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TeamTalk chief Andrew Miller backs reinvestment

TeamTalk chief Andrew Miller backs reinvestment to generate sustainable dividends

By Paul McBeth

Oct. 25 (BusinessDesk) - TeamTalk chief executive Andrew Miller would prefer to see the telecommunications firm's earnings poured back into the business to build sustainable returns to shareholders.

The Wellington-based company's board is targeting a resumption of dividend payments at the end of this financial year, having returned to profit in 2017 and shedding a third of its debt after selling control of its Farmside rural broadband service to Vodafone New Zealand. Chair Roger Sowry today affirmed TeamTalk is on track to resume dividend payments and the dividend reinvestment plan at the end of the 2018 financial year at the company's annual meeting in Wellington.

However, CEO Miller played up the need to reinvest in the firm's infrastructure in his address to shareholders.

"It is not my role to discuss the dividend, but it is my role to advise on the ability of the business to execute successfully its plan and I believe that to achieve a sustainable return to shareholders we must reinvest in our infrastructure," Miller said in speech notes published on the stock exchange. "I have spoken to many shareholders in the past 12 months and I thank you all for the support you have provided in saying you believe that we must reduce our debt and reinvest in our infrastructure so that our dividend is sustainable."

TeamTalk is projecting profit of between $4.1 million and $5.6 million in the year ending June 30, 2018 with net debt to drop by another 8-to-12 percent.

Miller, who was hired to turn the company around, told shareholders TeamTalk is in a tender process with Hytera, Motorola and Tait for a new national digital radio network, and that it's also in talks with a number of different parties to boost profitability.

"Some of these potential initiatives may well require a small amount of investment and which will place further demand on our capital plans," Miller said, reiterating that the firm's debt is still too high.

The shares rose 4 percent to 78 cents, having jumped 74 percent so far this year.


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