Orion boosts Vox

Johannesburg, 25 Apr 2008

AltX-listed telecommunications group Vox Telecoms reports triple-digit growth on all major lines for the interim period ended 29 February.

Revenue for the period increased 231% to R861 million, operating profit soared 313% to R67 million, and net profit came in 271% up at R43 million. Earnings per share (EPS) and headline EPS came in 121% higher at 4.7c.

Reduced growth on the EPS line is due to the issue of additional shares to facilitate the purchases of Storm Telecoms and Amvia.

Speaking yesterday, Vox CFO Mike von Holdt said comparing these results to the company's previous interim figures was not representative as the earlier figures included only one month of acquisition, Orion.

Orion, the group's corporate voice division, made up 49% of Vox's profits.

CEO Doug Reed said this division was making significant headway.

"Orion saw 18% organic growth in the period. Its major focus now is integrating the corporate voice business of Storm Telecoms and looking at cross-selling across its customer base."

Vox's corporate ISP business DataPro delivered a 30% growth rate thanks to its "aggressive sales focus", noted Reed.

"46% of the sales made in the past six months was completely new business. We are also expecting to see good contributions from Storm's corporate ISP business; it looks like it is going to be a good buy for us," he commented.

The company's consumer ISP offering @tlantic delivered growth of 148% off strategic acquisitions in the consumer space. The company now has 160 000 subscribers, 194 franchises and 900 resellers.

"The Absa Internet Access integration into @tlantic went off far better than expected. Although we expected some churn, we actually won more customers than we lost to churn. In terms of the @lantic business, we have formed a centralised buying and marketing company to support our franchises and dealers, similar to what you would see with Spar, and we are also progressing on our store refurbishments," revealed Reed.

Vox's new initiative, Vox Telepreneur, has yet to deliver profits but has built a customer base of 1 000 and a dealer presence of 1 600 people.

"This initiative is about harnessing entrepreneurial South Africans to cut telecoms costs and help generate income. We have seen this done in other businesses and are excited at the prospects this could hold. We launched in February, but we are currently building towards a major launch which will target the lower income market as well," he said.

Vox's share price dropped 2% to close at R2.01 per share yesterday. Market watchers point to the company's 5% profit margin as the reason for the decline.

Nevertheless, Von Holdt says its prospects are good, with the R2 billion revenue mark in the cross hairs for its full year results.