Brian Han at Morningstar seems to be stubbornly biased, previously overly optimistic, now overly pessimistic, so its interesting that the head of equities research at Morningstar is now commenting. He has a subtle dig at Brian the end where he talks about reducing debt by a lot more than Brian expects and it boosting the SP above where it is now, which i believe Brian Han has as hold with target of $3.00.
Once analysts got over their butthurt at being wrong for so long (not seeing the fall) we could see upgrades.
"....Morningstar's Brian Han had estimated these operations will contribute around $60 million to group EBITDA in FY18 and a sale could raise upwards of $300 million.
The sale process has stepped up a pace with Vocus making more details public in a teaser document sent to potential buyers. In FY17, the standalone business achieved revenue of NZ$342 million and EBITDA of NZ$60.9 million.
Formal sale documents will be available in December and Vocus is looking for financial close before 30 June 2018. It is suggested Vocus is seeking "well north of $500m" for the New Zealand unit. That is well above Brian's initial $300 million and if achieved would be a meaningful start to debt reduction, while allowing the commitment to the ASC project to be completed by FY19.
Management is also looking for a buyer of the Australian data centre business, which may fetch close to $100 million.
Slashing net debt by $500 million or 80 cents per share should have a meaningful impact on the equity value of the company. The Vocus share price is up 4.7 per cent since 9 November while the S&P/ASX 200 is down 1.3 per cent.
As the self-help strategy unfolds and should divestments deliver proceeds that make meaningful inroads into the company's debt, then a higher share price is likely as lower debt morphs into increasing equity in the enterprise value equation." https://www.morningstar.com.au/stocks/article/The-Powell-manuscript-Vocus-in-focus/163345
VOC Price at posting:
$3.13 Sentiment: Buy Disclosure: Held
