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  1. #2261
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    Trying to turn the ship around by cost cutting doesn't sound like a growth business?

    "MARKET RELEASE – MONDAY 6 MAY 2024
    EMBARGOED UNTIL [DATE] [delete this row if not required]
    Spark reduces FY24 EBITDAI guidance as tough trading conditions intensify
    Spark New Zealand (Spark) today announced it is reducing FY24 EBITDAI guidance from
    $1,215-$1,260 million to $1,170-$1,210 million, as challenging trading conditions intensified in some
    parts of the business. There is no change to FY24 capital expenditure and dividend guidance.
    At Spark’s first half results the Company noted weaker demand in the enterprise and government
    market, which impacts Spark’s IT revenues. Since the half, public and private sector spending cuts
    have deepened
    , and Spark has seen significantly reduced demand in IT service management and
    professional services and delays to planned digital transformation projects.
    At the same time, while mobile service revenue and broadband performance remains in line with
    expectations, sales of mobile devices and accessories have been softer than expected as high
    interest rates and cost-of-living pressures dampened consumer spending. "

    https://stocknessmonster.com/announc...pk.nzx-430555/
    Last edited by kiora; 30-06-2024 at 09:09 PM.

  2. #2262
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    Quote Originally Posted by kiora View Post
    Trying to turn the ship around by cost cutting doesn't sound like a growth business?

    "MARKET RELEASE – MONDAY 6 MAY 2024
    EMBARGOED UNTIL [DATE] [delete this row if not required]
    Spark reduces FY24 EBITDAI guidance as tough trading conditions intensify
    Spark New Zealand (Spark) today announced it is reducing FY24 EBITDAI guidance from
    $1,215-$1,260 million to $1,170-$1,210 million, as challenging trading conditions intensified in some
    parts of the business. There is no change to FY24 capital expenditure and dividend guidance.
    At Spark’s first half results the Company noted weaker demand in the enterprise and government
    market, which impacts Spark’s IT revenues. Since the half, public and private sector spending cuts
    have deepened
    , and Spark has seen significantly reduced demand in IT service management and
    professional services and delays to planned digital transformation projects.
    At the same time, while mobile service revenue and broadband performance remains in line with
    expectations, sales of mobile devices and accessories have been softer than expected as high
    interest rates and cost-of-living pressures dampened consumer spending. "

    https://stocknessmonster.com/announc...pk.nzx-430555/
    Who said anything about Spark being a 'growth business'? Certainly not me. Taking costs out has been the way Spark has operated since, well before it was even called Spark. This is how, particularly incumbent Telcos operate all over the world. Telstra in Australia is up to the same tricks, but are probably a little less sharp on the execution in comparison to Spark.

    Recycling the May 2024 profit downgrade press release doesn't add any more to the argument than it did when it first came out - no change in dividend guidance being a key matter you did not underline. We all know the business/government environment is weaker. We also know the relentless pressure of digitisation is not going away. The main difference this announcement made to me was that for those willing to look through the immediate difficult environment (including myself), I was able to 'top up' with some Spark shares at a lower price than if the downgrade had not been issued. Thank you very much 'Mr Market'.

    SNOOPY

    P.S. I haven't given up completely on Spark ever being a 'growth business', But I am not prepared to price it as such. If I don't pay for growth now, and it does arrive, that just means I will get any growth benefits 'for free'.
    Last edited by Snoopy; 30-06-2024 at 09:38 PM.
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  3. #2263
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    "Spark New Zealand announces on-market share buyback to continue the return of TowerCo proceeds to shareholders"
    And also funds from selling Spark Sport?

    https://stocknessmonster.com/announc...pk.nzx-428714/

    Rather than investing in their business to grow their business?

    Whereas IFT used the funds from Tower Co to reduce the cost of capital invested in Vodafone/One NZ and to grow their business elsewhere,Datacenters,Renewable Energy projects.....

