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GROWTH: Vocus Group Ltd share price goes nuts on profit result

The Vocus Group Ltd (ASX: VOC) share price jumped 5% today following the release of the group’s half-year profit result.

Here are the key takeaways from the Vocus half-year report:

  • Revenue rose 403% to $888 million
  • Statutory profit rose 95% to $47 million
  • Underlying profit, which excludes a number of one-offs and acquisition costs, rose 235% to $92 million
  • A fully franked half-year dividend of 6 cents per share was declared

Vocus is the owner of telecommunications brands such as Dodo, CallPlus, NextGen, M2, iPrimus, Commander and more. It also has a corporate business and a large and growing infrastructure fibre optic network. It is also pushing into utilities such as power and gas.

Vocus has recently undergone a number of major transactions to form the company that it is today. As a result, the company’s financials are a little muddled. Nonetheless, the company has many levers it can pull to extract costs and grow revenue.

“We are pleased to have continued to demonstrate organic growth across the business despite increasing competition in a number of areas and despite a period of significant corporate activity and integration,” CEO Geoff Horth said. “While there is a large program of integration work to be completed to realise the full benefits of the recent acquisitions, we have a detailed plan and an experienced and passionate team.”

Pleasingly, the company confirmed its full-year underlying operating profit guidance of between $430 million and $450 million.

Should you buy Vocus shares?

In my opinion, the Vocus results appear quite strong. At today’s prices, the company’s shares trade at just 14 times profits and on a dividend yield of around 3% give or take. In my opinion, that’s great value for a company of Vocus’s calibre.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes and encourages your feedback. You can follow him on Twitter @OwenRask.

The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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