Ann: FLLYR: TTK: TeamTalk Posts Another Record Re

• Release Date: 28/08/12 14:47
• Summary: FLLYR: TTK: TeamTalk Posts Another Record Result - Net Profit up 15.9%
• Price Sensitive: No
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TTK
28/08/2012 12:47
FLLYR

REL: 1247 HRS TeamTalk Limited

FLLYR: TTK: TeamTalk Posts Another Record Result - Net Profit up 15.9%

Name of Listed Issuer: TeamTalk Limited

Reporting Period: 12 months to 30 June 2012

The financial statements attached to this report have been audited by KPMG
and are not subject to any qualifications.  A copy of the audit report is
included in the attachment to this notice.

The financial statements have been prepared in accordance with generally
accepted accounting practice in New Zealand. They comply with NZ IFRS, which
constitutes NZ GAAP, and give a true and fair view of the Group's results.

CONSOLIDATED OPERATING STATEMENT
Current Full Year NZ$'000; Up/Down %; Previous Corresponding Full Year
NZ$'000

OPERATING REVENUE:
Total Operating Revenue:

32,437; Up 1.9%; 31,827

OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX:

7,511; Up 11.7%; 6,727

Unusual items for separate disclosure:
0;0;0

OPERATING SURPLUS BEFORE TAX:
7,511; Up 11.7%; 6,727

Less tax on operating profit:
2,112; Up 2.0%; 2,070

NET SURPLUS AFTER TAX AND EXTRAORDINARY ITEMS:
5,399; Up 15.9%; 4,657

NET SURPLUS (DEFICIT) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS:
(6); Down 95.9%; (147)

NET SURPLUS ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER:
5,405, Up 12.5%; 4,804

Basic earnings per share:
23.28 cps; Up 8.4%; 21.47 cps

Diluted earnings per share:
23.28 cps; Up 8.6%; 21.44 cps

Net Tangible Assets per share:
48.56 cps; Up 13.4%; 42.82 cps

Final Dividend:

10.0 cps, 0%, 10.0 cps
Record Date: 5 October 2012
Payable Date: 12 October 2012
Imputation tax credit on latest dividend: 3.8889 cps

A supplementary dividend of 1.7647 cps will be payable on 12 October 2012 to
shareholders who are not resident in New Zealand.

The company's Dividend Reinvestment Plan (DRP) will be in operation in
respect of the final dividend. The last date for the receipt by the Share
Register of an election notice for participation in the DRP is 5pm on 5
October 2012.

From The Chairman and Managing Director:

TeamTalk Posts Another Record Result

2011/12: Group profit up 15.9%, debt down $2.3 million and a fully imputed
dividend of 20c per share.  A top result in a difficult environment - job
well done.

Operating Performance
Group EBITDA was up by $0.65m (5.2%) while Group Net Surplus after Tax
increased by a more than respectable $0.74m or 15.9% to another record profit
of $5.40 million.

The following table summarises our result:

FY12 ($'000) Radio Broadband Group
Revenue & Other Income 17,743 15,227 32,970
Total Costs excluding Depreciation (12,682) (7,146) (19,828)
EBITDA 5,061 8,081 13,142
Depreciation (2,404) (2,145) (4,549)
EBIT 2,657 5,936 8,593
Net Interest Expense   (1,082)
Pre-tax Profit  7,511
Tax   (2,112)
Group Profit for the Period   5,399
Non-controlling interests   6
Net Surplus attributable to shareholders of the Company   5,405

The Broadband segment was the star performer with EBITDA up 18.8% to over $8
million.  This now represents 61% of the Group EBITDA and shows how the group
continues its transition into a broadband focused business.  This segment
comprises CityLink and Araneo who both target business customers with high
end, specialized broadband services with the former focused on its Wellington
and Auckland CBD networks while Araneo is increasingly looking to the
provincial areas for its growth.

Both companies within the segment had improved results on the previous year
and while there were many highlights for the year two that spring to mind
were CityLink's very successful launch of the CBDfree wi-fi product in
Wellington and Araneo's successful tender in the Government's Remote Schools
Broadband Initiative.  While neither had a material impact on the financial
results for the year just gone they are both good examples of initiative and
enterprise as the Group attempts to 'stay ahead of the pack' by developing
new market niches.

We wrote a year ago how the decline in mobile radio revenue appeared to be
slowing so it was particularly pleasing that its revenue grew slightly in
FY12, after a $0.4m decline in the previous year, with a good contribution
coming from services provided to RWC2011 in support of the fantastic
tournament we all enjoyed last year.  Unfortunately costs, in particular
those from third parties who provide services for our network, were harder to
control so overall there was a drop in EBITDA in the Mobile Radio division.

Every year we write about the strength of the company in generating cashflows
and FY12 was no exception.  With the strong result detailed above the group
was able to invest over $4 million in capital expenditure for the future, pay
$4.6 million in dividends and still reduce debt by $2.3 million over the
period.  At year end debt stood at $16.0 million or only 1.2x EBITDA compared
with $18.3 million or 1.5x EBITDA a year ago.  These very solid balance sheet
footings position the company well and give us plenty of financial
flexibility in pursuing our strategies over the coming year.

An industry in transformation
When the Government kicked in $1.3 billion and encouraged the largest company
in the industry to split in two it was inevitable that things were going to
change.  This was followed by a Government demand that the industry
contribute a further $300 million to assist two of the largest companies
expand their rural business.  No surprises then that we expect even more
change.

Less well publicised, but equally significant, is the fact that customers are
driving change as well.  The industry's largest customer, the Government, has
changed the way it purchases services so now along with almost every other
customer it too is demanding more for less.

There is no question that this change is transforming the industry.  No
company is unaffected. Some companies are responding by striving to
achieving economies of scale - that's why we've seen two of the largest
companies announce a plan to merge. For others it's about specializing and
focusing on what they do best. For many the days of operating networks and
selling services are over and it's become a question of what to divest.

At TeamTalk we see all this change as (finally) providing us with a world of
opportunities.

Our Strategy
We are well advanced with our program to adapt to this new environment.
We've always understood the value of a dollar and the importance of our
customers.  Our focus for the last year or so has been on developing new
services on which we are building new revenue streams, largely from selling
more to our existing customers.  We are making good progress - it just takes
time to achieve material volumes.

The big opportunity now is to acquire some quality assets that complement our
existing business.  As signalled at our annual meeting last year we are on
the lookout for acquisitions and we think that both our financial position
and the external environment for asset purchases combine to make the prospect
of something happening on this front the best it's been for years.

That said our approach, of course, remains as cautious and conservative as
ever so we're unable to provide any guidance at this stage as to whether
anything will actually come out this year.

Dividend
The Directors have declared a fully imputed dividend of 10 cents per share
payable on the 12th of October 2012 bringing the total for the year to 20
cents. The record date for entitlement to the final dividend is 5pm on
Friday 5th October 2012.

The Company's Dividend Reinvestment Plan, which enables eligible shareholders
to conveniently increase their equity stake in TeamTalk at a 3% discount to
the market price, will continue to be in operation for this dividend.

Outlook
We wholly expect FY13 to be another challenging year - but we wouldn't have
it any other way!  Putting any potential acquisitions to one side we expect
EBITDA to be broadly in line with the year just gone but lower depreciation
and interest expense should see the current year delivering another record
result for shareholders.

Of course we remain committed to generating value for you our shareholders,
our debt providers and the customers we serve so thank you all once again for
your continued support.

Joe & David
On behalf of the TeamTalk Board
End CA:00226543 For:TTK    Type:FLLYR      Time:2012-08-28 12:47:12