Azzurri Communications no longer in “financial distress”

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EBITDA up 18 per cent to £5.9 million as CEO hails improving margins

Mobile dealer Azzurri Communications claims the financial woes that blighted the company in recent years are now behind it, after it saw gross profits increase three per cent year-on-year to £14.6 million.

In 2013, Azzurri reduced its debt by more than 75 per cent, from £110 million to £25 million, as part of a refinancing package. At its peak, Azzurri owed nearly £200 million, but this is now less than £20 million.

CEO Chris Jagusz, who joined in 2014, claimed the mounting debts had slowed sales at the Weybridge-based O2 and EE partner, but said a move to focus on recurring revenues from managed services was beginning to pay off, with EBITDA up 18 per cent to £5.9 million.

“We refinanced in 2013 and that brought the level of debt down to a much more manageable position, and since then we haven’t looked in financial distress,” Jagusz told Mobile News.

“We’ve spent a lot of time improving the quality of the business that we do. We’ve repositioned our product portfolio into higher growth areas, such as Unified Communications as a Service (UCaaS).

“We’ve added more services to what we offer, and changed the way we look at integrating projects, but we’ve also looked at streamlining procurement and that has seen us improve our margins.”

Revenue fall

Revenue at the firm has fallen slightly from £97 million in 2014 to £95 million, but this follows years of much more significant declines of more than 30 per cent revenue shed from a 2010 high point of £149.5 million.

Jagusz said this was in part down to a shift in the industry away from customers buying just products into buying more managed services, which has seen recurring revenue make up two thirds of Azzurri’s margins.

Strong partnership

2015 also saw the managed services provider sign up as an EE direct partner to resell the operators services to enterprises and small businesses under its own branding. It has also remained part of O2’s Direct Partner Network.

Jagusz claims the relationship with EE has yielded positive results for Azzurri, although he refused to share numbers. But he admitted that the majority of Azzurri’s 60,000 mobile connections are still through O2.

“Working with EE has given us more flexibility as we are using a resale model with EE, as opposed to dealer model with O2. So, that flexibility has been great, but we’ve still got a really strong partnership with O2.”

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