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Here’s why the Vocus Group Ltd share price is trading higher today

The Vocus Group Ltd (ASX: VOC) share price traded higher today after the telecommunications company updated the market with its strategy day presentation.

Vocus Group, the owner of Dodo, Primus, Slingshot and many other telecommunications and utility brands held its Strategy Day presentation and included an updated outlook for its 2017 financial year (FY17).

The 134-page presentation covered the group’s current financial situation, transformation strategy and financial outlook for the remainder of the year. Perhaps most importantly for shareholders was the company’s reconfirmed financial guidance, which includes:

  • FY17 revenue guidance of around $1.8 billion
  • Underlying operating profit of between $365 million and $375 million
  • Underlying net profit guidance of between $160 million and $165 million
  • Capital expenditure of between $180 million and $190 million

The company said that its recent takeovers of Amcom, M2 Group and NextGen have made it more competitive with its peers like Telstra Corporation Ltd (ASX: TLS), TPG Telecom Ltd (ASX: TPM) and Optus.

With large amounts of recurring revenue and deferred sales, the company said it recognises the challenges that lay ahead but is well placed to meet them.

It also pointed to the levers that it has available to strengthen its balance sheet, including cutting dividends and asset sales.

Foolish Takeaway

Vocus shares have been heavily sold down by the market over the past year and the company was last week pitched a takeover proposal from private equity firm KKR at a price of $3.50 per share.

However, today’s presentation and the outlook appears upbeat, perhaps sending a message to shareholders and potential acquirers that Vocus is still a very valuable company with lots of growth potential.

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

The Motley Fool Australia owns shares of Telstra Limited, TPG Telecom Limited, and 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.

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