Vocus Group Ltd

VOC Details
 
Changes in Board: Vocus Group Ltd (ASX: VOC) is tracking well with regards to its Australia Singapore Cable that is said to get ready for service in 1Q FY19 based on a long-term investment. The group has announced the joining of Mr John Ho as the Non-Executive Director, effective from January 08, 2018. With this news, VOC stock surged up 3.8% on January 08, 2018. VOC based on the 1Q FY18 trading update, has reconfirmed its FY18 guidance, targeting EBITDA of between $370m and $390m. For FY18, revenue is expected to be in the range of $1.9-2.0bn and the underlying NPAT is expected to range between $140-150m. The capex for FY18 is expected to be US$42m and net debt as at June 2018 is expected to be between $1.03-1.06bn. Moreover, Vocus New Zealand (VNZ) business is prepared for sale and the company is targeting sale completion by end of FY18. VOC has also progressed its review of the non-core Australian assets with regards to potential divestment or closure. The net cash proceeds from proposed divestments will materially reduce the company’s debt levels and leverage ratio, and provide strategic optionality.
 

FY18 Guidance (Source: Company reports)
 
Meanwhile, VOC stock has risen 30.29% in last three months as on January 05, 2018. The group is making efforts to have full potential by FY20 with ten major technology projects already in progress. While the stock has been recovering post an unnerving period of failing acquisitions’ integration, earnings downgrade and write-off in goodwill (leading to stock price dip of 7.1% in last six months), we give a “Hold” recommendation on the stock at the current price of $3.26


VOC Daily Chart (Source: Thomson Reuters)
 

TPG Telecom Ltd

TPM Details
 
Launched new nbn50 plan: TPG Telecom Ltd (ASX: TPM) is moving well towards achieving its FY18 guidance on underlying EBITDA of $800-$815m with Singapore project to attain service coverage in December 2018. The recent NBN changes to its wholesale pricing, effective 2Q CY18 are also expected to benefit telco players including TPM. The group lately launched its new nbn50 plan as part of its recent nbn product revamp. The new nbn50 plan includes unlimited data and is configured on a higher speed tier that has a wholesale nbn access speed of 50Mbps. The nbn50 speed tier has a typical evening speed of 36Mbps, as compared to a typical evening speed of 21.3Mbps achieved on the nbn25 speed tier. Further, in the nbn100 speed tier, TPM has also launched an unlimited data plan for $89.99 per month, that is priced $10 lower than its least expensive nbn100 unlimited data plan previously offered. The company has also recently added an optional call pack to all current TPG NBN plans without any included calls, namely, the Oz Talk add-on which adds unlimited calls to standard local, national and mobile numbers in Australia (excluding 13/1300 numbers) for just an additional $10 per month. Additionally, the City of Adelaide has partnered with TPM to deliver Australia's first 10 Gigabit fibre-optic data network. The new partner Ten Gigabit Adelaide will enable businesses and organisations to connect to a dedicated fibre optic network, and will provide access to a range of cloud-based services and up to 10Gbps data speeds that are virtually unachievable with traditional internet services. Further, this network will begin to be progressively rolled out from early 2018 and will bring a wide range of new possibilities for businesses and organisations without being inhibited by the restrictions and congestion often experienced by existing internet services. Meanwhile, TPM stock has risen 37.35% in last three months as on January 5, 2018 after falling about 4.8% in last one year, and is trading at a reasonable P/E ratio. We give a “Buy” recommendation on the stock at the current price of $6.76


TPM Daily Chart (Source: Thomson Reuters)

 
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