KEY POINTS:
Telecommunications company Team Talk today reported its June year net profit fell 6.9 per cent to $3.6 million.
The company declared a 10 cent fully imputed final dividend to add to its 10 cent half year dividend. It forecast it would hold its dividend for next year.
The profit fall was despite a 22 per cent rise in revenue to $24.6m. The higher revenue was mainly due to the purchase of two thirds of Wellington based super-fast broadband company CityLink in December.
The company sees CityLink performing strongly next year.
The pre-tax operating surplus fell 16 per cent to $4.9m and earnings per share fell to 18.11c from 19.51cps.
Team Talk said its core mobile radio business underwent significant change as the company geared up to sell mobile data such as computer aided vehicle tracking and dispatch services into its established markets.
It said traditional voice services showed a modest decline as expected as customers moved from voice dispatch to new computerised systems.
Revenue from the company's mobile radio business was down slightly from $20.2m to $20.0m while costs increased from $11.3m to $11.9m. But it continued to generate very strong free cash flows, with the 20cps dividend accounting for less than 60 per cent of the $7m available.
The CityLink contribution was in line with expectations provided to the market at the time of the acquisition. Revenue increased 17 per cent with ebitda also up by a similar percentage.
"CityLink is in an enviable position in a growing market and with continued investment into the business should sustain strong growth into the future," the company said.
It predicts CityLink revenue and earnings growth of 20 per cent and expects 2008 to be a very strong year with revenue of over $10m and ebitda of over $4.0m.
For Team Talk, market trends are expected to continue.
It anticipates an upturn in sales of mobile data which will almost offset a decline in voice revenues. However, a likely drop in miscellaneous revenue is likely to see revenue down marginally in 2008.
Team Talk shares were down 2c to $2.38 in a weak market and they have fallen from $2.63 a year ago.
- NZPA
