As far as I understand, the company is a fibre infrastructure business that has three pillars of business, wholesales & infrastructure, a Communications Platform as a Services, and Consumer & business. The company grew so quickly in revenue, earnings and free cash flow since listing by buying companies over 2019-2020. Now the company says it is under organic growth. Since the listing, now the company 6th largest company in ASX in April 2021, at the time of writing November 2021, it is 4th largest after Spark New Zealand Ltd (SPK). Now it is bigger than Chorus and Vocus (Vocal was removed from the list because of Voyage taking over）.
| FY19H1 | FY19H2 | FY20H1 | FY20H2 | FY21H1 | FY21H2 | |
| Revenue (A$m) | 3.1 | 11.3 | 22.0 | 36.2 | 54.6 | 105.3 |
| EBITDA (A$m) | — | 0.7 | 7.2 | 19.3 | 29.3 | 64.5 |
The UWL was listed in February 2019. The company is continuously growing However, the company underlying EPS is still $0.06 on FY20 and $0.09 on FY21. Looking at the revenue of 138.7m and NPAT of 29.2m over shares on issue is 685.22m, the current share price (around $4.08 on 7th November 2021) is quite expensive. It is a growth share and by looking at the share price, investors generally think that the company will be going well. But no one can see the future, so we need to check out the company keeps doing well and delivers until they find a good position in the internet infrastructure business.
One can say the Uniti can be on the right track for several reasons,
- Property markets are expanding …. Even during the pandemic, the demand for the property is very strong. After lockdown was lifted, the constructions started, the could put the cable in for those properties.
- Life style is changing …. I am not sure the future but I believe more people want to work from home now, maybe some employee likes to buy home bit far from city and they need a good connectivity to work remotely.
- Digital economy is coming …. The need for the connectivity at home, the office, and fuctory is only expanding. If they can deliver good, fast, relaible connectivity, they will get more costomers. These new degital economy, such as e-sports, IoT, AI, smart factories all need connectivity.
- They have recurring bussiness … They are expanding in greenfield, more and more contracted / in contracted premise to provide connectivity. Once they are stable, the company can have recurring bussiness with the customers.
Now the company is the 4th largest listed in ASX, by thinking of Spark is for New Zealanders, the UWL now is the 3rd in Australia. If people think the company could be next Telstra or TPG, the market capitalization can go 4 times to 10 times. Once they can provide excellent connectivity for the premise in Australia after they get a good number of customers in Australia, the company will have a good recurring business. On the other hand, the total secured premise is just over 0.5 million, although the expanding rapidly like 15% in a half year, still, we need to check in these number continuously grow.
| FY21H1 | FY21H2 | ratio | |
| Total Secured premises (k) | 438 | 501.9 | 15.0% |
This company is one of the growth stocks in ASX, In the last 12 months, the company grew statedly, it became 3.34 times larger in the last 12 months. It has been tough in the last two months. Maybe investors do not like very low EPS, high P/E ratio. I should see this last 2 months’ trend, we can see the company will actually fly or the share price could stack around $4/shares. Let see how the company will grow.