Ann: FORECAST: TTK: TeamTalk Revises Down First Half Profit Expectations

• Release Date: 23/01/15 14:52
• Summary: FORECAST: TTK: TeamTalk Revises Down First Half Profit Expectations
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					TTK
23/01/2015 14:52
FORECAST
PRICE SENSITIVE
REL: 1452 HRS TeamTalk Limited

FORECAST: TTK: TeamTalk Revises Down First Half Profit Expectations

Media release
For immediate release

23 January 2015

TeamTalk revises down first half profit expectations

NZX-listed telco, TeamTalk, is revising down its profit expectations for the
first half of the financial year.

"Following a review of draft results for the six months to December 2014 the
TeamTalk board is disappointed to report that profits for the period will be
down on both expectations and the prior period.

It was always going to be a difficult period and that has proven to be the
case.  We have not achieved some of the growth that we expected while a
number of one-off items popped up and bit us on the arse" says TeamTalk
Managing Director David Ware.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the
half-year is expected to be about $6.0m ($7.7m in the same period last year)
and Net Surplus After Tax (NSAT) will be only marginally positive (compared
to $2.2m).  The drop in NSAT includes a number of non-cash items.

Cash generation over the period was also weak, so debt is correspondingly
higher than expected.  We have discussed this with Westpac and given that
TeamTalk's existing facility matures in December we will, as planned,
refinance for a new term prior to June 30.

"Given TeamTalk's overall performance, we have instituted tighter controls on
discretionary spending, reviewed our capex programme and will look to gain
further efficiency from moving a number of functions across the group onto
shared platforms.

We find ourselves in a similar situation to other telcos, as they reorganise
and adapt in an uncertain and changing industry."

Directors have also taken the decision to review the Company's dividend
policy.  In light of these results the directors have announced that it is
their intention to pay a reduced interim dividend of 4.0 cents per share with
the same level expected for the final dividend.

"We have had to carefully balance the factors around financial performance,
including debt reduction and restoring flexibility into our balance sheet,
with those of providing a return to shareholders while at the same time
investing to expand the business offering and delivering service improvements
for our customers.

In summary, we understand what's gone wrong and have a solid strategy to deal
with the issues but nevertheless this is a very disappointing episode for a
company with a proud history and an exciting future" says Mr Ware.

Further information will be provided when the interim results are released to
the market on the 25th of February.

-----------ENDS----------

For more information please contact

David Ware, TeamTalk
0800 101-900
End CA:00260003 For:TTK    Type:FORECAST   Time:2015-01-23 14:52:18