Vocus reports 500 percent profit hike - UPDATED

Stuart Corner
Monday, 30 August 2010 15:36

IT Industry - Listed Tech

Recently listed wholesale telecommunications services provider Vocus Communications (ASX: VOC) has reported a 501 percent increase in net profit and 242 percent increase in revenues for the year to 30 June 2010.

NPAT was $5.69m and revenue $17.48m. EBITDA grew 641 percent to $8.15m. The company has no debt and $6m cash in the bank.

CEO, James Spenceley, said: "This strong result is testament to Vocus' wholesale business model which is underpinned by growing demand, long-term contracts and continued focus on customer service."

Vocus provides services to other telcos, ISPs and hosting companies. Spenceley told iTWire: "This result positions us well as a listed company in the telco space. I think, against other listed companies in our sector, looking at our comparable multiples we are rather undervalued.." (Vocus shares were trading at $0.68 today 30 August)

Vocus is not presently covered by any analysts, but that is expected to change shortly. Spenceley said: "We have had a couple of phone calls today from industry analysts who are looking to start coverage on Vocus and we have done a lot of work with Southern Cross Equities. They have a great analyst in Daniel Blair who is becoming very intimate with the Vocus stock."

Spenceley said he believed one the key factors in Vocus' success to be its focus solely on the wholesale market. "We are not distracted by having our own [end user] customers complaining.

He said Vocus had added three or four new customers every month since it started. "We have been getting larger and larger customers. When we started we only got small customers'¦We are continually amazed at the new hosting companies ISPs and telcos that keep starting up."

Spenceley added: "The business is cashflow positive'¦We are looking for complementary acquisitions. There is potential to acquire parts of businesses rather than whole businesses. Vocus is the only wholesale-only provider of any scale. So there is no one that fits exactly into the Vocus mould."

Vocus plans to hold its AGM in late September or early October.