Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


TeamTalk bemoans subsidy to rivals, cuts annual guidance

TeamTalk bemoans subsidy to rivals, cuts annual earnings guidance on telco levy

Feb. 27 (BusinessDesk) - TeamTalk, which bought the rural telecommunications provider Farmside last year, has cut its annual earnings guidance, blaming the downgrade on the government-imposed levy to pay for servicing unprofitable customers in remote areas.

The Wellington-based company made a net profit of $1.7 million, or 7.2 cents per share, in the six months ended Dec. 31, from $5.4 million, or 23.3 cents, a year earlier. TeamTalk sales slipped 0.8 percent to $16.7 million from a year earlier.

Earnings before interest, tax, depreciation and amortisation were $5.1 million, including a $247,000 contribution from Farmside. TeamTalk now expects annual ebitda to fall short of last year's $8 million, which it previously expected to match. The company's shares fell 1.4 percent to $2.90 in trading today.

The downgrade comes after the company made a provision of $600,000 to cover the cost of the Telecommunications Development Levy - the replacement for old Telecommunications Service Obligation to cover the costs of non-commercially viable customers. TeamTalk now expects to fork out about $500,000 a year to cover the levy.

"The grandiose sounding Telecommunications Development Levy is in fact little more than a tax on the industry in order to subsidise the rural initiatives being undertaken by Vodafone and Chorus," TeamTalk said in a statement.

"We had initially thought that a number of niche services, such as is typically sold by our group, could be exempt from this levy, however it has recently been clarified that this is not the case," it said.

The company will also take a hit to its annual net profit due to one-off costs, including the amortisation of some intangible assets, from the Farmside acquisition.

TeamTalk is upbeat about the second half of the year, and still plans to pay annual dividends of 20 cents per share. The board declared an interim dividend of 10 cents, with a record date of April 19, payable on April 27.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news