Boutique Wellington telecommunications company Team Talk (TTK) has posted a profit of $2.13 million before unusual items and tax, down from $2.7 million for the same period last year.

Team Talk operates two separate divisions: mobile radio and ultra-fast broadband (under the Citylink banner).

Revenue increased 2.4% to $15.5 million while operating costs only increased 1.0% to $9.3 million. This includes growth in revenue from wireless services of 2.7% to $10.0 million, and growth in fibre-optic revenues of 1.9% to $5.4 million.

The company doesn’t expect to maintain its wireless revenue growth in the short term because of the recessionary conditions affecting their major customers in the transport sector.

The directors say a tight control on costs resulted in ebitda increasing by 4.5% to $6.3 million compared to the same period in 2007.

A revaluation of interest rate swaps leading to a $500,000 loss “unduly” affected the net profit of $1.5 million, but the loss is unrealised and expected given the OCR decline and capital market environment, say the directors.

Team Talk founder and managing director David Ware bemoaned the one-off, unrealised paper loss incurred because of the changeover to the new accounting standards.

“F***ing IFRS, excuse me. Basically this new stupid bloody financial reporting where we’ve got to take all our swaps and hedges and mark them to market, and other non-cash things, zapped us in the bottom line like everybody else,” Mr Ware says. “Mind you next year they won’t be there and I’ll be taking full credit for a wonderful result.”

Profit available for distribution to shareholders is not affected by the on-paper loss, with a fully imputed dividend of 10c a share declared and payable on 24 April 2009.

The final dividend for the 2009 year will not be less than 10c per share with full imputation credits making a total dividend for the year of 20c per share fully imputed.

Team Talk has also decided to introduce a dividend reinvestment plan (DRP) ahead of the interim dividend, at the prompting of shareholders who want a greater stake, and to beef up the cash position.

“We realised that this is a time that cash is king. I’m expecting that with a little bit of luck there’ll be a few bargains around over the next six to 12 months, and it’d be nice to be in a position where we can swoop and pick up some assets at firesale prices," Mr Ware says.

The plan will offer shareholders, should they choose, a way of reinvesting all or part of their dividends in ordinary shares in the company, with shares issued at a 3% discount to the average closing price in the week after the record date for the dividend.

The company expects that revenue for the full year will show a modest decline when compared to the 2008 year, but through containing costs profit is expected to be in line with, though slightly down on last year’s figure of $3.98m.

The company's share price of $2.14 was unaffected by the result.