Australian (ASX) Stock Market Forum

VOC - Vocus Group

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The bottom line for me with VOC is I need to be convinced the recent explosion in revenue is going to translate to the bottom line and fund future growth. At the moment they seem to be raising capital with some regularity.

Still thinking....
 
Worst case scenario there is a clause (seems likely imo), and vodafone needs to wait till that expires. In any case it's not bad for VOC, it's just not good in the short term per se.
 
Robusta does it matter how much capital you raise, as long as you can keep up big returns on equity (20%+). If you have a large premium being paid for your shares (say x3 equity) due to the large returns on equity on offer, then it makes sense to raise capital which will actually reduce the gap between equity and market cap cetrus paribus, presuming of course that high return of equity is maintained.

The main bit about VOC is the dark fibre at a less than 5% utilization making big profits and revenues, still plenty of juice in the tank for increased revenues and profits from this area while they continue making cheap acquisitions in the data centre side.
 
ParleVouFrancois said:
Robusta does it matter how much capital you raise, as long as you can keep up big returns on equity (20%+). If you have a large premium being paid for your shares (say x3 equity) due to the large returns on equity on offer, then it makes sense to raise capital which will actually reduce the gap between equity and market cap cetrus paribus, presuming of course that high return of equity is maintained.

The main bit about VOC is the dark fibre at a less than 5% utilization making big profits and revenues, still plenty of juice in the tank for increased revenues and profits from this area while they continue making cheap acquisitions in the data centre side.
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You do make a good point I had not previously looked at capital raising that way in a growth business like this, instead I have focused on the dilution of existing shareholders.

I would still like to see signs of them generating sufficient cash flow to fund growth at a high ROE
 
Must admit to having a bit of trouble getting my head around the results for this business. The investor presentations show massive growth in EBITDA and underlying net profit but when I look at the cash flow it is negative. Ok then they are investing within the business for growth but the cash flow from operations is up but not by enough in my opinion. Am I missing something or is there accounting smoke and mirrors going on here?
 
robusta said:
Must admit to having a bit of trouble getting my head around the results for this business. The investor presentations show massive growth in EBITDA and underlying net profit but when I look at the cash flow it is negative. Ok then they are investing within the business for growth but the cash flow from operations is up but not by enough in my opinion. Am I missing something or is there accounting smoke and mirrors going on here?
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Check out the change in tax paid between the two periods in OCF.
 
McLovin said:
Check out the change in tax paid between the two periods in OCF.
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Ok that looks good when you go to the cash flow buried on page 34 but when you look at the EBITDA on page one and they add back the income tax expense 2011 is a bit more than 2012.

This should be a fantastic growth story I am just trying to work out how much growth is being translated to the bottom line. Must admit I am almost ready to throw it in the too hard basket admid the acquisitions, capital raising, and EBITDA talk muddying the waters.
 
My view is that you only hold this if you believe that they will be an acquisition target - the financials are not exciting and going nowhere over the past few years. However, highly likely to be swallowed so hopefully they get a good price for shareholders!
 
robusta said:
Ok that looks good when you go to the cash flow buried on page 34 but when you look at the EBITDA on page one and they add back the income tax expense 2011 is a bit more than 2012.
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There's a non-cash gain on FX included in last years number but a non-cash loss is included in this year's.

I tend to look through it to the underlying number.

On the surface the numbers do jump around a fair bit, but the underlying trend is pretty clear. The rest is just accounting doing it's thing.
 
Someone has been very excited over the last two days.
Price breaching $2.

I lost a TON on this as an investment a while back (got caught up in the data growth hype), subsequently making back a small amount through a few swing trades.

Not holding at the moment but still have it on one of my watchlists - expecting some news soon!
 
Daily P&F update..

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This one came up in a scan Friday when it broke out from a triangle in the bar chart. I was watching it today - strong market sentiment and a fair bit of buying.

I wasn't tempted as I need to look at its business a bit more closely to see whether it is more than more just data centres and I would also like to see a break out to a 2 year high close.

Cheers
Country Lad

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Country Lad said:
I wasn't tempted as I need to look at its business a bit more closely to see whether it is more than more just data centres and I would also like to see a break out to a 2 year high close.
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I looked and it did, so I did.

I see Bell Potter has a buy recommendation in their daily report today.

Cheers
Country Lad

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McLovin said:
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.
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And I'm out. I'm not really a believer in this, although I'm just as likely to be proven wrong! It seems like there's not much competitive advantage to these telco businesses. Still I bought at $1.40 in December 2011, so I've done almost 85% in 22 months. I can live with that. Better opportunities elsewhere. The accounts have been OK but not spectacular.
 
McLovin said:
I'm not really a believer in this.................
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I am ambivalent myself, so it is really a technical trade. Still in there after nearly being stopped out and it now has one of those patterns I am partial about so we will see if it breaks up.

Cheers
Country Lad

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