Wednesday, 30 November 2016 06:43

Vocus shares plunge by nearly a quarter Featured

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Vocus Communications lost nearly a quarter of its value on Tuesday with shares plunging to $4.35 down from a high of $9.19 in May.

The company saw $874 million wiped off its shares after it shared its first guidance to expected earnings along with its new acquisitions, NextGen Networks, M2 Group and Amcom.

Vocus predicted $1.9 billion of revenue in 2016-17 with underlying earnings before interest, tax, depreciation and amortisation being between $430 million and $450 million.

Underlying net profit after tax was predicted at between $205 million and $215 million.

The revenue figure was in line with analysts' estimates but both expected profit and EBITDA were lower; profit was expected to be $224.4 million and EBITDA $470.3 million.

In the last 18 months, Vocus bought Amcom for $1.2 billion, M2 Group for $3.8 billion and Nextgen for $807 million.

Vocus chief executive Geoff Horth told shareholders at Tuesday's AGM that there would be an increase in second-half earnings.

The plunge in Vocus shares also affected TPG Telecom which lost seven percent of its share value to finish at $7.

Both companies have new competitors in the retail broadband market as the NBN rollout continues.

Competitors include Singapore's MyRepublic from Singapore, Vodafone, amaysim and Foxtel.

Last month, a failed plot to oust Horth led to Vocus shares taking a hit as well.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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