SPK- Spark NZ (TELCO)

[ziggy415]

Hi ziggy415 lol. I have a good accountant for over 25 years, who did apprenticeship with the IRD as an auditor. So no problems there and live off the interest from investments but am down a wee bit on SPK but who isn't. If it goes any lower will have to start a 3.50s club.

Sorry seeweed i cant join the 3.50 club but i will join the 4.50 club and at the time of purchase i thought it was an exclusive club 🤔

[Snoopy]

The figure of $50m staff savings, is that a net figure after redundancy costs ?

Redundancy costs are generally paid out in one year, whereas resultant salary savings carry on every year perpetually after. There were significant redundancy costs over FY2024, although these do not appear to have been separately declared. If you look at employee remuneration (AR2024 p77), you will see that the number of employees earning $100,000+ per year jumped from 215 to an astonishing 2688 over one year. However, this increase was largely due to the number of redundancy payments made over FY2024.

Taking the incremental increase in each wage band, and multiplying that number by the mid point of the wage band, then adding the result of all wage bands together will give us an estimate of the costs saved in making high salaried employees redundant. Above the $370.001 to $380,000 wage band, there were no significant increase in the numbers in those wage groupings.

Wage Band Average	Incremental Employees	Wage Bill Saved
$105k	281	$29.505m
$115k	272	$31.280m
$125k	287	$35.875m
$135k	256	$34.560m
$145k	281	$40.745m
$155k	260	$40.300m
$165k	193	$31.845m
$175k	128	$22.400m
$185k	107	$19.795m
$195k	95	$18.525m
$205k	46	$9.430m
$215k	54	$11.610m
$225k	37	$8.325m
$235k	34	$7.990m
$245k	14	$3.430m
$255k	12	$3.060m
$265k	11	$2.915m
$275k	8	$2.200m
$285k	4	$1.140m
$295k	11	$3.245m
$305k	11	$3.355m
$315k	15	$4.725m
$325k	3	$0.975m
$335k	5	$1,675m
$345k	5	$1.725m
$355k	2	$0.710m
$365k	3	$1.095m
$375k	3	$1.125m
Total		$373.56m

The total labour bill at Spark over FY2024 was $512m. Of course not all of that incremental total will represent wages. It will be wages and redundancy costs. The added total will also incorporate wage inflation over the year.
If we take wage inflation to be 7%, the actual 'like with like' savings in wages between FY2023 and FY2024, I estimate to be:

(1-0.07)($373.56m/2)= $174m

The actual wage bill saved will be less than this, because this 'saving' doesn't include wages that will be paid out to new employees hired over FY2025. So in this context, an ongoing saving in the wage bill of $50m per year looks reasonable and achievable.

SNOOPY