Ann: FORECAST: TTK: TeamTalk FY13 Update

• Release Date: 07/06/13 11:42
• Summary: FORECAST: TTK: TeamTalk FY13 Update
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TTK
07/06/2013 09:42
FORECAST

REL: 0942 HRS TeamTalk Limited

FORECAST: TTK: TeamTalk FY13 Update

TeamTalk FY 13 Update

7th June 2013

A group-wide organisational restructuring together with the Government's new
tax on telecommunications operators has resulted in TeamTalk reducing its
2013 full year earnings expectations.  Nonetheless the company continues to
maintain its dividend and pay down debt.

In our 2013 Interim Result announcement we said that excluding the Farmside
acquisition, and the one-off costs associated with it, we expected a modest
lift in EBITDA in the second half of the year. We now expect the second half
to be a little lower than the first half.  Bottom line profit will also be
knocked around a bit as a result of non-cash charges and accounting
adjustments largely resulting from the Farmside acquisition.

With the acquisition of Farmside TeamTalk has made the transition from a
small sized company to a medium sized company. To embed this transition the
board has made the decision to review the company's management structure and
resource the company appropriately. "Now is a great time to be in the market
looking for top quality experienced telecommunications professionals with
some entrepreneurial flair" says Managing Director Mr. Ware.  "A new
management team usually takes some time to get up to speed so we are
expecting we'll have to slow down a bit until they get their teeth into the
business fully.  That said this is an exciting time for TeamTalk, gaps are
appearing as the larger companies consolidate their businesses and we have
lots of exciting opportunities to pursue."

The company has previously advised that Farmside's performance is in line
with the expectations we outlined at the time of acquisition.  We also
expected that short term results would be influenced by the costs associated
with positioning the company for growth.  Tough market conditions mean that
Farmside's underlying earnings have temporarily stalled at around FY12
levels.  In addition the costs associated with repositioning the company are
a little higher than expected and therefore Farmside's result will fall short
of the threshold required for TeamTalk to pay any additional earn-out
consideration for the Farmside group.

Mr Ware remains deeply unhappy with the Government's Telecommunications
Development Levy.  He believes that this charge, which taxes TeamTalk to the
tune of $0.5 million a year, is overly tough on smaller, innovative
telecommunications companies and simply subsidises two of the industry's
largest players.

Notwithstanding this pothole, the group continues to repay debt.  Overall
debt is down around $2 million since 31 December.  Accordingly the company
remains comfortable with its current policy of paying an annual 20 cents per
share fully imputed dividend.

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

For more information please contact

David Ware, TeamTalk
0800 101-900
End CA:00237168 For:TTK    Type:FORECAST   Time:2013-06-07 09:42:40