Here's why the Vocus share price just hit a 52-week high

Vocus Group Ltd (ASX: VOC) hit $4 today.

a woman

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The Vocus Group Ltd (ASX: VOC) share price hit a 52-week high of $4 per share today as investors bet its turnaround strategy may pay off in 2019 and beyond.

When reporting its interim results for the six-month period ending December 31 2018 Vocus's CEO flagged a three-year turnaround plan that included a target to double revenue from its enterprise and government dark fibre internet services.

It also reiterated guidance for underlying EBITDA to come in between $350 million to $370 million over fiscal 2019 with capital expenditure expected to be in the region of $160 million to $170 million.

However, this guidance is based on the second half being stronger than the first half in part due to additional revenue from its newly-completed Australia Singapore Cable project.

The one major problem is Vocus's net debt load stood at $1,089 million as at December 31 2018 on a net debt to EBITDA ratio of 3.8x. Therefore its share price may remain volatile over the medium term.

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. 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 Scott Phillips.

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