Vocus delivers hefty dividends

Vocus shareholders will receive dividends totaling 9.5 cents a share as the telco merges with M2.

Vocus has rewarded shareholders as the telecom company delivered its last set of financial results before a $3.75 billion merger with M2 Communications.

Vocus shareholders will receive an interim dividend of 7.6 cents a share, significantly higher than the 1.2 cents paid a year ago, plus a previously announced special dividend of 1.9 cents.

Vocus reported a 7.6 per cent fall in net profit to $24.2 million for the six months ended December 31, hurt by higher expenses.

Still, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) - the company's preferred measure of profitability - rose nearly three fold to $62.25 million.

Underlying earnings were bolstered by a more than two-fold jump in revenue and the acquisition of Amcom, which was completed in July 2015.

Vocus and M2 merged on February 22, creating Australia's fourth biggest telco behind industry giants Telstra, SingTel-owned Optus and TPG.

The all-share deal gave M2 shareholders 1.625 Vocus shares for each security they own.

The merged company consists of the low-cost telcos run by M2, including dodo and iPrimus, and Vocus's data centres and cable networks.

The enlarged company is expected to realise annual cost savings of around $40 million by the end of the 2017/18 financial year. It also expects to book revenue of around $1.8 billion in fiscal 2016, and Ebitda of $370 million.

Source: AAP

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