Events A strong record interim result shows integration success M2 has already in the first half overcome the challenge and made an excellent start on the integration and gearing up of its major acquisitions. Numbers are somewhat ahead of our expectations and will improve further in 2H10, despite some further one-off costs, ready for a significant boost, as expected, in FY11.
Impact and Prospects MTU has a market share of around 1%. Its focus on Small & Medium Enterprises (SME) targets a sector mainly serviced by Telstra by default, as most telcos aim at the larger corporations, big SMEs and residential. As MTUs expanded machine slips into higher gear, with enhanced buying and other efficiencies, large dedicated sales channels and well-known brands we expect strong growth in revenues and margins. A 33% net debt to equity and over 12 times interest cover allows MTU to return to acquisition after a self-imposed six-month pause to digest the PEO and CDR acquisitions. We expect M2 to exceed our figures.
Recommendation Impact An easy to recommend Buy, particularly for sound growth in a volatile market
