FIRST CUT: Spark annual profit falls 7.9% as Quantum costs kick in
By Paul McBeth
Aug. 22 (BusinessDesk) - Spark New Zealand posted a 7.9 percent decline in annual profit as the country's biggest telecommunications company booked restructuring costs as it chases the mantle of being the lowest cost operator.
Net profit fell to $385 million in the 12 months ended June 30 from $418 million a year earlier, the Auckland-based company said in a statement. That included an additional $49 million of costs in adopting an Agile working structure through the company's Quantum programme. Stripping out those restructuring costs, earnings before interest, tax, depreciation and amortisation rose 2.2 percent to $1.04 billion on a 1 percent gain in revenue to $3.65 billion, in line with Forsyth Barr analyst Matt Henry's forecast.
"We are one of the first large companies in Australasia to make the move to Agile at scale in such a short space of time," managing director Simon Moutter said in a statement. "Our move has attracted a lot of interest from other companies – here and overseas – who are grappling with the same issues of uncertainty and technological and market disruption."
The board declared a final dividend of 12.5 cents per share, made up of an 11 cent ordinary dividend and a 1.5 cent special dividend. The dividend will be paid on Oct. 5 with a record date of Sept. 21, and takes the annual return to 25 cents.
Spark gave guidance for ebitda of $1.03 billion to $1.06 billion in the 2019 financial year on revenue of between $3.6 billion and $3.67 billion. It expects to maintain its annual dividend at 25 cents.
"In the coming year, we are focussed on capturing the advantages the Agile way of working will deliver for us: highly engaged and productive people; a total focus on what matters for customers; and the ability to deliver new products and services – and improve existing ones - faster than ever before," Moutter said.
The shares last traded at $3.98 and have gained 10 percent so far this year, outpacing an 8.6 percent gain on the S&P/NZX 50 index over the same period.