Highlights

Dreamscape Networks Limited announces a record maiden full year result as an ASX listed company, with higher margins, stronger operating cash flows and growing earnings.

Record Year

Dreamscape Networks Limited announces a record maiden full year result as an ASX listed company, with higher margins, stronger operating cash flows and growing earnings.Mark Evans, MD & CEO, commented:

“FY17 was a record year for Dreamscape Networks. We grew all pillars of the business and generated record cash and profits in our first year as a publicly listed company. We are also pleased to have delivered on the FY17 Prospectus profit forecast. With two successful acquisitions completed since listing in December 2016 and an exciting pipeline of new products, I am confident that we will continue to expand our operations.

“This is an exciting time in Dreamscape Network’s journey as we transition from being a domain name provider to a leading online solutions provider across Australia, New Zealand and South East Asia.

“We are well positioned to deliver increased revenues, free cash flow and earnings in FY18 as we continue to focus on executing our growth strategy.”

Growing Bookings reflect shift to online solutions

Dreamscape Networks deliver Total Bookings of $53.1 million for FY17, up 6.4% on FY16 Pro Forma. FY17 Bookings clearly show the transition to higher margin pillars – Domains follow industry growth trends, increasing 0.8% to $24.7 million; Hosting sees strong growth, up 13% to $22.2 million; and Solutions is up 7% to $6.2 million.

Earnings growing faster than revenues

Well Positioned to Deliver Another Record Year

Revenue for FY17 is up 8.2% to $46.4 million, underpinned by growing Bookings in Hosting and Solutions.

Reflecting Dreamscape Networks’ shift to higher margin pillars, FY17 earnings grew faster than revenues, with Adjusted EBITDA1 up 36.7% to $10.8 million.

Net Profit After Tax (NPAT)2 was $2.1 million, up 91% on FY16 Pro Forma, driven by higher margin Bookings and prudent cost management.

Dreamscape Networks continued to generate strong cash flows, with operating cash flow up 14.2% to $12.1 million. The Company completed the period with $17.7 million cash and cash equivalents, with no debt.

Acquisitions will add value in FY18

Dreamscape Networks has completed two acquisitions in the seven months since listing on ASX, with the addition of Net Logistics (an Australian hosting provider) on 31 March 2017, and Vodien Group (Singapore’s #1 Hosting provider and #3 .sg domain provider) on 31 July 2017. Both acquisitions were internally funded and are expected to be Earnings Per Share accretive in FY18.

The acquisition of Vodien Group is a pivotal acquisition for the Company that accelerates Dreamscape Network’s South-East Asian growth plans and enhances the regional capability of the Company’s senior executive team.

Positive outlook for continued growth

The FY17 results reflect the successful execution of Dreamscape Networks' strategy to transition to a trusted and affordable online solutions providerThe FY17 results reflect the successful execution of the Company’s strategy to transition to a trusted and affordable online solutions provider. This transition will continue throughout FY18, with a focus on higher margin Hosting and Solutions growth.

Dreamscape Network’s sales team is delivering results and will play a key role in improving the product mix and earnings of the Company by upselling and cross-selling into the higher margin pillars.

Product innovation and development is a key focus to drive growing sales. The Company plans to release additional add-on value products for its Solutions pillar in FY18. These initiatives are expected to further improve engagement, ABPU and the lifetime value of customers.

The acquisition of Vodien Group was transformational, and will aggressively bring forward Dreamscape Network’s growth strategy of expanding operations in South-East Asia.

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