Total revenue of €8.0 million
Gross Margin of 80%
13 new customers gained in the quarter
Increased local focus combined with simplification of the product portfolio to deliver improved market positioning
London, UNITED KINGDOM – 13 May 2010 euNetworks Group Limited (SGX: H23.SI), announced quarterly growth in total revenue of 14% against first quarter 2009, achieving €8.0 million revenue. Gross Margin was 80%, remaining constant compared to first quarter 2009. Revenue growth has been accompanied by a 14% increase in direct costs from first quarter 2009. Focus on growing long term recurring revenue continued in the quarter, with 13 new customer wins in the finance, wholesale and media segments, with an average contract length of 25 months.
At the beginning of 2010, the Company changed the way gross profit is presented. Gross profit is now determined as revenues less expenses directly related to revenues, or „Direct Network Expense‟. The management and directors of the Company believe that this presentation of gross profit is in line with standard telecoms industry practice and will provide a clearer picture of the profitability of current and future customer revenues.
“We have made good progress through the first quarter, delivering revenue growth, gaining more long term recurring revenue contracts and establishing customer relationships which will deliver further revenue growth to the business in the future,” said Brady Rafuse, Chief Executive Officer of euNetworks. “Improving our position in the European market as a bandwidth infrastructure provider is crucial as we move through 2010. Following the simplification of our product portfolio in the quarter along with increasing our local focus to leverage market growth opportunities, I am confident we are moving forward with our plan. The completion of the Rights Issue on 6 April 2010 and a growing sales funnel provides a solid platform for the year.”