Amcom clears high earnings hurdle

The telco leapt after guiding for yet another year of double-digit growth as its new businesses gain traction.

Market darling Amcom Telecommunications (AMM) has jumped the most in five months after promising another year of double-digit growth.

The telco tacked on 5.7% to $1.94 at 1300 AEST, with the company expecting its core data networks business to remain strong into the next financial year, aided by newer offerings such as its cloud services division and the hosted collaboration services with Cisco systems.

Underlying net profit after tax (NPAT) increased by 23% to 20.8 million, above guidance set in the half-year for 20% growth, and in line with consensus forecasts.

Investors were unfazed that revenue for 2012-13 came in at $157.7 million, below consensus forecasts for $165.5 million, and that the final dividend announced was 3.5 cents per share – 0.3 cents lower than analysts had expected. The full-year dividend is 5.5 cents a share.

Amcom is trading at premium with its price-earnings ratio at a hefty 18.6 times – higher than the telco sector's 14.8 times and well above Amcom's five-year average of 12.1 times. But companies that deliver 11 consecutive years of at least 20% growth usually command a nice premium.

Amcom, which is part of the Uncapped 100, said the next update on its guidance would be at the annual general meeting in November.

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