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Vocus Group Limited Releases Half-Year Results, Share Price…

Tim Montague-Jones

Tim Montague-Jones has over 20 year investment management experience working in the financial markets. Previous experience includes a ten year stint at Morningstar as a Senior Equity Analyst/Portfolio Manager, founding the Morningstar Growth Portfolio and a founding member of their Investment Committee. Tim was also a Senior Equity Analyst for Macquarie Group and a member of the winning team to obtain the 2016 LONSEC Fund Manager of the Year award.

Internet service providers company Vocus Group Limited (ASX: VOC) has released its half-year results to the market today. The business has seen revenue slowdown of 7% on the prior corresponding period due to a weakness in the Retail division. However, underlying EBITDA grew by 2% to $179m – partially due to stringent cost control in overheads.



Vocus Group Limited (ASX: VOC) has released its 1H20 results this morning. The business’s underlying EBITDA grew by 2%, partially due to stringent cost control in overheads. (Credit: Reseller News).


The business has a large amount of debt, which it is slowly paying down from positive cash flows. However, there has not been a substantial change in leverage ratio in the last six months – still approximately 2.8x (net debt/EBITDA). Furthermore, the business had guided cash conversion range of 90% – 95%, and has delivered in the top end of that range (~94%). The Group has provided a full-year EBITDA guidance range of $359-$379m – which is ahead of current consensus expectations.


The Retail arm of the business has been problematic historically as it was a roll-up of many fragmented providers. While this segment is still detracting from EBITDA by 11%, we are seeing improvements in some brands like Dodo. Vocus is an NBN retailer, as customers transition into NBN, VOC had to cut prices to remain competitive. However, this has stabilised. 


Vocus Group continues to implement their turnaround strategy for Retail, which has clearly resonated with investors who have driven the price up 3.6% at market open this morning.

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