Vocus net profit drops 44% to $34 million
Vocus Group's full-year statutory net profit has fallen 44 per cent to $34 million but the Dodo and iPrimus brand owner says it's passed a critical test in meeting its guidance across all key metrics.
"It was critical with our credibility with investors and lenders that we hit our financial guidance," said chief executive Kevin Russell, who joined Vocus in May 2018 to turn around the troubled telco.
At 1120 AEST on Thursday, Vocus shares were up 8.7 per cent to a five-day high of $3.175, still down 1.4 per cent for the year.
Vocus reported revenue of $1.892 billion for the 12 months to June 30, a 0.4 per cent increase from the previous year, as growth in its network services and New Zealand division was offset by declines in its Australian retail operation.
Vocus' revenue from legacy products such as copper broadband and traditional voice telephone fell 38 per cent to $241.6 million.
Vocus chief financial officer Mark Wratten said revenue from legacy products now made such a small share of the company's overall revenue that it was "substantially through the headwinds".
Mr Russell said 2019 was the foundational year of a three-year turnaround for Vocus, which saw two buyout suitors walk away in June after examining its balance sheets.
He said while Vocus' fibre network was a tier one asset, it had failed to adequately integrate networks, systems and cultures from its historical acquisitions, nor invested in partnerships.
"We have great growth opportunity for Vocus but we have a lot to work through," Mr Russell said.
"It's all doable but it takes time."
Vocus said it reduced its debt in the second half and was positioned to reduce it further this year.
It has agreed with its lenders not to pay a dividend until its net leverage ratio is down considerably.
Vocus said a federal government-funded project for an undersea fibre optic cable linking the Solomon Islands, Papua New Guinea and Australia was on track to arrive in Sydney by the end of the month.
The main cable lay is due to be complete in October, which will be followed by testing and configuration.
VOCUS PROFIT DOWN
* Full-year revenue up 0.4pct to $1.892b
* Statutory net profit after tax down 44.4pct to $34m
* No dividend.
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