Public Vocus scores record profits

Fibre wholesaler reports 500 per cent increase in profit before tax

Four months after fibre wholesaler Vocus Communications Limited (ASX:VOC) sold for $20 million to a private equity firm and went public, the company has notched up a consolidated profit before tax of $5.69 million, some 501 per cent increase over the previous financial year’s earnings of under $1 million.

Total revenues totaled $17.48 million, up from $5.1 million during the 2009 financial year, with profits after tax of $3.8 million, up from $837,391.

The company also reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $8.15 million, an increase of 641 per cent.

The audited report reflects revised earnings released by the company in July, which showed a significant increase in revenues for the financial year.

ASX-listed Wentworth Private Equity-managed First Opportunity Fund (ASX:FOF) bought Vocus for $20 million in April, a move chief executive, James Spenceley, said at the time would provide the company with greater visibility. The sale garnered support from ASX brokers, resulting in an oversubscription of the initial prospectus for the company’s shares under the new ticker.

The consolidated group, under the Vocus Communications Limited ticker, comprises Vocus Group, Vocus Pty and Vocus Connect.

In the earnings report to the ASX, Spenceley attributed the consolidated profits to sustained growth of data and voice customers, submarine cable investments, economies of scale in the company’s core infrastructure and continued focus on cost management and efficiency of activities.

Its submarine cable activities saw the company score a deal to provide international capacity to Vodafone New Zealand under an $11.39 million contract.

"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,” Spenceley said in a statement.

"Together with our recent listing and capital raising, it underlines Vocus' ongoing strengths, with plans for further investment in organic growth as well as potential acquisitions.

“Vocus has a very strong cash position with cash reserves of $6 million and no bank debt,” he said.

Former director of Vocus Groups Limited and telecommunications consultant, Paul Brooks resigned from the board of the new consolidated company on 30 June to make way for the incoming First Opportunity Fund directors and to pursue work with the Communications Alliance NBN Project.

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