Reverse Corp on track for turnaround: CEO

Reverse Corp on track for turnaround: CEO

Reverse Corp (ASX:CQT) believes it is on track this financial year to flip its run of declines in profit.

The reverse calling service and payphone operator's net profit declined from $20.1 million in FY08 to just $4 million in FY10, then fell again to $1.3 million last financial year.

But in a letter to shareholders in Reverse Corp's annual report, published today, CEO Paul Jobbins said initiatives implemented over the past 12 months to combat the declines are taking shape.

These initiatives “have successfully repositioned the company and restrengthened the business for a return to profit,” he said.

The company's focus is now on regaining lost market share by tweaking its strategy and product offerings.

Reverse Corp's performance in Australia will be influenced by the outcome of ongoing negotiations with Telstra (ASX:TLS) for the renewal of the company's fixed line services contract.

Telstra recently issued a short-term extension on this agreement until the start of next calendar year, to allow discussions to continue. But in his own letter, chairman Peter Ritchie said the company is confident of reaching a new agreement.

Reverse Corp, which currently operates in Australia, the UK and the Republic of Ireland, is also pursuing expansion into the Spanish market.

In FY11 Reverse Corp's Australian business, including payphone operator TriTel Australia, generated revenue of $9.4 million and ebitda of $2 million. Group revenue fell to $14.6 million, from $23.6 million a year earlier.

REF shares stayed flat on Tuesday at $0.038.

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Tags TelecommunicationsReverse CorpPaul JobbinsGuidanceASX:REFturnaroundPeter Ritchie

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