Vocus in focus after first half result
Stock
Vocus (ASX: VOC) $3.70 as at 26/02/2019
Event
Telecommunications company Vocus has rallied today on the back of a solid performance for the 1st half. 6 months into the year the company looks to be on the right track as it progresses with its turnaround.
Revenue might have added 0.7% to $974.2, EBITDA for the half fell 10% on the first half of FY18. Net profit came in at $48.8m, almost a 30% slide on the corresponding period last year. So why has Vocus rallied ~7% on the back of such a big fall? At the full year, consensus is looking for a profit of around $107m and at the half way point, VOC is almost halfway there and the company often has a big second half skew to earnings. Vocus is also a big turnaround story with new management taking the reins not too long ago. At this juncture, the company has been able to reiterate guidance at EBITDA of $350m-$370m for FY19 – in line with consensus.
Vocus’s product is solid and it is able to differentiate itself from NBN based names as it has its own network that is often much more reliable. Key to the upside here is the ability for the company to penetrate the enterprise business which Telstra currently dominates. Any increase to market share here will see earnings increase significantly.
Still though, it is a longer term play with the company looking to double revenue across each of its businesses over the next 5 years.
Vocus (ASX: VOC) Chart
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