    Meanwhile DPS for Spark are forecast to be higher than EPS (preabnormal $NZ) by a considerable margin
    Last edited by kiora; 01-07-2024 at 11:42 AM.

  4. #2264
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    Quote Originally Posted by kiora View Post
    "Spark New Zealand announces on-market share buyback to continue the return of TowerCo proceeds to shareholders"
    And also funds from selling Spark Sport?
    The Spark PR spin obviously worked on you. Spark had to find $54m to extract themselves from their 'SparkSport' obligations. It was a massive loss, papered over by the offsetting TowerCo sale money.

    Quote Originally Posted by kiora View Post
    Rather than investing in their business to grow their business?
    SailorRob would be nodding in agreement with you here. He was just taking a tentative interest in Spark, and asked me about the retained earning stream that was available to be reinvested by the company. When I told him there was none, our polite conversation came to a dramatic stop! I didn't think it was possible to silence the Sailor (short of banning him). But telling him there was nothing to reinvest did the trick!

    The fact is Spark is an 'established incumbent' with a big market share across all the markets they operate in. It isn't clear that there are easy incremental earnings to be made by splashing new investment capital around. The failed 'Spark Sport' foray being the obvious, recent, example. Sometimes it is refreshingly honest for management to say that actually we don't have a pipeline of promising new investment prospects right now. The best use of our surplus funds right now is to give them back to shareholders. I respect management that are honest enough to take that stand.

    Quote Originally Posted by kiora View Post
    Whereas IFT used the funds from Tower Co to reduce the cost of capital invested in Vodafone/One NZ and to grow their business elsewhere,Datacenters,Renewable Energy projects.....
    You are telling us that funds from the OneNZ tower sale were used to 'pay down debt' (which is what reducing the cost of capital means in this context). But after that there were no ideas. So the further surplus funds were removed from OneNZ, to spend on other unrelated Infratil projects. Sounds like a very similar approach to that taken by Spark.

    Quote Originally Posted by kiora View Post
    Meanwhile DPS for Spark are forecast to be higher than EPS (preabnormal $NZ) by a considerable margin.
    So you keep saying. I am not blind to this risk. But Spark management do not appear concerned, and I believe they understand their own business well. I am happy to trust the current management team, while always buying at a 'yield discount' - which means my target investment yield is preserved even if dividends do end up being reduced.

    SNOOPY
    Last edited by Snoopy; 06-07-2024 at 05:59 PM.
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  5. #2265
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    Telstra increases phone plan prices above inflation rate

    https://www.afr.com/companies/teleco...0240709-p5js4o
    one step ahead of the herd

  6. #2266
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    Quote Originally Posted by bull.... View Post
    Telstra increases phone plan prices above inflation rate

    https://www.afr.com/companies/teleco...0240709-p5js4o
    Are you suggesting that Spark should do the same bull? Given you are getting so rich now, it would probably be a good thing if your Spark mobile bill went up.

    SNOOPY
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  7. #2267
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    Quote Originally Posted by Snoopy View Post
    Are you suggesting that Spark should do the same bull? Given you are getting so rich now, it would probably be a good thing if your Spark mobile bill went up.

    SNOOPY
    Im picking they will , along with the rest at some stage. broadband increase just the start. they need to plug revenue gap from postponed govt expenditure ( which come back some yr ) also picking more staff layoff's soon.

    if stock price can rise from here it would post a higher low ( bullish ) short term which would add even more to my seasonal positive july. lets see
    Last edited by bull....; 10-07-2024 at 10:06 AM.
    one step ahead of the herd

  8. #2268
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    positive price action now , cross fingers
    one step ahead of the herd

  9. #2269
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    above 4.30 and we are cemented the lower low , very bullish
    one step ahead of the herd

  10. #2270
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    I’m one of the loyal customers of spark. Yet I haven’t bought their shares. One good thing is unlike some other stocks it didn’t drop badly over the last 10 years and volatility was also low. I should keep it on my radar.

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