The ASX-listed Vocus (ASX:VOC) board said in a statement on Thursday that, subject to prevailing market conditions, it considers that a “successful IPO of Vocus New Zealand will provide greater balance sheet flexibility to the Vocus Group allowing Vocus Network Services to invest in core long-term strategic fibre opportunities to extend its network reach, build on its product capabilities and cement its position as Australia’s specialist fibre and network solutions provider.”
“It would also provide the Board with the ability to review its long-term dividend policy. Vocus New Zealand is a fully integrated telco and energy provider that owns a significant national fibre infrastructure network.
Vocus said its New Zealand business, led by an experienced and highly capable management team, is an “established challenger that is very strongly positioned within the New Zealand market and has delivered consistent revenue and EBITDA growth over the past five years”.
“Along with the organic growth achieved over the years, Vocus New Zealand has also developed a core competency on the acquisition and integration of businesses that add both customer scale and capability to the existing operation.”
Vocus said its Board considers that there are now significant opportunities for organic growth and market consolidation across all market segments that will be “better realised if Vocus New Zealand is an independent entity”.
Goldman Sachs, Jarden and Craigs have been appointed as Joint Lead Managers for the IPO.
As reported by iTWire in August, the Vocus Group reported total revenue of $1.78 billion for the 2019-20 financial year, a drop of 6% on the 2018-19 period - with net profit for the period declining by 4%, from $105.5 million in 2018-19 to $101.1 million for FY20.
The company also reported that retail revenues fell by 9% year-on-year to $748 million, though revenues for the fibre and network solutions side of the business fell by a much lower 3%, with consumer revenues staying more or less stable for the period.
And the migration to legacy fixed line services had a big effect on the company's small business division, with revenues falling by 27% for the year.