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Vocus NZ sales, earnings soar on CallPlus acquisition

Tuesday 23rd August 2016

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Vocus Communications more than doubled annual revenue and earnings in New Zealand, bolstered by the addition of CallPlus when the trans-Tasman telecommunications group merged with M2 Group. 

The Sydney-based company's New Zealand operations generated earnings before interest, tax, depreciation and amortisation of A$25.2 million in the year ended June 30 on revenue of A$145.5 million, it said in a statement. That compares to ebitda of A$9.4 million on sales of A$50.7 million a year earlier, prior to the M2 deal which added the CallPlus, 2talk, Orcon, Slingshot and Flip businesses to the local fibre line provider previously called FX Networks. 

The bulk of the increase in revenue came from the additional A$82.6 million of sales from the M2 business, with the existing Vocus business lifting revenue a more modest 16 percent. 

Vocus's New Zealand segment assets were valued at A$908 million as at June 30, of which A$650.8 million was goodwill, compared to A$154.1 million a year earlier. 

"Our New Zealand business also demonstrated strong organic growth with M2 creating a vertically integrated business that is well positioned to take advantage of the rollout of the national UFB (ultrafast broadband) network," chief executive Geoff Horth said. 

The CallPlus brands added a net 14,000 broadband customers in the year, with 192,000 connections at the balance date. Of that, 27,000 were UFB connections, up from 21,000 a year earlier. Its average revenue per user was NZ$70 a month in 2016. 

ASX-listed Vocus has expanded its footprint across Australasia in recent years with a series of mergers and acquisitions including a A$3.8 billion deal with M2 and a A$1.2 billion tie-up with Amcom Communications. More recently it's announced plans to buy Australian fibre network operator Nextgen and the North West Cable System development for A$807 million. 

The group posted a profit of A$64.1 million on revenue of A$830.8 million. Excluding one-off costs from the acquisitions and integrating those assets, underlying earnings soared to A$101.7 million from A$18.1 million matching the 455 percent jump in revenue. 

Vocus declared a fully franked final dividend of 8 Australian cents per share, payable on Oct. 4. That takes the annual payment of ordinary dividends to 15.6 cents, up from 3.2 cents in 2015. 

The ASX-listed shares last traded at A$8.34, and have climbed 12 percent so far this year.

BusinessDesk.co.nz



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