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VOC - Vocus Group

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So_Cynical said:
Yep but 5.50 was better, may never see that again though, a few days makes such a difference sometimes.
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3 Weeks can make even more difference :) down to 5.24 today, back to where we were in mid 2015 during the Amcom Merger, so the market is basically saying that AMM & MTU are worthless? i know some new shares were issued to fund the mergers but this price level seems a little over done..

FY15 revenue 149m ~ FY16 revenue 830m yet the SP is the same, dude thats crazy.
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So_Cynical said:
3 Weeks can make even more difference :) down to 5.24 today, back to where we are in mid 2015 during the Amcom Merger, so the market is basically saying that AMM & MTU are worthless? i know some new shares were issued to fund the mergers but this price level seems a little over done..

FY15 revenue 149m ~ FY16 revenue 830m yet the SP is the same, dude thats crazy.
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They issued a few more new shares than just "some".

AMM was taken over by issuing ~125m new shares.
MTU was taken over by issuing 300m new shares.
And with NextGen they issued ~60m new shares.

Today's quoted shares on issue = ~620m. Before AMM it would be ~135m. There are probably small issuance along the way (like executive bonus), but going to ignore them for now.

So AMM and MTU are still worth quite a lot...
 
skc said:
They issued a few more new shares than just "some".

Today's quoted shares on issue = ~620m. Before AMM it would be ~135m.

So AMM and MTU are still worth quite a lot...
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Ok thanks, the 2014 Annual report says about 110 million shares on issue..

Shares on issue up 555% pre Amcom, revenues up 885% from same (2014)

Interesting.
 
It seems the market has taken this at face value and assumed, given the EBITDA guidance of $430-450m, that there has been no growth in the business.

Not so sure that's the case... the share of NBN subscribers for the quarter is impressive.

Will take a look at the announcement in more detail.
 
Klogg said:
It seems the market has taken this at face value and assumed, given the EBITDA guidance of $430-450m, that there has been no growth in the business.

Not so sure that's the case... the share of NBN subscribers for the quarter is impressive.

Will take a look at the announcement in more detail.
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It doesn't look that bad to me. Maybe expectations running ahead of reality, but the long view hasn't really changed. I've been sitting on the sidelines waiting for a chance to get in and never thought I'd be able to with a price beginning with 4.:D

Of course I first got in this at $1.40 and then out at $2.20, but we won't mention that. :rolleyes:
 
McLovin said:
It doesn't look that bad to me. Maybe expectations running ahead of reality, but the long view hasn't really changed. I've been sitting on the sidelines waiting for a chance to get in and never thought I'd be able to with a price beginning with 4.:D

Of course I first got in this at $1.40 and then out at $2.20, but we won't mention that. :rolleyes:
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I'm averaging about $5.35ish... but very comfortable with the holding.

There are some minor concerns, for example the NextGen customer cancellations. But it's rare you a compay with this sort of operating leverage and ability to reinvest in itself, at this price.

It's interesting that they released the average margin per user for NBN (34%) and copper (39%). I haven't seen them call it out in previous presentations.
 
Klogg said:
I'm averaging about $5.35ish... but very comfortable with the holding.

There are some minor concerns, for example the NextGen customer cancellations. But it's rare you a compay with this sort of operating leverage and ability to reinvest in itself, at this price.

It's interesting that they released the average margin per user for NBN (34%) and copper (39%). I haven't seen them call it out in previous presentations.
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The margin on NBN is hard to believe, knowing what the fixed wholesale costs are! I guess it shows just how hard they oversell the product, contention ratios must be shocking to achieve that.

I am probably going to strongly regret not taking a position at current prices, but I cant get past my concerns with profitibility in the sector and the very poor business management of some of the businesses they have accumulated.

In the end I would rather stick with my strategy and conviction and miss some opportunities, and I think this whole sector falls into that category for me!
 
In with super fund @ $4.81 ~ hold in all portfolios now, average price of $1.38 in my main portfolio :)

UBS rate VOC as a BUY with a target of $6.80
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So_Cynical said:
In with super fund @ $4.81 ~ hold in all portfolios now, average price of $1.38 in my main portfolio :)

UBS rate VOC as a BUY with a target of $6.80
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SC
It is a great day indeed for VOC buyers.
UBS prediction was before today's trading update.
I am sure all fund managers are first advising their existing clients what to do before correcting their stands in public.
What do you reckon ?

Extract from Motley Fool (much before today's announcement, however) was VOC SELL.
(Joe - I am within copyright provision here so don't flog me with infraction !!)

Foolish Bottom Line

Both Vocus and TPG are high-quality businesses. But the industry is showing signs of maturity. We like the management teams. We think the companies are built to last. We’re parting company regretfully, but we’re doing so because we just don’t think the valuations make sense at the current price. These are companies we’d happily add back to the Share Advisor scorecard should the market become seriously pessimistic. But Mr. Market is offering us a price that we’d be silly to refuse. So, we recommend you Sell both Vocus and TPG.
 
