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Vocus boosts first-half revenue by 42 percent

Vocus Communications has delivered solid results for the first half of the 2015 financial year, underpinned by the increase in demand for its data services and product suite, and its acquisition strategy.
Written by Aimee Chanthadavong, Contributor

Vocus Communications has attributed the increasing demand for data services and the take-up of its product suite, coupled with strategic acquisitions, as underpinning the company's growth during the first half of the 2015 financial year.

Vocus Communications has reported that revenue grew 41.6 percent to AU$62.7 million during the half year ended December 31, 2014, from the AU$44.3 million that was reported during the same period the previous year. At the same time, underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) doubled to AU$21.5 million, and underlying net profit after tax (NPAT) increased by 54.3 percent to AU$8.9 million during the half year.

Vocus CEO James Spenceley said the results highlight the market's demand for the company's core products.

"This is another excellent result, which demonstrates the successful execution of the company's strategy," he said.

The company also pointed out that one-off items during the half year, such as its proposed acquisition of Amcom, also impacted the company's results, particularly the statutory after-tax profit, which increased by 412 percent to AU$26.2 million.

Spenceley said the company's proposed acquisition of Amcom Telecommunications will bring about expanded and complementary product sets, and cross-selling opportunities to respective customer bases.

"We are very excited by the proposed Amcom acquisition, and believe the combination of Amcom and Vocus will create a company that is optimally positioned to capitalise on the evolving opportunities in the telecommunications sector," he said.

Vocus said at the end of last year that it would acquire the remaining 90 percent of its former rival company. It is expected that the single entity the two companies will form will have a combined market cap value of over AU$1 billion. Vocus previously took a 10 percent stake in the Perth-based Amcom in October 2014.

The company also noted that during the half year, the revenue from the Southern Cross cable had declined, but this was offset by an increase in traffic growth. On Thursday, the company announced that it is forking out an additional $58.5 million to increase its capacity on the Southern Cross Cable, the undersea cable connecting Australia and New Zealand with the United States.

Further to this, Vocus said additional revenue during the half year was due to its acquisition of FX Networks for AU$107.7 million, which was completed in September 2014.

During the half-year, the company also managed to increase its total number of datacentre facilities to 15. Vocus acquired two additional datacentres from Enterprise Data Corporation, valued at AU$23.5 million, last week. The two datacentres are located in Sydney and Mitcham, Melbourne. This acquisition is expected to result in an annualised EBITDA of AU$4.7 million.

Looking forward, Vocus said the year ahead will be focused on completing and integrating acquired businesses, and driving organic growth using its national sales team and integrated product suite.

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