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

 


TeamTalk posts full-year loss on Farmside charge

TeamTalk posts full-year loss on Farmside charge that threatened covenants

By Jonathan Underhill

Aug. 27 (BusinessDesk) - TeamTalk, the listed telecommunications company, posted a full-year loss after writing down goodwill on its Farmside rural unit, a charge that required the cooperation of its lender to avoid a covenant breach.

The loss was $8.3 million in the year ended June 30, from a profit of $3.6 million a year earlier, the Wellington-based company said in a statement. Sales jumped 31 percent to $60.3 million. Excluding the impairment and tax, earnings fell to $3.8 million from $5.4 million as expenses rose.

TeamTalk acquired Farmside Group to extend its rural reach, adding to businesses including its CityLink fibre-optic broadband service. But costs to integrate Farmside eroded earnings in 2013 and in today's announcement the company said it "under-estimated the difficulty in building a strong, experienced management team in what is a very dynamic market" and faced a challenge from the government's rural broadband initiative.

The impairment charge would have triggered a breach of the company's banking covenants as at June 30 but TeamTalk said it kept Westpac Banking Corp informed and the bank agreed not to include the charge in its earnings calculation for compliance. Still, the impairment did mean TeamTalk had to present its $34.6 million bank loan as a current liability.

Across the company's other businesses, mobile radio earnings before interest and tax fell to about $1.5 million from $1.67 million, while broadband Ebit rose to $5.97 million from $5.3 million.

The company will pay a dividend of 7.5 cents, making 17.5 cents for the year. The shares fell 4.1 percent to $1.63 and have dropped 23 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news