Vox to focus on strategy
Vox Telecom wants to de-list from the JSE to focus on its strategy without the short-term pressures associated with being listed.
The company yesterday issued a statement indicating it had received a R499 million offer from the Lereko Metier Capital Growth Fund and Investec Bank. The deal, at 45c a share, will see the company de-listed from the JSE's Alternative Exchange if it is successful.
CEO Doug Reed says the main reason behind the move is that the company has many businesses in the start-up phase.
Vox's telecoms platform is competing against other private companies and Vox would benefit from not having the short-term pressures of reporting results every six months, says Reed.
Profit growth in the first half of the year to February was hampered by a 29% drop in call termination rates in March last year, which contributed to a revenue decline of 11% and a slight drop in net profit.
However, the company is shifting its least-cost routing (LCR) minutes to its Cristal Vox offering, which runs on its own network. Once Vox has moved its LCR customers over to Cristal, it will have higher margins, which will flow through to improved profitability.
Cristal allows the listed telco to offer a range of voice communication services instead of only competing on outbound calls, which accounts for around a third of all voice traffic in minutes.
Reed says the company will have moved 85% of its subscriber base to its own network by the end of the year, which will bolster margins. He adds the firm has 15 points of presence around SA, and is continuously upgrading and rolling out its network.
Vox may consider joining the bourse again at a later stage, but needs to get over the “in-between” stage while it moves its base to its own network and bolsters profitability, says Reed. He adds the company will focus on growing its network and adding new products to its range.
If the transaction is approved, former Internet Solutions CEO Angus MacRobert will join the newly de-listed company as joint CEO alongside Reed.
The deal is subject to regulatory approval.