The Vocus Group Ltd (ASX: VOC) share price fell today after it released a statement to say that media speculation is incorrect, and they are not raising equity.
Vocus is a vertically integrated telecommunications service provider, operating in the Australia and New Zealand markets. Thanks to a merger with M2 Group, it is responsible for numerous retail and business telco brands, such as Primus.
Vocus is Not Raising Equity
In their statement this morning, Vocus said that there was media speculation of an equity raise taking place soon and that it was not correct.
“Vocus refinanced its debt facility in June 2018 and as stated in the Interim Results presentation on 27th February 2019, net debt peaked during H1 FY19 after funding the Australia Singapore Cable. The Board and management remain comfortable with Vocus’ debt position. There is no current intention to raise additional equity,” they said.
Speculation was seemingly started by an article in The Australian newspaper this morning.
At this time, Vocus has a debt-to-equity ratio of only 45% and an interest cover of 3.38x.
Is It a Buy?
Although Vocus shares appear to be on sale today, Vocus is not a company that I’ll be adding to my portfolio. In their most recent earnings report, which you can read about here, they reported very low growth. Revenue only increased by 1%, and EBITDA was down 10% to $168.6 million.
After their merger with M2 group, the company that owned brands such as dodo and iPrimus, it seems the company has struggled with costs and has been unable to grow its NBN market share.
If you’re considering buying shares in Vocus Group, you might also consider Telstra Corporation Ltd (ASX: TLS) or TPG Telecom Ltd (ASX: TPM).
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
Disclaimer: At the time of writing, Max does not own shares in any of the companies mentioned.