As expected, Vocus Group booked a $1.5 billion loss for the year to June 30, compared with a $64 million profit in the previous period after the more than $1.5 billion in asset write-downs across its Australia and New Zealand businesses announced last week.
Shareholders will miss out on the final dividend for 2016-17 and the interim (at least) for 2017-18.
The company said on Wednesday that underlying profits were up 50% to $152.3 million.
Earnings before interest, tax, depreciation and amortisation came in at $366.4 million, on guidance of between $365 million and $375 million.
Much of Vocus’ financial results were released last week after it announced the writedowns and the telco provided its 2017-18 guidance on Monday after private equity giants Kohlberg Kravis Roberts & Co and Affinity Equity Partners walked away from making a bid for the company.
In announcing its result Vocus said it planned to have the Australia Singapore Cable ready to go live by July 2018. The company had originally a September 2018 launch date but last December it brought that forward to next August.
“We’ve been able to achieve the earlier date through condensing the program of works to deliver ahead of schedule, in July 2018,” Vocus Group chief executive Geoff Horth said in the company’s release on Wednesday.
Revenue for the year to June 30 more than doubled to $1.82 billion thanks to the now overly expensive acquisitions of M2 Group, Amcom and Nextgen Networks but Vocus said a review of goodwill values on its assets had forced the previously announced $1.53 billion non-cash impairment.
“We recognise that this write off does not reflect well on the prices paid in MA transactions in recent years,” Vocus CEO Geoff Horth admitted (a bit of an understatement).
“The write-down also reflects the more competitive business environment, in particular in the Australian and New Zealand consumer markets, that has had the impact of lowering our expectations for future growth rates in the sector."
“The underlying result reflects another strong year of growth for Vocus, however it was not at the level we anticipated at the beginning of the financial year and we are working through a number of projects to address this," Mr Horth said.
Vocus has forecast 2017-18 revenue of between $1.9 to $2 billion, focusing on NBN market share and east coast consumer broadband growth.
Underlying earnings before interest, tax, depreciation and amortisations is forecast to be between $370 and $390 million (which triggered Monday’s sell off).
The Vocus Board is not declaring a final dividend, “in light of the current competing demands” and the observed opportunities for capital investment across the business. An interim dividend of six cents per share fully franked was paid in April 2017.
The board said it does not anticipate paying an interim dividend for the current half year to December.
