Vocus tumbles 30% after profit warning

Vocus Group shares plunged 30 per cent following the telco’s second profit warning in six months, as management grapple with a raft of problems following its rapid expansion.

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The owner of internet providers dodo and iPrimus blamed the latest downgrade on a range of issues, including revenue delays on major project contracts and lower earnings from its recently launched New Zealand energy retail business.

Lower than forecast billings and higher staff and technology costs were also a factor.

In an announcement after Tuesday’s market close, Vocus warned its annual underlying earnings would fall by as much as 19 per cent, to between $365 million and $375 million.

In November the company downgraded earnings expectation to between $430 million to $450 million.

Underlying profit after tax could drop by as much as 26 per cent to between $160 million and $165 million, compared to its previous forecast of $205 million to $215 million.

Vocus also said annual revenue would be about $1.8 billion, down from its previous estimate of $1.9 billion.

The company has grown rapidly by buying national fibre telecom network Nextgen Networks, and rival M2 Group last year, plus Amcom Telecommunications in 2015.

Morningstar senior equity analyst Brian Han described the trading update as “distressing”, raising serious doubts about the group’s financial controls and systems.

“While steps are being taken to improve in these areas, it is abundantly clear Vocus has bitten off more than it can chew with its recent spate of mergers and acquisitions,” he said.

“Reporting and technology systems are woefully inadequate for what is a major player in the telecom big leagues.”

Financial services firm Patersons Securities said in a research note that Vocus’ $3.75 billion tie-up with M2 has “turned into something of a poison merger”, with Vocus losing more than two-thirds of its value in the past year.

Vocus shares dropped 30 per cent to a three-and-a-half year low of $2.35 during Wednesday’s session, and ended the day 91 cents weaker, or 27 per cent, at $2.44.

That slashed the group’s market value by $565 million to $1.5 billion.

Mongooses hide identity to survive

Killing of pups is common in mongoose social groups, and researchers believe offspring may do best if they hide which adults they are related to.

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Concealing identity reduces the risk of attack by less-related adults, they say.

But it means mothers may not be able to tell pups apart, and therefore cannot pay special attention to their own young.

“In most species we would expect mothers to target care at their own offspring, but mongooses seem unable to do this,” said Dr Emma Vitikainen, of the University of Exeter.

“We think this is because mothers synchronise birth to the same day, and pups may have evolved to conceal their identity.

“In the banded mongoose infanticide is common, and it might be too dangerous for the pups to advertise which adults they are most closely related to, as this could expose them to spiteful behaviour by less-related group members.”

A system of adult “helpers” operates in mongoose groups, with adults often looking after pups that are not their own.

They do not choose which young to care for based on relatedness.

Dr Vitikainen added: “Intriguingly, we also found that female helpers tend to pair up with female pups, and male helpers with male pups.”

The study also found that females become more likely to act as helpers after they have given birth.

Professor Michael Cant, who leads the long-term study of banded mongooses in Uganda, said: “We know that, among adults, individuals can discriminate kin from non-kin when it comes to mating and evicting rivals from the group.

“But for pups that are vulnerable to infanticide, anonymity may be the best strategy for all.”

The study is published in the journal Proceedings of the Royal Society B.

‘A lot at stake’: Turnbull on North Korea threat

Prime Minister Malcolm Turnbull says there is a lot at stake on the threat of North Korea, as he prepares for his first face-to-face meeting with US President Donald Trump to discuss a response to Pyongyang’s missile tests.

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Mr Turnbull is flying to New York for the highly-anticipated meeting on May 4 to discuss Kim Jong-un and the coalition campaigns in Syria, Iraq and Afghanistan.

The Prime Minister and US President will also mark commemorations for the 75th anniversary of the Battle of the Coral Sea.

North Korea has publicly threatened Australia, warning if Canberra continued to follow the US’s moves to “isolate and stifle” the country it would be a “suicidal act of coming within the range of the nuclear strike of the strategic force of North Korea”.

