Vocus Looks Like a New Company Starting Out on a Three-Year Turnaround Journey

S. Soh

Summary Bullets:

  • Vocus’ results for the first half of the financial year do not look great. Revenue is stagnating and EBITDA is declining.
  • There is, however, some optimism as the company embarks on its three-year turnaround journey. The company has a new leadership team and its network assets remain a key differentiator.

Vocus has reported its results for the first half of the financial year (H1 FY 2019) and updated investors on the outlook for the company. Revenue for H1 FY 2019 was flat (growth of barely 1% YoY) and underlying EBITDA dropped 10% compared to H1 FY 2018. Consequently, underlying NPAT declined 29% and net leverage ratio increased to 3.1x. Net debt increased $88 million to $1,089 million. The company grew revenue from its New Zealand operations, its enterprise, government and wholesale (the bulk of the growth is from the project revenue associated with the construction of the Coral Sea cable system). However, the growth was offset by the decline in its retail business in Australia; consumer declined 12% and SMB declined 27%. Overall, the financial results are not looking too good for the first half of the financial year. Continue reading “Vocus Looks Like a New Company Starting Out on a Three-Year Turnaround Journey”