M2 Group (ASX:MTU) is a provider of the full suite of traditional and next generation telecommunications products, in addition to utility services. The company has 4 main brands, consisting of Dodo, Iprimus, engine and COMMANDER. Invetsment thesis, 1) M2 does not own its own telecommunications infrastructure. It has strategically avoided this and instead buys ‘airtime’ off wholesale providers. This means its business model is capital light, without the need for excessive annual capital expenditure to maintain and upgrade infrastructure. 2) Not having to invest in telecommunications infrastructure allows the company to concentrate on marketing. On this front, they are one of the most aggressive, fast moving and innovative companies in the market. Additionally the company recently acquired Call Plus, NZ’s 3rd largest ISP for a reasonable 5.6X 2016 EBITDA. The NBN will level the playing field in this sector due to reduced barriers to entry. By leveraging the strength of the ‘dodo’ and Commander brands, and having a strong national distribution network,M2 is well prepared for the NBN rollout. See attachment for more information or subscribe to our newsletter here:(VIEW LINK)
Founded in 2003, Leyland Private Asset Management is an independently owned firm specialising in Australian Stock Market and Fixed Interest Investments for individuals, companies, self-managed super funds, institutions and family offices.