In an exclusive interview with SBS News, Prime Minister Turnbull denounced the “enormous risks” Kim Jong–un’s regime has been unleashing with its “reckless and dangerous” conduct.

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“There is a lot at stake,” the Prime Minister said.

But Mr Turnbull said he wanted to see a diplomatic resolution to the saga.

“All parties should aim to resolve matters diplomatically,” he said.

“The important thing is the dangerous, reckless and threatening conduct of North Korea comes to an end.”

The key player, he suggested, would be China in brokering any potential agreement.

“That is going to require a concerted effort by the nations with the most leverage over North Korea and of course nobody has more leverage than China,” Prime Minister Turnbull said.

“That is why I’ve said and the president has echoed this – the eyes of the world are on Beijing because Beijing has the overwhelming economic relationship over North Korea.”

Turnbull ‘speaks his mind’ to SBS ahead of US meeting with Trump

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China to launch own encyclopaedia to rival Wikipedia

China is under pressure to write its own encyclopaedia so it can guide public thought, according to a statement by the project’s executive editor Yang Muzhi published last month on the website of the Chinese Academy of Sciences.

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He once listed Wikipedia, which is available in China, and Britain’s Encyclopaedia Britannica as potential rivals and said the project aims to exceed them, according to an article he wrote late last year.

The project, which will be under the guidance of the state-owned China Publishing Group, “must have Chinese characteristics,” he wrote, adding it would be a “symbol of the country’s cultural and technological development” and increase its softpower and international influence.

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Unlike Wikipedia – and its Chinese version Baidu Baike – which are written by volunteers and are in a constant state of revision, the new project, which was approved in 2011, will be entirely written by professionals.

So far over 20,000 scholars and academics have been enlisted to compile the project, which aims to have more than 300,000 entries by its 2018 launch.

The new encyclopaedia will be based on a previous printed version, published in book form in 1993. A second edition, which can be accessed through a special terminal, was released in 2009.

The newest version will be released online before being published in a bound edition.

China has over 700 million internet users but a 2015 report by US think tank Freedom House found that the country had the most restrictive online use policies of 65 nations it studied, ranking below Iran and Syria.

It has maintained that its various forms of web censorship – collectively known as “The Great Firewall” – are necessary for protecting its national security.

Sites blocked due to their content or sensitivity, among them Facebook and Twitter, cannot be accessed in China without special software that allows users to bypass the strict controls.

Beijing issued a new restriction for online freedoms, requiring Chinese Internet users to provide their real names when accessing online news sources.

The new restriction will come into effect on June 1.

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WA kids hospital lead not from ‘dead leg’

Brass fittings are the key source of lead leaching at the Perth Children’s Hospital, rather than the “dead leg” in the ring main, the state government says.

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The West Australian government has released a technical report into the ongoing issue, partly disputing the findings of an independent report from the Building Commission last month, which found the most likely source of contamination was both the ring main pipes and the brass fittings.

Treasurer Ben Wyatt said the dead leg water pipe, which was removed as a precautionary measure in September, was unlikely to explain the ongoing lead problem.

“It’s unlikely to have been the dead leg to have been releasing through the sludge into the water prior to it being disconnected,” he told reporters on Wednesday.

Mr Wyatt said there were also elevated levels of lead, zinc and copper in the dead leg, but not in the hospital.

He said the Jacobs Report, developed by the Department of Treasury’s hydraulic engineering adviser, was commissioned specifically for the water issue, while the Building Commission did not have all the information.

The Jacobs Report concluded that leaching from brass fittings within the hospital “potentially exacerbated by dezincification” was the source of elevated lead levels, attributing it to water sitting in the hospital’s pipes for months.

Health Minister Roger Cook said phosphate treatment to reduce lead levels would begin this week.

After the lead contamination is treated and the Chief Health Officer declares the water safe, the full commissioning will begin, which Mr Cook estimated could take up to 14 weeks.

He also insisted there was no risk to the public or staff at the wider Queen Elizabeth Medical Centre precinct.

Contractor John Holland has previously claimed lead came into the hospital from an outside source.