'New era': Why this ASX telco share is soaring 22%

The telco expects to realise an $833,000 monthly improvement in its net cash flow.

Key points
  • The Vonex share price is up 22% today 
  • The ASX telco share has completed its MyNetFone Direct Business acquisition 
  • The company now has greater financial flexibility to pursue its growth plans 

The All Ordinaries Index (ASX: XAO) is up 0.3% today, but one ASX telco share is leaving those gains in the dust, up a whopping 22.1%.

And no, it's not Telstra Corporation Ltd (ASX: TLS), which is up 1.3%.

The ASX telco share in question is Vonex Ltd (ASX: VN8).

The microcap company closed yesterday trading for 7.7 cents and is currently trading for 9.4 cents, giving it a market cap just north of $31 million.

So, what's piquing ASX investor interest today?

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today

Image source: Getty Images

ASX telco share soars on cash flow outlook

Investors are bidding up the ASX telco share today after the company reported it had made the final cash payment to Symbio Holdings Ltd (ASX: SYM) to acquire part of its MyNetFone Direct Business.

The final payment sees Vonex complete the full $31 million in consideration payable to Symbio.

The ASX telco share reported this will result in an $833,000 monthly improvement of its net cash flow.

Commenting on the milestone, Vonex CEO Matt Fahey said:

Our completion of the deferred acquisition payments to Symbio Ltd marks the beginning of a new era for Vonex with greater financial flexibility.

We are excited to deliver further growth in the year ahead, fully unencumbered by deferred acquisition payments, as we continue to advance M&A pipeline opportunities which offer the potential to expand Vonex's customer base, geographic presence and product suite.

Vonex listed on the ASX on 13 June 2018.

How has Vonex been performing?

With today's intraday leap factored in, the ASX telco share is down 15% year to date. That compares to a 9% loss posted by the All Ordinaries so far in 2022.

Vonex reported some strong quarterly results on 29 July, which saw shares close 1% higher on the day. Highlights included record quarterly gross unaudited revenue of $10.5 million, which was up 81% from the prior corresponding period.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Symbio Holdings Limited. The Motley Fool Australia has positions in and has recommended Symbio Holdings Limited. 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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