Vocus scores $100 million profit

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Vocus scores $100 million profit

Vocus grew its revenue by $681 million, or 455 percent, hitting a total of $830.8 million in the 2016 financial year.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) went up 318 percent to $215.6 million. The underlying net profit after tax (NPAT) was up 461 percent to $101.7 million.

The results come from both organic growth and acquisitions including Amcom Telecommunications in July 2015 and M2 Group in February.

Amcom's teams and sites have been combined, while Amcom L7 Solutions – Vocus' IT services business – was sold to Cirrus Networks. Network optimisation and systems integration are the last steps towards full integration, expected by the end of financial year 2017.

The merger with M2 is on schedule, according to Vocus, with synergy targets at $40 million by the end of financial year 2018.

Vocus chief executive Geoff Horth said: "We continued to increase our operating leverage from our national fibre network, focusing corporate sales on high-yielding metropolitan locations and diversifying our corporate and small business product ranges."

Vocus has doubled its sales team in the financial year just completed and aims to increase it by another 35 percent in the next 12 months to optimise the Nextgen Networks opportunity.

Vocus owns and maintains a national fibre network of 6,800km in Australia, but with the recently announced acquisition of Nextgen Networks, it will expand to 17,000km.

The company attributes the organic growth to both its corporate and consumer divisions.

"Consumer broadband continued to be a strong area of growth with 55,000 net new services added in Australia over the full year contributing to an increase in our NBN market share from 5.1 percent to 6.4 percent," said Horth.

Australia was responsible for 35 percent of the corporate revenue and 48 percent of consumer revenue.

"Our New Zealand business also demonstrated strong organic growth, the merger with M2 creating a vertically integrated business that is well positioned to take advantage of the rollout of the national UFB network," said Horth.

Vocus share price was at $5.69 on 1 July 2015 and was up to $8.60 at 11:27am Tuesday.

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