Spark rebrand is igniting success - chairman

Telecom chairman Mark Verbiest. Photo / Dean Purcell

Shareholders told increase in visits to shops and online shows new name is working.

Spark, formerly Telecom, says there are early signs that its rebranding has been successful.

Telecom changed its name to Spark New Zealand in August, ushering in four divisions - Spark Home, Mobile and Business, Spark Digital, Spark Wholesale and Spark Ventures. "It's only a few months into it, but the early signs are that the rebranding has proved successful - we are seeing an increase in foot traffic into retail stores, and an increase in online traffic to our websites," chairman Mark Verbiest told the annual meeting yesterday.

"This move, while significant, is just a single big step in the ongoing transformation of our business."

Verbiest said the company had repositioned itself for a digital future - focused on the New Zealand market.

More than a million New Zealanders have shares in Spark, either directly as a shareholder or indirectly through KiwiSaver investments.

The company has announced a 1c increase in annual dividend, to 17c a share for 2014.

Combined with an appreciation in the share price, shareholders achieved a total return for the 2014 year of 28 per cent.

Since beginning the implementation of this strategy in June 2013, Spark's share price has risen by 38 per cent.

Taking into account dividends, the total return to shareholders has been 53 per cent over this period, the company said. Over the same period the NZX50 gross index gained 22 per cent.

Shares in Spark closed up 1.5c yesterday at $3.05.

One quarter into the current financial year, Verbiest said the company was striving for a return to sustainable earnings growth.

In August, the company said it was targeting low, single-digit growth in operating earnings and a low, single-digit decline in total revenue.

"When we outlined our core strategy to investors in May 2013, we said that we realistically expected 2014 and 2015 to be years in which we stabilised the business and reduced costs, targeting revenue and margin growth and improvement in unit costs in 2016 and beyond," Verbiest said.

"If anything, we actually think we are slightly ahead of this plan, however, we know that the market is not standing still - competition remains intense, particularly in the mobile and broadband markets."

In its latest result for the June year, Spark reported its profit from ordinary activities came to $321 million, excluding discontinued operations, up 19.8 per cent on the previous year, he said.