By Simon Woodhead
In keeping with tradition, we wanted to share our financial performance for 2023, now the audit is complete. Our customers value transparency and it seems only fair when our serious competitors all have to share results in the public domain, that we do so too.
Against a background of record CPI, and cost-prices increasing generally well above CPI, 2023 was a tough year. Looking around the market, BT managed 1% revenue growth, despite imposing CPI+2.9% (i.e. 14%, depending on which CPI they used and when) price increases across its wholesale and retail base. Even Gamma only managed 7.7% while self-proclaimed “global” operator Bandwidth grew only 5%. These are much larger than Simwood of course, arguably with market power, so how did the smaller end fair? Magrathea grew 0.6% which is frankly lost in rounding.
So with that head wind I’m really pleased to say that Simwood grew like-for-like revenue by 33.3%. There were no dirty origin surcharges levied on our customers to achieve this, and no CPI-based price increases pushed through to gouge our customers and end-users, and no inflation of our revenue with sex-lines. This was simply an awesome base of customers doing more, and ever more awesome customers seeing the light, delivering winning solutions to the market. I’d like to thank each and every one of you.
Of course, revenue is just a vanity number. What matters is how that shakes down through costs to the bottom line. Costs represent a window on a company’s values, behind the manicured shop-front. While some lived in the shadow of industrial action by their staff, arguably propagating a toxic culture, and others did the bare minimum for people, we invested hugely in Simwood people in 2023. As well as record pay rises, which represent record increases in our largest cost, they enjoyed improved benefits and share ownership which itself yielded a nice dividend in 2024. So our costs must have gone through the roof and the bottom line been decimated? Well.
After numerous adjustments, BT managed a 1% growth in EBITDA, while Gamma turned in 9% and Magrathea managed 5% 1. Bandwidth claims 39% but only after dis-applying Generally Accepted Accounting Practice. How did Simwood do after investing massively in our people?
Our 2023 EBITDA growth was 39% and that’s both audited and sticking to agreed international accounting standards! Furthermore, we know our development expenditure is significantly higher than others as a percentage of turnover, whilst we expense it and others generally capitalise it, so it hits the bottom line. In other words, EBITDA could have been materially (like 8-10%) higher, without making things up.
There are those who would prefer vendors that didn’t make profits but I think a healthy supplier is essential. A healthy supplier can invest for the future and a healthy supplier can ensure continuity of service. How that health comes about matters though and I’m proud we’ve grown organically whilst looking after our people and doing the right thing by our customers. I hope you agree.
PS, for those who like to stalk us on Companies House please remember we are a group of companies and the only relevant accounts are those of Simwood Group PLC.
- This is actually the growth in pretax profit not EBITDA as they file unaudited abbreviated accounts. ↩︎
