Moutter's big moment on hold til new year
Telecom shares [NZX:TEL] fell 6.72% as the market opened during its full-year result presentation this morning (early afternoon, it was down 8.53%).
NBR broke news of the fall to Mr Moutter soon after he left the stage.
“A good CEO doesn’t worry about the short term share price,” he replied, unruffled.
Telecom was a difficult stock to value after the Chorus split, Mr Moutter said. Many analysts DCF [discounted cash flow] valuations were some distance from its market value. (Ahead of yesterday's report, Forsyth Bar had a DCF valuation on Telecom of $2.06 a share; Deutsche Bank a 12-month target of $2.33.) His focus was on long term performance.
Mr Moutter spoke briefly, sticking to very general points, then remained on stage for a Q&A. The main results briefing was delivered by acting CEO Chris Quin and CFO Nick Olson – whom Mr Moutter said had a “locked-and-loaded” plan in place by the time he started two weeks ago.
Given he was appointed back in April, and his previous tenure as COO, some analysts hoped he would hit the ground running.
QUIET START: Mr Moutter spent the main part of the presentation in the audience, chosing not to use the event to make any big vision statement, or detailed comments on today's result and guidance.
During his brief comments, Mr Moutter said he was working on a plan for Telecom that would be “ambitious” and “powerful.”
The new CEO planned to talk to customers and other stake holders. He did not feel pressured by the falling share price to rush-release any details.
He told NBR he would not detail his plan until “early next year.”
IF YOU GUYS COULD JUST HANDLE THE MOBILE "RE-SET": CFO Olson (left) and acting CEO Quin led the main results session.
Mr Moutter did say he wanted to draw a line in the sand in retail broadband, where Telecom said today its market share dropped from 53% to 50% over the past six months. (Customer numbers actually increased slightly from 599,000 as at June 30 from 591,000 a year earlier, but rivals grew faster.)
Telecom earnings would be flat or see a single digit decline in 2013, in part because of the need to invest to protect broadband share.
Earlier, Mr Quin said a residential fibre roll-out due to begin early next year, would be one point of focus. He declined to give any financial or customer targets for the first year of the roll-out.
During his first tour of duty at Telecom, Mr Moutter had a reputation for not suffering fools. Today, he was relaxed and upbeat, only expressing mild annoyance at one point when a reporter approached the stage to take photos on his iPhone, blocking the webstream camera.
The acting CEO previously told NBR that bundled services – including video, including sports – would be a key part of the residential fibre roll-out.
Mr Quin also said mobile would be a focus. Increased smartphone update and data usage helped boost earnings at services division Gen-i. The company has just launched a new $19 budget plan to win back share in the pre-pay market.
At the other end of town, it has some business customers about to go on a 4G trial. However, CFO Olson noted there was only capex for the trial, not any nationwide rollout over the next year.
Mr Quin said Telecom's headcount had dropped 5% over the past year. The market will also be watching closely for Mr Moutter's plans in the area of cost control - an area where analysts saw him as a tight operator during his time as COO.