Zintel Group looks to list on main NZX board

Tuesday 24th August 2010

Zintel Group, a provider of telecommunications tools on both sides of the Tasman Sea, said it is considering a move to the main NZX board from the NZAX small cap and start-ups board to lift liquidity and boost its profile.

"We now have considerably increased size of business in terms of headcount and revenue, and we anticipate reducing expenses over time through operational efficiency and lower overheads, resulting in increasing profitability in this and coming years," chairman Nick Gordon told shareholders at their annual meeting.

A move to the NZX board should improve exposure and share liquidity and require the appointment of at least one additional director he said. The company's shares have fallen 14% in value over the past six months and currently stand at 30 cents.

Zintel established a new subsidiary, Zintel Payments, to distribute the Hypercom payment terminals for EFTPOS and credit card in retail sales in the past year. The company expects to capture a sizeable share of 57,000 terminals in retail stores that must be replaced by June next year to meet compulsory banking security requirements.

The acquisition of Cogent Communications in October 2009 took New Zealand staff numbers to 230 from 130 people, and the new Zintel Cogent's 14 branch offices are working to ensure its customers retain their business telephone systems while the company cross-sells other services such as tolls, audio conference facilities and in the future mobile voice and data.

Zintel's third growth initiative is the announcement of a mobile virtual network operator with Telecom which gives it the ability to offer its customers3G mobile cellular on its own rate plans and billing platform.

"We are about to commence a soft product launch, which in the next 12 months is expected to be a loss making investment, but over time will provide top line revenue growth, recurring income and a deeper relationship with existing customers," Gordon said.

The company's integration, stabilisation and growth strategy includes options to make a further acquisition should the right opportunity arise he said. No dividend was paid for the March year, and tough and highly competitive trading conditions in New Zealand and Australia mean it is too early to provide any kind of accurate profit forecast Gordon said.

The Auckland-based company posted an 88% drop in profit in its latest year as it made acquisitions and took restructuring costs.

Businesswire.co.nz

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