The Vocus Group Ltd (ASX: VOC) share price is trading lower on Wednesday following the release of its annual general meeting update.
At the time of writing the telecommunication company's shares are down 0.5% to $3.61.
What did Vocus announce at the meeting?
This morning Vocus released its annual general meeting presentation which included an update on its performance so far in FY 2021.
According to the release, almost four months into the new financial year, management notes that it has started well across all three businesses.
The company's Vocus Network Services business has seen key growth trends across revenue, margin, and EBITDA continue. Furthermore, its pipeline of opportunities is strong, even after winning a key contract with the Australian Tax Office to provide secure national data and internet services. Management notes that this was a competitive flagship customer win, executed well in a new virtual environment.
Across the ditch, the New Zealand business has also had a strong start to the year. The Stuff Fibre acquisition has been fully integrated ahead of plan, and the company is seeing continued organic growth in key segments.
In addition to this, management notes that its New Zealand brands recently dominated their industry awards leading categories. This includes NZ Service Provider of the Year, Best Value Broadband Provider, and Best Fibre Broadband Provider.
Finally, the Retail business is steadily improving, with the Consumer segment on track to return to growth before the end of this financial year. Management advised that cash collections are strong, and it is seeing a good performance in its energy operations as it seeks to bundle energy, broadband, and mobile for retail customers. Earlier this week, its Dodo brand won the award for Best MVNO at the CommsDay Edison Awards. It feels this is another indicator that this business is being positively recognised in market.
Outlook.
Management advised that it is on track to achieve its FY 2021 guidance that was issued with its results in August.
It expects Vocus Network Services to deliver revenue growth of at least 5% in FY 2021, which exceeds the 3% growth in the key Data and IP Networks segment in the prior period.
It also expects Vocus Network Services to deliver underlying EBITDA growth in the 8% to 12% range, which it believes will be a market leading performance in this segment.
For the overall company, management is guiding towards underlying FY 2021 EBITDA in the range of $382 million to $397 million. This excludes a benefit of $22 million from a change in accounting standard AASB16.
In respect to capital expenditure, Vocus is guiding towards $160 million to $180 million, which is down from $200 million in FY 2020.
Lastly, the Vocus Board revealed that it is focused on reducing the financial leverage in the business over the coming 12 months.
