Shares in Vocus Group rose by around 3.6% after CEO Geoff Horth fell on his sword in the wake of the weak interim results.
The decision followed a growing realisation that the company needed needed a fresh start following the market’s poor reaction to the business downgrading guidance for the second time in 12 months.
The burst of strength faded however and the shares ended the session at $2.47, up 1.7%. Mr Horth spent five years as M2 Group chief executive, before becoming boss of the merged group with Vocus in 2016 after the takeover of his former employer.
That was one of a series of deals Vocus did as it went on a $5.8 billion spending spree, only to find that it had overpaid, or misjudged conditions in the markets. The company has written off or down assets valued at close t $2 billion in the past year or so.
Vocus Group chairman Vaughan Bowen said in a statement to the ASX, said Mr Horth had “the wide-reaching respect” and appreciation of the team after its “most challenging chapter”.
This included “wrestling with the simultaneous tasks of integrating several large, complex businesses, combining different corporate cultures and while the Australian telco sector was under substantial structural upheaval, in light of the roll-out of the NBN & the exponential growth in demand for data networks,” he said.
After the company’s interim financial results on February 20, its shares dropped more than 10% thanks to more impairments and a cut to the company’s financial guidance for the year
That saw a cut in the profit forecast for 2017-18 from between $140 million and $150 million to a new, lower range of $125 million to $135 million.
Vocus chief executive of wholesale and international Michael Simmons will fulfil the role of interim group chief executive.
Mr Simmons was formerly the founding chief executive and managing director of SP Telemedia, which is now TPG Telecom.
The board reiterated its full year 2018 guidance and its commitment to the sale of the business’ New Zealand arm, which should be complete by 30 June.
But there’s talk that rather than get a price around $400 million for the NZ business, Vocus might have to settle for something less.
