Vocus reports loss after ‘year of transition’

David Spence to depart board

Vocus has reported a $1.5 billion loss for the 12-months to 30 June, compared to a $64 million profit for FY16.

However, the telco reported 50 per cent growth in underlying net profit after tax to $152.3 million, on revenue of $1.82 billion.

The year’s results include a full year contribution from M2, which Vocus acquired in February 2016 as well as an eight-month contribution from Nextgen Networks, which Vocus acquired in October 2016.

“The underlying result reflects another strong year of growth for Vocus, however it was not at the level we anticipated at the beginning of the financial year and we are working through a number of projects to address this,” Vocus CEO Geoff Horth said in a statement.

The company reported underlying EBITDA of $366 million, up 70 per cent. In May the company revised its previous guidance of hitting EBITDA of $430-$450 million.

Earlier this month Vocus said that as part of its full year audit process it would recognise a non-cash impairment of $1.53 billion.

 “We recognise that this write off does not reflect well on the prices paid in M&A transactions in recent years and is a reflection in part of the significantly higher earnings multiples the sector has traded on in the relatively recent past,” Horth said.

“The write down also reflects the more competitive business environment, in particular in the Australian and New Zealand consumer markets that has had the impact of lowering our expectations for future growth rates in the sector.”

“Once again the board and senior leadership team have moved rapidly over the last six months to address these issues, improve the performance of the business and restore returns to shareholders,” the CEO said.

As part of its earnings release to the ASX Vocus said that the chair of its board, David Spence, would depart the company. A search for a new chairperson has begun, it said.

The telco revealed on 21 August that discussions with two private equity firms over a possible acquisition of Vocus had ended without a deal.

Vocus said today it expects underlying EBITDA of FY18 to hit between $370 million and $390 million on revenue of between $1.9 billion and $2 billion. It said underlying NPAT for the year is forecast to hit $140-$150 million.

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