John Linton The new year got underway yesterday and it was a good start in most areas of Exetel's world. While it may seem to be somewhat obsessive to complete all planning and give all employees whose responsibilities change new letters of offer by midday on the first day of the new financial year it is a practice that I have tried to ensure happens for a very long time. It allows everyone within the company to now what they and the company generally is aiming to achieve - at least for those to whom such aspects of their daily working lives are important. The plans we have developed for the coming twelve months are very aggressive in terms of growth in our key areas of operation. This follows two years where are plans were very 'defensive' and, as things have turned out over the past 24 months, they probably should have been even more 'defensive'.
I have been looking at what the people we compete with are doing in the areas of the marketplaces that Exetel is most interested in. I do this as a matter of course every week/day depending on the time constraints but I have been putting more time in to this, often fruitless, exercise over the past two months. Of course, I can only 'see' what is on the public record in terms of web site pricing changes and public statements from the various company's spokespeople or what the public companies choose/have to report to the ASX. The ABS statistics will not be available for 8 weeks or so and over that period all but TPG of the public companies will post their year end results which will be the only 'hard facts' available for another 12 months. From what I see as shown on company web sites and the eerie lack of bragging by the usual suspects I would say there will be no 'pleasant surprises' when the year end results are reported.
Exetel's year has finished and, like our planning for this new year the results are known to us long before the year ends. We have had a reasonable year with growth just over double digits (down from the previous year of close to 15%) which was very close to the expectations set in our original FY2011 plan. Profit, such as it ever is with our company, was lower than planned for but still was well in the 'black'. In terms of market segments we didn't meet any of our residential targets (some by a long way) but that was more than made up for as we exceeded all of our business targets (some by a long way). We invested slightly more than we had planned to in both personnel and network capability but not by much. Our Sri Lankan operations are far stronger than they were at the beginning of FY2011 and our Australian network is significantly larger in total capacity with an increased level of redundancy built in to it than it had twelve months ago.
Two 'quiet years' have allowed us to build Exetel in ways that have prepared us for a period of far more aggressive growth which we begun yesterday. From my observations, which can of course be totally incorrect, I don't see the larger suppliers of communications services being in that position. One indication of a company's intentions of growing rather than 'having a quiet year' is whether they are recruiting or 'right sizing'. Sometimes this has to be made public when it is accomplished by 'slash and burn' - seldom the case in this industry. One way I form an opinion on how competitors are planning their coming year(s) is based on the number of unsolicited resumes seeking job possibilities. In good times that might be around one every 2 months or so. It's currently around one every two or three days (actually four in the past week).
Perhaps we have got it completely wrong and this year will be an incredibly tough year as bad or worse than the last two years and Exetel is stupid to be planning aggressively?
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