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

 

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO: