Vocus Communications has reported a net loss of $1.46 billion after making heavy write-downs on goodwill for some of its recent acquisitions and abandoned paying a dividend to redirect funds to projects and debt reduction.
Vocus Communications has reported a net loss of $1.46 billion after making heavy write-downs on goodwill for some of its recent acquisitions and abandoned paying a dividend to redirect funds to projects and debt reduction.
Revenue for the year to June 30 more than doubled to $1.82 billion, boosted by the acquisitions of M2 Group, Amcom Telecommunications and Nextgen Group but Vocus said a review of goodwill values on its assets had forced a $1.53 billion non-cash impairment.
"We recognise that this write-off does not reflect well on the prices paid in M&A transactions in recent years," Vocus CEO Geoff Horth said in a statement.
"The write-down also reflects the more competitive business environment, in particular in the Australian and New Zealand consumer markets, that has had the impact of lowering our expectations for future growth rates in the sector."
On Monday, would-be buyers Kohlberg, Kravis & Roberts (KKR), and Affinity Equity Partners withdrew their bids for Vocus, with the company saying today a strategic review, including possible asset sales specific to its Australian business, will be delivered ahead of its annual general meeting on October 24.
Mr Horth said the second half in particular had been a period of transition focusing on the integration of acquisitions, leveraging the infrastructure created through its push to scale.
"The underlying result reflects another strong year of growth for Vocus, however it was not at the level we anticipated at the beginning of the financial year and we are working through a number of projects to address this," he said.
Vocus has forecast FY18 revenue of between $1.9 billion to $2 billion, focusing on NBN market share and east coast consumer broadband growth, with NBN retail service providers Dodo and iPrimus ending the year with 7.3 per cent market share in NBN (ex-satellite) compared with 6.4 per cent at the beginning of the period.
Underlying earnings before interest, tax, depreciation and amortisation is forecast to be between $370 million and $390 million.
The Vocus Board is not offering a final dividend, "in light of the current competing demands" and the observed opportunities for capital investment across the business.
An interim dividend of 6 cents per share fully franked was paid in April 2017.
The board said it does not anticipate paying an FY18 interim dividend.
