Mobile services provider amaysim (ASX: AYS) is set to focus on its growing telecommunications business with the sale of energy asset Click Energy for $115m. The divestment comes on the same day the Company has reported substantial growth in mobile subscribers and earnings.

The sale of Click Energy to energy giant AGL (ASX: AGL) will enable amaysim to clear $53m of debt and increase cash reserves by $50m to solely focus on their flexible mobile services going forward.

The divestment, which does not include data or details of amaysim’s mobile customers, comes alongside the Company’s FY20 results which delivered underlying EBITDA of $40.1m, a notable increase on previous guidance of $33m.

“FY20 was a year of solid execution against our strategic pillars. We achieved exceptional growth of the mobile business, improved our brand awareness and energy delivered a strong result amid another year of unprecedented regulatory change,” said amaysim CEO and Founder, Peter O’Connell.

“The increased investment in mobile marketing activity, coupled with our acquisition of Jeenee Mobile and OVO Mobile subscribers, drove significant growth of the mobile base and our steadfast focus on rewarding loyalty, exceptional customer service and retention is delivering outstanding results.”

Unlike other mobile service providers, amaysim has been gradually building its customer base by offering flexible subscription services, without any brick-and-mortar retail stores. With sim cards offered online or in major supermarkets, customers can then transfer existing phone numbers to amaysim within minutes, where solely online data plans are offered at lower cost than major networks due to amaysim’s lower overhead expenses.

Linked to the Optus network, Australian customers still have national coverage with amaysim’s recurring subscribers growing 33% in FY20, with the telco now having more than 830,000 active prepaid mobile plans. Along with 350k pay-as-you-go mobile customers, amaysim reported 23.8% total customer growth in FY20 to 1.18 million.

“Given the challenges faced by our people and the economy in the second half of the financial year, I am delighted to report that we exceeded our underlying EBITDA guidance range and that we were not reliant on any government COVID assistance schemes to deliver this result,” said O’Connell.

Acquired by amaysim in 2017 for $120m,  Click Energy, an energy and gas retailer which owns connection service provider On The Move, has delivered amaysim with $87.8m of underlying EBITDA in just three years and supported the Mobile business.

Its sale to AGL will increase AGL’s customer base by 215,000 and bring their total service coverage to 4.2 million homes and businesses across Australia.

“With AGL’s cost to serve already below that of Click Energy’s, we believe we will be able to unlock further value as these customers share in further benefits from our continuing investment in automation, optimisation and digitisation,” said AGL CEO, Brett Redman.

Through the pandemic, increased data usage has made amaysim mobile plans particularly attractive given their no-lock-in nature, ease of number transfer from other networks, and lower cost.

Focusing purely on their mobile business moving forward, amaysim has commenced a tender for a wholesale network provider given their current Network Services Agreement with Optus expires on 30 June 2022.

Within the ASX telecommunications sector, amaysim has performed exceptionally well through tough trading conditions, with AYS shares trading around $0.40 at the start of 2020.

Following news of their FY20 results and Click Energy divestment, AYS shares opened this morning at $0.72.