Spark annual profit almost doubles on AAPT sale 22 Aug 2014
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
Spark annual profit almost doubles on AAPT sale, grows mobile revenue
By Paul McBeth
Aug. 22 (BusinessDesk) - Spark New Zealand, the rebranded Telecom Corp, almost doubled annual profit on the sale of its Australian AAPT unit, and grew mobile revenue as it repositions itself away from relying on dwindling landline use.
Net profit rose to $460 million, or 25 cents per share, in the 12 months ended June 30, from $238 million a year earlier, when it booked a series of charges as part of a radical overhaul of its business. Excluding the $137 million gain from the sale of AAPT and restructuring costs in 2013, earnings from continuing operations climbed 20 percent to $323 million. Earnings before interest, tax, depreciation and amortisation gained 7.1 percent to $936 million and revenue slipped 2.6 percent to $3.64 billion, largely in line with a forecast from Forsyth Barr.
"The tough calls we have made to become more competitive and more productive have allowed room, alongside the funds freed by our divestment of AAPT in Australia, for investment in the areas where our customers are telling us they want us to be," chief executive Simon Moutter said. "That means more online and digital customer services, cloud capability, 4G mobile and value-added services, online entertainment and more."
Under Moutter, Spark has overhauled its business to become a data-driven and mobile-focused telecommunications operator and away from its traditional infrastructure business, which it shed when it demerged with Chorus. That's included a name-change from Telecom this month, and the launch of an internet television service, Lightbox.
Spark anticipates low single digit growth in adjusted Ebitda for the 2015 year, even as revenue is forecast to decline by a low single digit. That forecast assumes Chorus's regulated price on the fixed copper line network is in line with the Commerce Commission's disputed decision, and excludes rebranding costs.
The board declared a final dividend of 9 cents per share, up from 8 cents a year earlier, payable on Oct. 10 with a Sept. 26 record date. That takes the total return to shareholders to 17 cents per share, ahead of Forsyth Barr's expectation for a 16 cps annual dividend.
The shares edged up 0.3 percent to $2.91 yesterday, and have climbed 26 percent this year. outpacing the 5.5 percent increase in the NZX All Index, a capital measure of all domestic stocks, over the same period. The stock is rated an average 'hold' based on nine analyst recommendations compiled by Reuters, with a median target price of $2.45.
Spark grew mobile revenue 6 percent to $965 million, increasing its connection numbers 11 percent to 2.01 million. Ebitda slipped 2.1 percent to $685 million, with the company paying higher customer acquisition costs, offsetting increased mobile data revenue and greater smartphone penetration.
Fixed line revenue dropped 5 percent to $1.02 billion, with the number of access lines down 4.2 percent to 933,000, while broadband revenue slipped 2.4 percent to $284 million, even as connections rose 2.9 percent to 648,000.
Across its home, mobile and business segment, Spark's revenue increased 0.7 percent to $1.79 billion, while Ebitda fell 2.1 percent to $685 million.
Spark Digital, formerly its Gen-i unit, reported a 1.5 percent decline in revenue to $1.29 billion and a 0.7 percent fall in Ebitda to $399 million, as customers continued to switch to IP-based, fixed line services and tight competition weighed on mobile revenues.
Spark Connect, which operates the wholesale and international divisions, reported a 12 percent decline in sales to $574 million on declining voice revenue, and a reduction in services sold to Chorus, while narrowing its Ebitda-loss to $110 million from $114 million a year earlier.
The company's operating cash flow fell to $614 million in the year from $885 million a year earlier, and it had a net cash inflow of $94 million in the year, leaving it with cash and equivalents of $208 million as at June 30.
Excluding its $158 million acquisition of radio spectrum for 4G mobile services, capital expenditure rose to $459 million in the year from $421 million in 2013, mainly due to the investment in its 4G mobile network. Spark expects capex of $420 million in 2015.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more