TeamTalk profit dips amid network investments

TeamTalk profit dips amid network investments

Wired broadband and digital radio networks dominate TeamTalk's capital investment plans

Credit: Dreamstime

NZX-listed TeamTalk made a profit of $4.4 million for the year ended 30 June, down from $5.1 million in 2017 as it invested in its networks.

EBITDA was up 4.7 per cent to $12.1 million, EBIT increased 5.9 per cent to $7.8 million and net group debt was down 19.1 per cent from $21.9 million to $17.7 million.

TeamTalk CEO Andrew Miller said the result shows that TeamTalk is continuing to deliver to plan.

"Over the last 12 months we have grown EBIT, sold the remaining 30 per cent in Farmside, secured a new banking partnership with BNZ and continued to reduce debt," he said.

TeamTalk is in the early stages of significant investment, including the roll-out of a nationwide digital radio network after a pilot in Canterbury - the first customer will be on the network within the next two weeks and the roll-out completed by June 2019.

TeamTalk said the network will ensure continuity in delivering mission-critical communications and value to both existing and new customers.

The new network will also enable integration with other communications networks as well as offering new services and solutions, enabling TeamTalk to grow its revenues and improve our margins by reaching into the conventional radio market.

Andrew Miller (TeamTalk)Credit: TeamTalk
Andrew Miller (TeamTalk)

“Changes within the Health and Safety legislation along with the findings from the reviews following the Christchurch and Kaikoura earthquakes mean many organisations are now considering diversity across their communications portfolio and mobile radio is critical in providing this service," Miller said.

TeamTalk's wired broadband networks which provide services to a range of wholesale customers and end-users in the Wellington and Auckland CBDs are also being modernised.

The catalyst for that was the closing of the trolley bus infrastructure in Wellington, which forced TeamTalk to shift 32km of its 250km network there underground.

A multi-year agreement with Powerco for the exclusive use of its ducts in Wellington will enable a quicker and more cost-effective solution for going underground.

“The board believes firmly that the investment we are making in our infrastructure over the next two years will deliver significant returns to our shareholders," TeamTalk chair Roger Sowry added.

"As such the board believes that substantial reinvestment of our profits into the business at this time will be of considerable benefit to shareholders rather than a resumption of dividends this financial year."

TeamTalk will provide an update on earnings guidance at the AGM in October.

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