Vocus revenue grows 404 per cent in first half

Telco sees opportunity for growth in enterprise market

Vocus Group revenue grew 404 per cent compared in the six months ending 31 December compared to the same period in the prior year.

The telco reported revenue of $888.2 million for the first half of FY17, and underlying EBITDA of $187.3 million (up 201 per cent on the comparative period). The company report underlying net profit after tax of $91.9 million, up 236 per cent.

The results “tell the story of what has been a significantly transformative 12 months,” Vocus Group CEO Geoff Horth told a half-year results briefing.

During the half the company completed its acquisition of Nextgen Networks — a deal that also included Vocus acquiring the North West Cable System (NWCS) and the Australia Singapore Cable (ASC) development projects.

The ASC was a key strategic consideration in the decision to acquire Nextgen Networks, Vocus has said previously, and the company announced in December last year it had signed a binding agreement with Alcatel Submarine Networks for the cable’s construction.

In the corporate and wholesale market, Vocus attributed revenue growth of 42 per cent to $204.1 million in part to a two-month contribution of $34.3 million from Nextgen and $36.3 million from M2’s wholesale business (Vocus completed the acquisition of M2 in early 2016). The company cited organic growth of 8 per cent from an expanded sales platform.

Horth said there were opportunities for the company to win more enterprise and government business.

“Both Vocus and Nextgen had some limitations about their capacity to compete in that market,” the CEO said. Nextgen owned a significant backhaul network, while Vocus had a significant level of fibre access to buildings (the combined company now has access to more than 5000 buildings) as well as a range of application-layer services for business.

Vocus reported a proforma revenue decline of 6.2 per cent for its Australian mass market business, which the company said was largely the result of the sell-off of the Aggregato US prepaid calling business in the first half of FY16. Removing the revenue Aggregato previously contributed, revenues were largely flat in the segment, Horth said.

Horth said that the group’s performance in the NBN market was “particularly pleasing”.

NBN subscribers grew by 69,680 in the half — a 168 per cent increase on 1H16. Between them, Dodo and iPrimus have 7.3 per cent of the NBN market (excluding satellite), up from 6.2 per cent at the end of 2015.

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