Miner said:
SC
It is a great day indeed for VOC buyers.
UBS prediction was before today's trading update.
I am sure all fund managers are first advising their existing clients what to do before correcting their stands in public.
What do you reckon ?
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UBS BUY is dated today with the heading AGM trading update, tomorrow may be another story - i generally couldn't give a toss about ratings just noticed it when logged into the super account trading page and thought it worth sharing considering the plunging SP.
 
galumay said:
The margin on NBN is hard to believe, knowing what the fixed wholesale costs are! I guess it shows just how hard they oversell the product, contention ratios must be shocking to achieve that.

I am probably going to strongly regret not taking a position at current prices, but I cant get past my concerns with profitibility in the sector and the very poor business management of some of the businesses they have accumulated.

In the end I would rather stick with my strategy and conviction and miss some opportunities, and I think this whole sector falls into that category for me!
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Surprisingly, they're reporting 'improving' customer satisfaction on NBN (see slide about the churn rate).

More surprisingly, the margins on UFI vs Copper (NZ) are virtually the same... ~41% each. ARPU is also 10% higher on UFI vs copper


I must say, I'm a little surprised by the NextGen EBITDA hit.
 
Plumbing the days low now on some intense selling: $4.41. Broker news starting to filter out?

Also, they didn't mention anything on the dividend side...

Make that $4.35
 
FWIW - I just listened to the AGM, and the overall tone from Shareholders during question time was hugely negative.
The three main items, which I considered short-term(ish) were:

- Outage on the Telstra provisioning platform for copper broadband connections. It slowed on-boarding of customers and impacted performance
- NextGen is under-performing relative to what their due diligence showed, $60m actual compared to $90m estimated annualized EBITDA (never mind they bought the entire network for replacement cost). However, a nice to know - it is sitting with 90% of its capacity still available. Huge room for growth.
- Amortization of customer contracts and software worth ~$100m (Somewhat expected?)
 
galumay said:
NVM
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The operating leverage and reinvestment opportunities are attractive to me. Network is very under-utilised, fixed cost base and the demand to sell into. It does assume growth which is not always wise, but the demand definitely exists.

I agree, the accounts are very messy.

EDIT: Edited my quote to match galumay's post lol
 
Klogg said:
The operating leverage and reinvestment opportunities are attractive to me. Network is very under-utilised, fixed cost base and the demand to sell into. It does assume growth which is not always wise, but the demand definitely exists.

I agree, the accounts are very messy.
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Thanks for your thoughts Klogg, I deleted the post because the more I tried to crunch the combination of last years reported results and the figures from the update, the less confidence I had in them being in any way meaningful!

Now I am stepping back and taking a really big picture view and it just seems a lot would have to go horribly wrong for the underlying value of this company to be truly represented by a price sub $4.50.

So in summary I am swing back to a view of taking a position at the current price!
 
galumay said:
Thanks for your thoughts Klogg, I deleted the post because the more I tried to crunch the combination of last years reported results and the figures from the update, the less confidence I had in them being in any way meaningful!

Now I am stepping back and taking a really big picture view and it just seems a lot would have to go horribly wrong for the underlying value of this company to be truly represented by a price sub $4.50.

So in summary I am swing back to a view of taking a position at the current price!
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Remember in last year's reports that:
- M2 came into play in Feb
- Amcom merger was still in the process of settling down
- Nextgen networks wasn't in the picture

Makes it very messy
 
So_Cynical said:
UBS BUY is dated today with the heading AGM trading update, tomorrow may be another story - i generally couldn't give a toss about ratings just noticed it when logged into the super account trading page and thought it worth sharing considering the plunging SP.
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Thanks SC for the time line of UBS post. I sold out VOC from my super fortunately at a good margin few months back.
Did some gamble to buy VOC today to trade . But if the price comes to $4 tomorrow I will be in deep xxxx :banghead:
 
Maybe Vocus will become a good turnaround story in the next 12 months...time will tell though....


Last updated 29/11/2016.

We retain a high conviction view that the business will meet our Star Growth Stock criteria in the coming twelve months, although we have slightly reduced our forecasts in the current year to reflect its most recent update.

We have also updated our future year forecasts as the business has provided guidance for the merged entity for the first time, giving an insight into the dynamics and economics of the merged entity.

We continue to cover VOC as a Borderline Star Growth Stock with an adjusted Lincoln Valuation of $9.36.

We reiterate the attractive opportunity presented by its current price volatility, as the company navigates a period of negative sentiment against it, in spite of guiding for a sound set of fundamentals.

14 day free membership... www.lincolnindicators.com.au
 
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