Overview of Comms Group's 1st half FY24 results

Comms Group Limited (ASX: $CCG) has released its 1st half FY24 results, reporting continued revenue growth and solid underlying profit growth trends across all business units. The company's annualised monthly operating revenues are tracking above $53m, with a group gross margin increase to 48% compared to the previous corresponding period. Operating expenses have been largely flat, and the company expects an overall increase in revenue in the 2nd half of FY24. Comms Group anticipates that gross profit margin and operating expenses will be largely in line with the 1st half of FY24, with an expectation of EBITDA increase in the 2nd half of the fiscal year.

Executive Commentary on 1st half FY24 results

The company's financial performance in the 1st half of FY24 has been robust, with continued revenue growth and solid underlying profit growth trends across all business units. We are pleased with the overall increase in gross profit and EBITDA, and we expect this positive trajectory to continue in the 2nd half of the fiscal year. Our strategic focus on new sales contracts and supply cost management has yielded positive results, and we anticipate further growth in revenues across all three business units. Additionally, the ongoing strategic review is aimed at maximizing shareholder value, and we are committed to exploring all available options to achieve this goal.

Summary of 1st half FY24 results and outlook

Comms Group Limited has reported continued revenue growth and solid underlying profit growth trends in the 1st half of FY24. The company anticipates growth across all three business units in the fiscal year, with a revenue target of $53m to $55m and an underlying EBITDA target of $6.5m to $7m. The ongoing strategic review is focused on maximizing shareholder value, with discussions underway regarding the potential sale of certain businesses to concentrate resources on the Global business. Comms Group has also announced the adoption of a dividend policy from the end of FY24, aiming to pay a target payout ratio of 30% to 40% of sustainable profits. The company's outlook includes expectations of further revenue growth, strategic changes, and a commitment to returning funds to shareholders via dividends or capital returns, subject to liquidity and strategic growth requirements.