Orcon, previously Vocus NZ, reports surge in profits ahead of float

Orcon, previously Vocus NZ, reports surge in profits ahead of float

Vocus' New Zealand business, Orcon, reports 2021 results ahead of public listing.

Mark Callander (Vocus NZ)

Mark Callander (Vocus NZ)

Credit: Supplied

Newly renamed as Orcon, the company formerly known as Vocus NZ, reported a significant increase in profit for the year ended 30 June overnight.

Now renamed after one of its heritage subsidiary ISP companies, the local business reported revenues up slightly from $402.4 million to $416.8 million. 

However, profit before tax was well up from $21.5 million to $36.3 million as was net profit after tax, from $15.3 million to $25.5 million.

The accounts also note other income from hedging transactions that could be reclassified to profit or loss of $34.9 million. The net profit attributable to shareholders including those sums was, therefore, $60.4 million, up from $18.1 million.

Cash and its equivalents was well down from $22.7 million to $4.9 million.

Vocus, now owned by investors including Australia's Macquarie Infrastructure and its managed funds (MIRA), appointed Goldman Sachs, Jarden and Craigs as lead managers for the listing of its New Zealand business last November.

The initial public offering (IPO) was expected to be undertaken before the end of 2021 on the New Zealand Stock Exchange (NZX). A potential valuation of $598 to $783 million was made by investment bank UBS two weeks ago.

"The board considers that a successful IPO of Vocus New Zealand will provide greater balance sheet flexibility to the Vocus Group allowing Vocus Network Services to invest in core long-term strategic fibre opportunities to extend its network reach, build on its product capabilities and cement its position as Australia’s specialist fibre and network solutions provider," Vocus Group said in its announcement.

Vocus said its NZ business, which included brands such as Slingshot an Orcon, was led by an experienced and highly capable management team, was an established challenger and was very strongly positioned within the New Zealand market.

It had also delivered consistent revenue and pre-tax earnings (EBITDA) growth over the past five years, the company said.

"Along with the organic growth achieved over the years, Vocus New Zealand has also developed a core competency on the acquisition and integration of businesses that add both customer scale and capability to the existing operation."

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