TeamTalk $1.4m Profit for Six Months to December

News Release 9 February 2004

TeamTalk Announces $1.4m Profit for Six Months to December 2003

Leading mobile radio communications company TeamTalk today announced a profit of $1.4 million for the six month period to December 2003. EBITDA was $4.2 million and overall company revenue remained steady at $10 million.

TeamTalk also paid tax on its profit for the first time since the company was founded ten years ago.

“This result is really a coming of age for TeamTalk,” Managing Director David Ware said. “Paying tax on our profits for the first time shows that we have reached an enviable position.”

“We have grown from a small, entrepreneurial and ambitious telecommunications player, to a solid and stable company with strong cashflows and admirable profits; focused on cost-containment and controlled growth.

“If paying tax is a measure of a young company’s success in what is an extremely competitive market, then we’ve succeeded.”

Revenue growth in TeamTalk’s main network was offset by the continued run-off of an equipment finance book that was purchased from Telecom along with its mobile radio assets in 2001.

“We have replaced the equipment finance book we purchased from Telecom with a new finance plan developed by TeamTalk. Thus, as the old book runs off over the next six months, we expect overall revenue growth will be restrained. However, the company is far more comfortable with the terms of the new book, and we expect it to be a good contributor to our company’s growth as time goes on.

Costs also increased following the establishment of an R&D program to develop an alarm monitoring system, which is currently being trialled by major security companies.

“We have received excellent feedback on our alarm monitoring system which is more reliable, secure and cheaper than existing products on the market, and we expect to officially launch the product later in the quarter,” Mr Ware said.

Mobile handsets in the market increased by 1% in the six-month period and disconnections fell by over 20%. Several major new contracts are expected to be signed in the near future which will further increase TeamTalk’s mobile radio revenue.

TeamTalk paid its maiden dividend in October last year following the release of the company’s annual result. TeamTalk’s directors have yet to decide upon the company’s interim dividend policy, and will advise shareholders in due course.

“TeamTalk has now reached the next stage our evolution. We have begun the year on a strong note, and expect to continue to deliver value to our shareholders and further strengthen our position in the New Zealand telecommunications market,” Mr Ware said.

ENDS

About TeamTalk

- TeamTalk is the largest provider of nationwide, linked radio communication services in New Zealand with over 90% market share of the mobile radio market.
- TeamTalk provides high quality voice, data and telemetry services to a variety of New Zealand businesses including emergency services, trucking and transport companies, courier companies, security firms and a variety of vehicle operators.
- TeamTalk’s network is reliable, robust and extremely cost-effective for companies requiring effective telecommunications solutions.
- TeamTalk employs a full-time staff of 39 in five locations throughout the country, operates two nation-wide mobile radio networks and provides local mobile radio services from 155 sites.
- Companies and organisations that depend on TeamTalk to deliver critical services include Fonterra, Fulton Hogan, Eastern Equities Corporation, city and regional councils and the Westpac Rescue Helicopter & Life Flight New Zealand.
- TeamTalk was founded in 1994 by its current Managing Director David Ware. Its shareholders include Active Equities, private investors, management and staff.

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