MENU

Devastated: Vocus Group Ltd share price dives 28% on profit downgrade

The Vocus Group Ltd (ASX: VOC) share price is in a mega-bear market, down 28% today and 73% in the past year. A profit downgrade this morning revealed that full year profits will come in some 20% lower than was previously forecast, which sent shares into free-fall:

Vocus Group share price over the past month (source: Google Finance)

Investors weren’t just concerned about lower profits, with the possibility of dividend cuts occurring if management needs extra cash to pay down debt. The company’s debt burden is looking a bit stretched, with net debt rising to 2.6x Group forecast Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). Banking covenants limiting this ratio to 3.5x.

Still, with a price to forecast earnings (P/E) ratio of 9 and rumours of a private equity takeover , smart investors should be running the ruler over Vocus Group.

5 Top Shares For Investors Who Are Anxious About 2017

In 2017, the share market could have its most volatile year ever. That's why one Foolish expert is revealing 5 of his favorite dividend payers now. These "strong and steady" shares promise a healthy stream of income plus capital gains...

But you must act now. This newly updated report is available for a limited time only, and your copy is 100% free. So don't miss out!

Simply click here to receive your free copy of "Our Top 5 ASX Dividend Shares to Earn You Money in 2017" right now.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia owns shares of Vocus Communications Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.