M2 upgrades FY11 profit outlook by 20%

M2 upgrades FY11 profit outlook by 20%

M2 Telecom (ASX:MTU) has upgraded its earnings guidance for FY11 by up to 20%, on the back of its recent acquisitions and more favourable business agreements.

The company is now forecasting underlying net profit of between $30.4 million and $31.9 million, a 20% increase in the midpoint range compared to guidance issued at the start of the financial year.

Revenue is projected to grow 5.7% to between $450 million and $470 million, while ebitda is set for 18% growth to $48.5 million-$50 million.

M2 has attributed the increased expectations to its recently-completed acquisitions of the business assets of Clear Telecoms for $24.5 million and AUSTAR's mobile customers for $2 million.

The operator is also expecting improvements in wholesale purchasing arrangements for some telecom services in the financial year.

Audited results for the full-year are scheduled to be released on August 29.

M2 provides retail and wholesale fixed and mobile telecom service, and has been the exclusive post-paid mobile services aggregator for Optus since mid-2006.

MTU shares fell 2.35% on Monday to $3.740.

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