Ann: FLLYR: TTK: TeamTalk - A Year of Transition

• Release Date: 27/08/13 17:43
• Summary: FLLYR: TTK: TeamTalk - A Year of Transition
• Price Sensitive: No
• Download Document  6.04KB

					

TTK
27/08/2013 15:43
FLLYR

REL: 1543 HRS TeamTalk Limited

FLLYR: TTK: TeamTalk - A Year of Transition

Name of Listed Issuer: TeamTalk Limited
Reporting Period: 12 months to 30 June 2013

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:

46,241; Up 40.3%; 32,970

OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX:

5,375; Down 28.4%; 7,511

Unusual items for separate disclosure:
0;0;0

OPERATING SURPLUS BEFORE TAX:
5,375; Down 28.4%; 7,511

Less tax on operating profit:
1,780; Down 15.7%; 2,112

NET SURPLUS AFTER TAX AND EXTRAORDINARY ITEMS:
3,595; Down 33.4%; 5,399

NET SURPLUS (DEFICIT) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS:
(2); Down 66.7%; (6)

NET SURPLUS ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER:
3,597; Down 33.5%; 5,405

Basic earnings per share:
13.87 cps; Down 40.4%; 23.28 cps

Diluted earnings per share:
13.87 cps; Down 40.4%; 23.28 cps

Net Tangible Assets per share:
12.93 cps; Down 73.4%; 48.56 cps

Final Dividend:

10.0 cps, 0%, 10.0 cps
Record Date: 11 October 2013
Payable Date: 18 October 2013
Imputation tax credit on latest dividend: 3.8889 cps

A supplementary dividend of 1.7647 cps will be payable on 18 October 2013 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 11
October 2013.

From The Chairman and Managing Director:

2012-13 was a transformational year for TeamTalk.  Your company has ended the
year substantially stronger and in a much better place to capitalise on the
opportunities that the rapidly evolving telecommunications industry presents.

The acquisition of the specialist rural telecommunications operator BayCity
Communications Limited (trading as Farmside) has added a third string to our
bow.  Not only does this business unit contribute a significant new source of
revenue in its own right, but it also complements our other businesses by
enabling them to develop new products and services and to serve new markets.

We have also transformed our management team.  We have been fortunate enough
to attract the services of three highly capable and experienced executives to
lead our business units.  These guys together with a new technology
strategist and our long serving Finance Director form one of the most capable
executive teams in the industry.

Operating Performance
The six and half months' contribution of Farmside was responsible for the
overall 40% increase in revenue to $46.2 million.  However, largely as a
result of one off costs associated with the Farmside acquisition and the
imposition of a new tax on telecommunications companies (the
Telecommunications Development Levy), reported EBITDA for the group was only
marginally ahead of last year.

As indicated in our previous advice, Mobile Radio EBITDA is down $1.3 million
with the biggest contributor, other than the TDL levy, being delays in the
implementation of some significant customer projects.  Broadband revenues
were also down slightly - largely as a result of pricing pressure brought on
by the Government's ultrafast broadband initiative, while that division's
earnings were also impacted by the TDL.

Farmside also has to bear the cost of the TDL however even without that
factor its earnings didn't meet the expectations at the time of acquisition
with annualised EBITDA around $5.0 million.  In simple terms it has hit an
upswing in competitive activity just as it was more inwardly focused on
repositioning its business.  However, despite earnings being a little behind
expectations cash generation has remained strong with Farmside's debt
reduction over the period being about half of its $2.5m EBITDA contribution.
Overall we remain confident in the prospects for Farmside with the rationale
and logic behind the acquisition even stronger than originally envisaged.

Strategy and Tactics
Our fundamental strategy is simply to listen to our customers, think
carefully about every dollar we spend and continue to strive towards being
the world's best little telco.

Increasingly our customers are telling us they want to purchase complete
systems not just components.  In our mobile radio business for example,
customers are no longer looking to purchase just airtime, they're expecting
handsets and data applications with full service on top.  We are adapting the
company to meet these needs.  Similar changes are occurring in our broadband
business.

We are also changing Farmside to meet this model.  We've shut down its
peripheral operations, strengthened its management team and we're improving
the customer facing aspects of the business as well as enriching the product
offerings.

Dividend
The Directors have declared a fully imputed dividend of 10 cents per share
payable on October 18th bringing the total for the year to 20 cents.  The
record date for entitlement to the final dividend is 5pm on Friday October
11th.

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

Outlook
We're expecting 2014 to be a year of two halves.  With a new management team
to bed in and our Farmside acquisition to digest, we're expecting a business
as usual first half.  In the second half we should be dangerous.

Our expectation is that we will at least maintain the dividend at its current
level.

Thank you for your continued support.

Joe & David
End CA:00240250 For:TTK    Type:FLLYR      Time:2013-08-27 15:43:39