TeamTalk boosts profit 38%, outlook hinges on broadband decisions

Thursday 18th February 2010

The outlook for TeamTalk depends greatly on the how the government distributes funds to roll-out an ultra-fast broadband (UFB) network. The company posted a 38% gain in first-half profit today, to $1.98 million.

“The group’s performance will largely be influenced by two external factors – namely the outcome of the government’s broadband initiatives and the overall economic environment,” said chairman Jon Pope and managing director David Ware in the company’s interim report.

“While a lot of focus has been on the government’s UFB process, another key policy ... is the government’s rural broadband strategy.”

The net profit of $1.98 million equated to earnings of 9 cents a share, in the six months ended Dec. 31 from $1.44 million, or 7 cps, a year earlier.

The bulk of the improvement came from a $464,000 fall in interest costs and a $281,000 gain in interest rate swaps.

Earnings from operating activities declined 14% to $3.33 million. "Current difficult economic conditions do mean that our earnings trajectory is lower than anticipated," the company said.

TeamTalk aims to grow its earnings before interest, taxation, depreciation, and amortisation by $3.2 million over the next three year.

The directors declared a fully imputed dividend of 10 cents a share payable on April 16. The shares gained 4.4% to $2.35 in trading today.

Businesswire.co.nz

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