of 5GN’s strategy for continuing its vertical integration across the industry,” it concluded.
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More reading
- New twist in 5G Networks (ASX:5GN) takeover of ASX-listed Webcentral
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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