Despite posting a wider loss that the prior period, Voice over Internet service provider engin is “pleased” with its results thanks to some benchmarks indicating it’s on its way to profitable trading.
Compared to the first half of 2005, the period ending December 31, 2005 showed that subscriber growth is accelerating with new sign-ups in the first two months of this year showing even more promise.
In the middle of last year, engin had achieved only 5,800 sign-ups but by the end of the calendar year, that number had grown to 18,100 subscribers. Already, this year, by the end of February more than 24,000 customers had signed up to engin’s service, a 30 per cent increase in only two months.
Revenues were looking healthier too. A 143 per cent increase from $1.25 million in the first half of calendar 2005 to $3.03 million for the July to December half, however failed to help the company reach breakeven.
The half year loss after tax of $3.75 million (EBITDA loss $5.13 million) was in fact higher than the half year ended June 2005 when the company lost only $3.41 million (EBITDA loss $3.79 million).
However, CEO Ilka Tales is confident the company has sufficient cash reserves to see it through to break even thanks to a capital raising last August which saw 29.5 million add more than $4million to the company’s balance sheet. The company’s cash reserves now stand at $5.70 million.
Higher subscriber numbers pushed the number of voice minutes carried to 6,600,000 minutes for the month of December, but with infrastructure in place operational costs will not grow as fast.
CEO Tales said: “We are pleased with our progress, all our business drivers indicate we are on target to meet our business goals. The results show that our growth has been significant and we have balanced this growth with operational effectiveness. We look forward to making even greater strides in 2006 and delivering further savings to Australian consumers and businesses using broadband telephony”.
Tales points out that metric such as number of subscribers per employee and customers acquisition costs will ultimately drive efficiency into the organisation.
Marketing cost per new subscriber line fell from $245 in the first half of last year to just $95 by the second half. Similarly, the number of paying subscriber lines per employee rose from 111 to 241 between the two periods.