voc in 2011 and beyond

Not sure if you saw the Microequities report on VOC....a good read Their assumptions are conservative and I think revenue for YE 2012 is more likely to be $45.5 M ( 40% revenue growth on 2011 ) This equates to an EPS of around 24. The other interesting point I have picked up from the report is the cost of the 1st contract indefeasible rights (2009) of $20M+ over 11.5 is depreciated via straight line. However it is fully paid off after 5 years ! Furthermore with the strong Australian dollar they have locked in the windfall currency gains via hedging. Significance of this is the free cash flow that will be generated in 2014. They are about to sign a 2nd contract as they have/ are nearing capacity on the first pipe.....2nd contract (11.5 years) will paid off in 2016...more free cash flow. This augurs well for VOC to pay fat dividends in future years as they will be splurging cash.

Australia's overseas internet pipe is doubling in 2013 which means Vocus will be able to negotiate better wholesale deals - however their customers will expect better deals as well.