TeamTalk lifts first-half profit 15.5% to a record

Thursday 23rd February 2012

Junior telecommunications company TeamTalk said first-half net profit rose 15.5 percent for a record half year, after very strong first-quarter results. Second quarter results were more subdued.

“It was almost as if the entire ICT (information and communications technology) sector had downed tools to support the ABs winning the World Cup,” the company said. The general election also contributed to the second-quarter slowdown.

Net profit for the six months ended December 31 rose to $2.7 million from $2.2 million in the same six months of 2010. Sales rose 7.8 percent to $16.9 million but costs rose only 5.3 percent to $10.2 million.

“It certainly wasn't the easiest six months that I've ever experienced. However, it's great to know that when we roll up our sleeves, the results speak for themselves,” said managing director David Ware.

The company's broadband division's revenue rose 11.6 percent and its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by $1.2 million to $4.05 million.

The mobile radio division's $2.6 million EBITDA showed “a modest decline.”

The uncertain global economy could turn without warning, TeamTalk said.

“It also appears that we have a government that will continue to meddle in our industry. In spite of these factors, TeamTalk remains focused on our core strategy of continuing to grow our existing niche telecommunications businesses through a combination of innovation and outstanding service,” it said.

The company is continuing to search for potential acquisitions but nothing is on the immediate horizon, it said.

“Overall, we are anticipating a less volatile but possibly slightly quieter second half of the financial year so your directors can reaffirm their previous guidance for the year – specifically we expect to grow EBITDA by $0.5 million to $1 million, to reduce our net debt and to at least maintain our dividend.”

TeamTalk will pay a fully imputed first-half dividend of 10 cents per share, the same as last year.

TeamTalk shares are steady at $2.30, down from their recent peak at $2.32 but up from as low as $2.18 in October last year.

(BusinessDesk)

BusinessDesk.co.nz

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