M2 Telecommunications Group (ASX:MTU) Delivers Outstanding Full Year 2008 Performance. NPAT Up 114%

Melbourne, Aug 26, 2008 AEST (ABN Newswire) - Diversified telecommunications services provider M2 Telecommunications Group Limited (ASX:MTU) has today reported its financial results for the full year ending 30 June 2008 delivering a record Net Profit After Tax (NPAT) of A$5.2 million, up 114% on full year 2007.

With sales revenue of A$109.2 million, up 149% on the previous year, driven by growth in all business units, M2 has secured the position as Australia's largest network reseller (noninfrastructure owning) telco and as Australia's largest network independent telecommunications wholesaler.

The chart below illustrates M2's performance in each key financial measure for the year to June 30 2008 (shaded column) and the percentage change in each as compared with the preceding year (2006/7);

---------------------------------------M2 Group (MTU)       2007  2008  ChangeRevenue (A$m)        43.8 109.2 Up 149%EBITDA (A$m)         3.8    9.1 Up 137%EBIT (A$m)           3.2    7.9 Up 145%NPAT (A$m)           2.4    5.2 Up 114%EPS (cents)          4.0    6.5 Up 63%Dividend (cents, FF) 3.0    5.0 Up 67%---------------------------------------

The above EBITDA, EBIT, NPAT and EPS results were each impacted by a non-recurring, noncash cost associated with the introduction of M2's Employee Share Plan and Executive Share Option Plan during the period. With this abnormal charge removed, the "normalised" performance for the year further improves, with normalised EBITDA of A$9.7m (up 152% year-on-year), normalised EBIT of A$8.5m (up 163%), normalised NPAT of A$5.7m (up 139%) and normalised EPS of 7.3c (up 83%).

M2's Group Managing Director / CEO, Vaughan Bowen said: "We're delighted to announce this result, which comes after a year of step change within the business in terms of our scale and position within the sector. Having successfully integrated two major acquisitions during the year and added considerably to our existing operations though strong organic growth, the result is testament to the hard-work of every member of our now significantly enlarged team."

Acquisitions during 2007/8

During the year M2 completed two strategic acquisitions, the first occurring in October 2007, when M2 acquired ASX listed Orion Telecommunications Ltd (ASX:OTL), delivering a mature back office operation and adding further scale to M2's established, profitable retail business (M2 Telecom). The Orion acquisition fuelled growth in M2's retail business contributing to a 56% increase in yearon- year revenues, to A$51.9million. In February 2008 M2 acquired Unitel Australia Pty Ltd, the network services arm of Commander Communications Australia. Unitel completed M2's suite of wholesale products, adding local access and fixed line services to its existing mobile voice and data and terrestrial broadband products. M2 Wholesale saw revenues jump a remarkable 440% to A$56.8 million during the period, with Unitel contributing for four months of the period and the remainder of the growth being generated organically.

Strong Cash Flows

For the 7th consecutive year M2's operating cash-flow increased, jumping 102% to A$6.9m for the year to June 30 2008. This continued strong cash generation is testament to M2's commitment to the quality of its customer revenues and stringent credit control.

Record Dividend

The Board has declared a fully franked final dividend of 3 cents per share, taking the full year dividend to a total of 5 cents, an increase of 66% from 2007. This latest dividend is M2's 8th consecutive fully franked dividend, further illustrating M2's consistent ability to generate cash and low capital expenditure demands.

The final dividend will be payable on 31 Oct 2008 based on a record date of 15 Oct 2008. Forecast Continued Earnings Growth in 2008/9 With the rounding out of M2 Wholesale's product suite together with the bolstering of capacity and scale of M2's retail business, the Group is positioned extremely well for further strong growth in 2009 and beyond.

The Directors have issued earnings and revenue guidance for 2008/9 financial year (contained within "MTU Financial Year 2007/8 Results Presentation", released today), forecasting growth of more than 40% at both the top and bottom line.

CEO Vaughan Bowen said of M2's growth prospects: "We continue to win significant new business in both our existing retail business as well as the wholesale market. We have made excellent progress in the implementation of our growth strategy over the last 12 months and have bolstered our management and team to ready us for the next phase of growth. With these solid foundations in place, I am confident of our ability to deliver continuing value for our shareholders in both the short and longer term."

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