Digital radio network and fibre operator TeamTalk saw net profit decline 3.3% decline to $3.83 million (or 18.25 cents per share) for its 2010 financial year, ended June 30.Ebit fell 7.6% to $5.29 million (with mobile radio contributing $2.98 million, and
Digital radio network and fibre operator TeamTalk saw net profit decline 3.3% decline to $3.83 million (or 18.25 cents per share) for its 2010 financial year, ended June 30.
Ebit fell 7.6% to $5.29 million (with mobile radio contributing $2.98 million, and fibre broadband opertions $3.60 million).
Revenue was down 2.1% to $30.6 million, of which mobile radio accounted for $17.8 million; fibre $12.7 million.
The full year dividend was 10 cents per share.
Asked by NBR to explain the annual decline, chief executive David Ware had two words: “The economy”.
The recession meant less installation work for Teamtalk subsidiary CityLink, which runs a fibre network in Wellington.
New Citylink installations were down markedly, said Mr Ware.
The year also saw Teamtalk’s digital radio business face new competition as state-owned Kordia teamed with Motorola to launch a rival walkie talkie network.
As for all companies with telecommunications interests, the year ahead is near-impossible to pick until the government awards Crown fibre contracts.
Unlike another fibre network operator - FX Networks - Mr Ware said TeamTalk had not but any freeze on capital investment while it awaited decisions of Crown fibre.
Nevertheless, there was some UFB impact. Citylink’s tilt for the Wellington Local Fibre Company contract had so far cost “several hundred thousand dollars”, which all came off the bottom line.
Certainly that would have to be described as "lean". Especially given that Chorus boss Mark Ratliffe - assigned full-time to Telecom's bid - earned $630,000 last year, plus a $599,000 bonus; up to 100 others have worked on the telco's bid.
Mr Ware estimated Enable in Christchurch had probably spent $500,000 on its bid; Vector in Auckland $1 million (excluding its related ad campaign).
“I’d like to say I’m quietly confident, but I can’t comment,” Mr Ware said when asked about Citylink’s Crown Fibre prospects.
TeamTalk shares (NZX: TTK) closed flat today at $2.05. They have a 52-week range of $1.90 to $2.40.
