Comms Group Ltd (CCG)

Mar 15, 2022

It is difficult to do your own writeup after you’ve read a good one written by someone else. I’ll lay down just a few thoughts of my own about the company.

CCG is a value-added reseller. The main divisions of the company are Teams calling (more than 50% of the revenue), ISP (internet service provider) and generic IT services to SMEs. Leadership is betting a lot on their Teams calling product which has a potential to benefit greatly from the tailwinds which growing UCaaS industry presents.   

CCG is a turnaround story led by Peter McGrath who has a track record of transforming something small into something big. Peter has been a non-executive director of the company since its listing in 2017 and was appointed as CEO and MD in April 2019. Since then, CCG dialed down non-core operations, made four acquisitions, expanded their offering globally and are about to start seeing the benefits of improved internal processes and synergies.

M&A strategy is a difficult one and most of the times it does not work. In this case, betting on CCG is betting on a jockey who had had success in the past. Today’s global partnership with Vodafone proves the management is capable of landing deals. Delivering on partnership like this and ongoing internal synergies require capital and time though.  Investor sentiment remains negative or neutral at best because of the company’s murky past. We can clearly see that the company is going in the right direction and most likely is a good long-term (2-3 years) investment. However, I think it will take at least a year before the sentiment changes and the full benefits of synergies and new acquisitions are reflected on the financial statements.