VOC - Vocus Group

[VSntchr]

Flying over $3.00 this morning.
No news out for a while but this one is running up hard. Interesting to see if an announcement pops up soon, or if it is simply more people discovering VOC...

 

[zac]

Anyone have any comments on Vocus?
I had an alert set for when it reached under 2.50 and it did today.
In the last 12 mths it has shot up in price but im sceptical of the 2011 EPS and without any 2012/13 forecast figures yet im not sure what to make.

The business model and the field its in is certainly good however.

 

[skip9]

Zac,

Long term outlook on this company is very strong in my opinion. Without going into significant details, Broadband, 4G etc will be expanding enormously in the coming years. With things such as a NBN, iPads, Internet Access on mobile phones etc etc which all contribute to increasing internet traffic then i can only see this company increasing in value and growing.

Have a look at Ciscos forecast study

http://www.cisco.com/en/US/solution...0_ns827_Networking_Solutions_White_Paper.html

I think this does relate to VOC in a big way

 

[VSntchr]

Profit of $8.1m. Better than what I had expected..will be interesting to see what the market does this morning....

 

[YouAgainstMe]

Anyone know why VOC has been down this week?

 

[VSntchr]

VOC had roughly 3m of its NPAT as an FX gain I think..will have a look later today.

None the less, the market is now valuing it at less than half of its peak only a few months ago.

Regardless of what the economy does here or anywhere for that matter...I cant see me using the internet any less....might have to re-read the report and possibly take a dip at todays price..

 

[robusta]

Vocus expands into Singapore

http://www.asx.com.au/asxpdf/20111123/pdf/422qwytnn8ftgw.pdf

The Perth to Singapore cable system caught my eye, it is called - SeaMeWe-3

Anyhow growth from VOC seems to be on target.

http://www.computerworld.com.au/article/408359/vocus_guns_us_cloud_providers/

 

[McLovin]

Got into VOC this week. SP has been pretty weak and I haven't filled right up on VOC yet. With data rates increasing exponentially at 9x earnings this looks like a pretty good buy. Time will tell.

 

[zac]

Got into VOC this week. SP has been pretty weak and I haven't filled right up on VOC yet. With data rates increasing exponentially at 9x earnings this looks like a pretty good buy. Time will tell.

Thats why Im surprised by how much its dropped and especially this week.

 

[McLovin]

Got into VOC this week. SP has been pretty weak so I haven't filled right up on VOC yet. With data rates increasing exponentially and the stock on 9x earnings this looks like a pretty good buy. Time will tell.

I typed that post in a rush, so I adjusted it so it makes a bit more sense!

 

[skc]

VOC had roughly 3m of its NPAT as an FX gain I think..will have a look later today.

Got into VOC this week. SP has been pretty weak and I haven't filled right up on VOC yet. With data rates increasing exponentially at 9x earnings this looks like a pretty good buy. Time will tell.

$3.67m FX income before tax so ~$2.57m after tax. Strip that out and the NPAT ~$7.82m. On an enlarged shares on issue of 61m, that's 12.8cps. So current share price is ~PE 10.4 - a bit higher than 9x but isn't expensive for the growth that VOC can potentially achieve.

A free report here but you do need to register.
http://www.microequities.com.au/admin/reports/VOC26092011.pdf

I do think this chart is interesting.

 

[McLovin]

$3.67m FX income before tax so ~$2.57m after tax. Strip that out and the NPAT ~$7.82m. On an enlarged shares on issue of 61m, that's 12.8cps. So current share price is ~PE 10.4 - a bit higher than 9x but isn't expensive for the growth that VOC can potentially achieve.

True that. Ultimately though, as you say, anything around this PE isn't expensive if they can live up to their potential.

I do think this chart is interesting.

The companies on there (with the exception of AMM and BGL, which I think is overhyped considering what they are offering) are at more mature stages than VOC, wouldn't you say?

 

[McLovin]

Good first half guidance guidance out today. EBITDA and excluding FX gains and losses up 63%, revenue up 57%. No debt.

 

[skc]

Good first half guidance guidance out today. EBITDA and excluding FX gains and losses up 63%, revenue up 57%. No debt.

Last year they had NPAT/EBITDA ~60%, so the guidance extrapolates to a full year EPS ~15c. But with growth like these you think a PE of 14+ wouldn't be unwarranted in the right market.

Bought some at $1.53 today. $1.8 might offer some resistance/consolidation, while $2.2 is the next major level on the chart imo.

 

[McLovin]

Last year they had NPAT/EBITDA ~60%, so the guidance extrapolates to a full year EPS ~15c. But with growth like these you think a PE of 14+ wouldn't be unwarranted in the right market.

The year before NPAT/EBITDA was 45%. IMO, a company like VOC has fairly high fixed costs (relative to their own costs), ie they buy/build/lease the network and then have to sell bandwidth on it. Whether they have 1 customer or 1000 their network costs remain fairly static. It's possible that because they haven't started to earn on their dark fibre network in this half NPAT/EBITDA will be similar (or may have regressed) but as they fill out their capacity marginal cost of delivery should fall.

IMO, anyway.

After last year, 14x earnings seems like the Wonderful World of Oz!

 

[skc]

The year before NPAT/EBITDA was 45%. IMO, a company like VOC has fairly high fixed costs (relative to their own costs), ie they buy/build/lease the network and then have to sell bandwidth on it. Whether they have 1 customer or 1000 their network costs remain fairly static. It's possible that because they haven't started to earn on their dark fibre network in this half NPAT/EBITDA will be similar (or may have regressed) but as they fill out their capacity marginal cost of delivery should fall.

IMO, anyway.

After last year, 14x earnings seems like the Wonderful World of Oz!

I took the full year figures... NPAT = $8.11m, EBITDA = $13.48m. NPAT/EBITDA ~60%.
Agree with the operational leverage for VOC's earning. So I hope the 60% can be replicated and is conservative.

Agree that PE ~14 is pretty rare for a small cap like VOC. So I probably just have to trade the chart and wider market after $2.

 

[McLovin]

I took the full year figures... NPAT = $8.11m, EBITDA = $13.48m. NPAT/EBITDA ~60%.
Agree with the operational leverage for VOC's earning. So I hope the 60% can be replicated and is conservative.

Sorry, I was a bit unclear, I meant the 2010 year was 45%. Hopefully the trend continues up.

 

[skc]

Sorry, I was a bit unclear, I meant the 2010 year was 45%. Hopefully the trend continues up.

Well... the account says NPAT/EBITDA was only 46%. If you use the underlying NPAT it's 52.7%. I don't really fully understand their account entry known as

EPS is ~5.5c so not quite the number I was hoping for... and full year EPS of 15c is definitely not going to happen.

Might still be a decent longer term hold for those with the patience. But a breakeven trade for me just trying to ride the upgrade..

 

[McLovin]

Well... the account says NPAT/EBITDA was only 46%. If you use the underlying NPAT it's 52.7%. I don't really fully understand their account entry known as

Known as...??

EPS is ~5.5c so not quite the number I was hoping for... and full year EPS of 15c is definitely not going to happen.

Might still be a decent longer term hold for those with the patience. But a breakeven trade for me just trying to ride the upgrade..

I agree, 15c looks pretty tough from now. It would be nice if they could reduce their FX exposure at the moment it's running at ~$65k/$0.01 move in the FX rate.

I'm going to stick with it, I think there is a lot of growth left in this company.

 

[skc]

Known as...??

Net foreign exchange gain/loss, note 5 of the accounts. For some resason they report it under revenue rather than separate it out after PBT.