Ann: Spark reduces FY25 guidance, page-7

'I think now it is when the shorters will come to the party and drive the price further down...'

Short positions are on the rise again. Daily shorts reported on 23rd (866,325) were 18% of volume traded and the highest since shorts peaked in September:



This is the third downgrade in less than six months:

MARKET RELEASE – MONDAY 6 MAY 2024

MARKET RELEASE – 23 AUGUST 2024

MARKET RELEASE – 30 OCTOBER 2024

EBITDAI guidance updated from $1,165-$1,220 million to $1,120-$1,180 million
Capex guidance updated from ~$460-$480 million to ~$415-$435 million
Dividend guidance updated from 27.5 cents per share to 25 cents per share, 75% imputed

Management are clearly struggling to turn things around:

“The challenges we are facing are both cyclical and structural. Weak business investment and
consumer spending continue to curtail growth and squeeze margins. At the same time, we are
undertaking a significant transformation of our Enterprise and Government division to address
structural segment challenges.
“We have reduced our EBITDAI guidance range by $45 million, or 4%, to reflect the softer trading
conditions we have experienced, while right sizing our capex guidance to this new earnings profile.
With this context the Board has made the difficult but necessary decision to reduce FY25 dividend
guidance to 25 cents per share.”
With the reduction in EBITDAI guidance being offset by the reduction in capex guidance, Spark’s
free cash flow ambition of $400-$440 million remains unchanged. The Company remains committed
to bringing net debt back to targeted levels.
“Looking forward, we are resolutely focussed on resetting performance in our core, expanding the
SPK-26 Operate Programme to significantly reduce our cost base and offset market headwinds,
and simplifying our portfolio,”

Management spoke to the SPK-26 Operate Programme in the May announcement. You have to question how successful this action is.
Selling assets, reducing costs and shrinking your portfolio to reset your balance sheet tells me this turnaround will take some time.

Looking at today's market response, share price may have bottomed at current levels. This is the only reason I remain a holder. I will look to exit if opportunity presents.