Rapidly growing telecommunications company, M2 Group Ltd (ASX: MTU), has experienced another explosive half year of growth with both earnings and revenues jumping higher.
In the six months to 31 December 2014 the owner of popular brands like Dodo, Primus and Eftel increased revenue 8%, to $546.2 million, whilst net profit after tax, or NPAT, jumped 25% to $38.5 million, versus the prior corresponding period.
Earnings per share followed suit with a healthy 23% jump, to 21.2 cents and total subscribers grew 9%, to 1.634 million.
Pleasingly, management announced a fully franked interim dividend of 15 cents per share, a whopping 30% higher than in the prior period.
Commenting on the results CEO, Geoff Horth said, "We are pleased to deliver to shareholders this excellent result for the first half, through a dedicated program of internal improvement combined with organic growth. These results are a credit to our outstanding team who have worked diligently on delivering on our strategy, the result of which is a business that is increasing share in its core markets and maximising shareholder returns on that growth via a relentless pursuit of operating efficiency."
M2's strong push into complementary utilities, such as power and gas, continued in the half year, with Commander connecting more than 1,000 customers to its electricity service, following a recent soft launch.
Looking ahead, management have reaffirmed their full year guidance of 8-9% revenue growth and 15-20% NPAT growth. Capital expenditure is expected to be 2.5% of total revenue, despite the ongoing rollout of Dodo Connect Kiosks in Queensland, New South Wales and Victoria.
Should you buy M2 Group shares?
Although shares of M2 are already up an impressive 42% in the past year, it continues to present as a compelling long-term investment for investors seeking both income and growth. At today's open price of $9.42, the stock boasts an impressive trailing dividend yield of 3.1% fully franked and it trades at just 17 times earnings per share.
