SLC -10.18%: Shares fell sharply after its quarterly trading update revealed weaker-than-expected wholesale subscriber numbers, despite management forecasting strong earnings growth for FY27.
Key details:
- FY27 underlying EBITDA guidance of $148m–$156m, broadly in line with consensus of $152.3m and representing growth of 21–27%.
- Wholesale subscribers fell by 6,400 in Q1, compared with expectations for an increase of 15,800.
- Consumer customers increased by 19,300 in Q1, while Business added 1,700, below expectations of 2,300.
- FY27 capital expenditure is expected to rise to $58m–$62m, compared with $37.9m in FY26.
The sharp sell-off reflects disappointing wholesale subscriber numbers rather than a deterioration in earnings guidance, which remains broadly in line with expectations. Consumer growth continues to provide support, but the wholesale weakness and rising capital expenditure raise questions around the quality of growth. While management attributes the subscriber decline to seasonality, they need to show signs of a recovery in wholesale momentum. For now, the FY27 earnings outlook remains encouraging, but SLC needs to deliver against it, a tall order.
