SkyNetGlobal's year-old strategy of diversification and services provision appears to be paying off, with the wireless access specialist turning in profits higher than expected for the half-year to 31 December.
The company has reported net profit of $792,000 -- well over halfway to a forecast $1 million net profit for the full year ending 30 June 2004.
Revenue from ordinary activities for the six months ended 31 December 2003 rose 120 percent to $2.12 million -- up from $963,789 for the whole year ended 30 June 2003. The firm achieved positive cashflow for the first time in the first quarter of the 2003-04 fiscal year.
SkyNetGlobal sold its hotspot network infrastructure to Telstra in January 2003 for $3.3 million and shifted its Wireless Hotspots business to a reseller model.
Sydney market research firm Aegis Equities Research in a November 2003 report said the $12 million wireless access provider had thus effectively shifted from a high fixed cost, high capital expenditure model to one with lower risk variable cost and low capital expenditure signified by high repeat custom and strong subscriber growth.
The company had further reinforced its low risk business model by acquiring home automation distributor Smart Connect (Wholesale). The wireless access industry holds good prospects for resellers and service providers, Aegis said.
Jonathan Soon, CEO of SkyNetGlobal -- whose company Sooncorp Holdings owns 10 percent of the wireless access provider -- said the firm had been growing fast.
'The whole last 12 months, we have been doing a lot of restructuring and basically we've moved to diversify our revenue streams -- there's a big difference to how we were working 12 months ago,' he said.
Soon said he was 'optimistic' that the initial $1 million net profit prediction would be exceeded in the second half of the 2003-04 financial year, with a main focus on wireless and home automation.
SkyNetGlobal's W Home home automation division, including Smart Connect (Wholesale), had turned in $411,000 net profit for the half year to 31 December, which was also more than expected, Soon said.
For the next half, Soon would concentrate on growing revenue across the whole business.
'We have got quite a few marketing and promotional challenges for the next six months to increase awareness of the company and the products and quite a few strategic alliances and partnerships are in the midst of being finalised that will drive our distribution channel and revenues,' he said.
The next few days would see the launch of SkyNetGlobal's MacDonald's 139-strong hotspot network in Singapore. 'We are just finalising the date for that -- I think it will be the third or fourth of February, but the actual launch might not be the third,' he said.
The company's Connector remote access offering serves 2,500 wireless hotspots worldwide. SkyNetGlobal also this year signed exclusive deals to provide wireless broadband and home automation products to 13 buildings comprising 2,300 flats, in places such as Sydney's waterfront suburb Pyrmont.
In another deal, SkyNetGlobal bought out Australian wireless networking provider Star-Tech Communications to enter the WLAN market.
'In this industry, you have to move fast. You can't just stand there -- but it is at a managed pace. We're not out of control,' Soon said. 'I think the wireless hotspot market is going to continue to grow steadily this year.'
