Vocus will miss its revenue target by $100 million

By on
Vocus will miss its revenue target by $100 million

Blames accounting review and enterprise numbers drop.

Vocus has warned its projected full year 2017 revenue will come in $100 million lower than forecast due in part to a dip in wholesale and enterprise sales and the late realisation of contract fees.

The telco said in a presentation to the Macquarie conference that FY17 revenue would come in at around $1.8 billion rather than $1.9 billion.

Of the downgrade, about $40 million will be booked later than expected following an "accounting review". Vocus said it now expected to receive about $45 million spread over FY17 and FY18.

Another $20 million in projected revenue was sunk with the divestment of a majority stake in prepaid calling card provider Aggregato Australia and the Cisco HCS voice platform.

The Aggregato stake was bought by M2 in 2015 in a move described at the time as "puzzling" by leading telecommunications analyst Paul Budde. Vocus and M2 merged later that year.

Vocus sold its cloud collaboration practice, which included a reseller agreement for Cisco's UC collaboration stack, to global comms and network infrastructure services West Corporation in March this year.

The telco also said it expected lower billings in its enterprise and wholesale division.

The division has around 550 customers and offers products such as data centre space and telecommunications services like business Ethernet and transit.

While revenue in most parts of enterprise and wholesale grew in the first half of 2017, it was slightly off compared to the previous corresponding period in data centre, which represents 47 percent of all revenue taken by the division.

Vocus indicated in its presentation it was attempting to "broaden [its] product offering" in the Australian enterprise and wholesale division, "reflective of the maturity of the business and the limited product penetration with existing corporate customers".

Vocus will host a call with all its investors on Wednesday morning to outline the revenue downgrade.

The revenue downgrade will have a flow-on effect on the company's anticipated FY17 earnings before interest, tax, depreciation and amortisation (EBITDA).

The company now expects an EBITDA in the range of $365-375 million, down from $430-450 million.

However, the EBITDA number is also affected by other variables, including the performance of its energy market products, as well as by higher-than-expected IT expenses.

Copyright © iTnews.com.au . All rights reserved.
Tags:

Most Read Articles

Log In

Username:
Password:
|  Forgot your password?