Telecom's Moutter aims to stamp his mark early next year

Friday 24th August 2012

Telecom Corp's new chief executive Simon Moutter will lay out his grand plan for the country's biggest listed company early next year after hitting the road to get a sense of what the phone company's stakeholders want.

The former Auckland International Airport boss expects to add his "flavour" to Telecom's business strategy early next year after spending his first two weeks in the top job listening to customers and staff and as he starts to engage with investors, Moutter told a conference call in Auckland.

He's working on an "ambitious strategic plan for the company" to build on its position in a post-Chorus environment and as more customers switch to better technologies, he said. An early initiative he's pushed is making Telecom compete more aggressively in broadband to prevent customers "simply leaving us on price."

The company's retail broadband connections edged up to 599,000 as at June 30 from 591,000 a year earlier, though market share slipped to 50 percent from 53 percent as Telecom's growth lagged behind its rivals.

The conference was Moutter's first official public outing as Telecom's chief after taking on the role last week. He beat out Gen-I boss Chris Quin, who has been acting chief executive, and outgoing retail boss Alan Gourdie for the top job.

Quin led the conference, answering the bulk of analyst questions and presenting the company's first annual result without Chorus. Adjusted net earnings from continuing operations rose to $281 million in the 12 months ended June 30, compared to $88 million a year earlier.

Statutory profit surged 604 percent to $1.12 billion, or 60 cents per share, including the five months Chorus spent under the Telecom umbrella before being spun-off as a standalone entity.

The company took a $257 million charge on its ageing copper lines, which now sit with Chorus, in the 2011 annual result. Earnings before interest, tax, depreciation and amortisation from continuing operations climbed 42 percent to $1.08 billion, even as sales declined 8.6 percent to $4.58 billion.

Analysts were expecting ebitda of $1.1 billion on sales of $4.67 billion. The shares plunged 7.4 percent to a month-low $2.55 in trading today, having climbed 34 percent this year. Telecom said ebitda in the 2013 financial year will be a "flat-to-single-digit-percentage decline" as it invests to keep broadband market share.

BusinessDesk.co.nz

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