Wednesday, 22 August 2018 09:52

Vocus FY18 profits down, company says to focus on growth

Vocus FY18 profits down, company says to focus on growth Pixabay

Telecommunications provider Vocus Group has seen a 16% drop in profit for the financial year 2018, with the company recording $127.1 million compared to $152.3 million for the previous financial year.

Revenue and underlying earnings were in line with the company's guidance, with revenue coming in at $1.89 billion, a tad above the $1.86 billion in the previous year.

Vocus' Commander division, which is focused on small and medium businesses, had a bad year, with revenue falling 15% to $204 million, and the loss of customers "through poor customer service, lack of investment (and a) mismanaged NBN opportunity".

Vocus said in its results presentation that the Commander division was "highly skewed to legacy voice and data products (PSTN, ISDN and ADSL)".

During the year, Vocus was awarded a contract to build a subsea cable linking the Solomon Islands to Sydney, after the Federal Government stepped in to prevent the contract going to Chinese giant Huawei.

The company completed the construction of the 4600km Australia Singapore Cable in June and it is scheduled to be ready for service by mid-September 2018. More than 2.5Tbps of capacity has been sold on the system.

Group managing director and chief executive Kevin Russell said he was pleased that the company had delivered FY18 results in line with the guidance provided in February.

"The result has been achieved during a period of significant internal change and challenging market conditions. I would like to thank the Vocus team for their hard work and continued focus in delivering this outcome," he said.

“Vocus’ primary focus going forward is growth. Our market share is low relative to our fibre and network infrastructure assets. Our priority is to leverage these assets to maximise profitable growth within our core Australian and New Zealand infrastructure focused businesses. Our target is to double revenue from these businesses over the next five years.

“My key immediate priority is building the right team. A number of highly experienced executives are joining Vocus in the coming months who believe in the opportunity and who know how to win in market. Combined with a number of internal changes we have made, this will certainly re-invigorate the company and enable us to deliver the growth we are focused on achieving.

“In June, we closed an upsized bank facility, giving us the financial flexibility to pursue our growth objectives, and removing any requirement to divest assets in order to fund those objectives. Vocus has a new Board, new executive leadership and a new growth strategy to drive sustainable, profitable growth."

The company also announced the appointment of two non-executive directors to its board. Bruce Akhurst and Matthew Hanning will both start on 1 September.

Akhurst is a director at Tabcorp, adstream, and Paul Ramsay and a former Chairman of Foxtel and former director of a number of Telstra subsidiary companies, including CSL and Telstra Clear.

Hanning is the chairman of SAI Global, a non-executive director of Clayton Utz and a senior adviser to Baring Private Equity Asia.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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