- Spark NZ has reduced its FY Ebitdai forecast, adjusting it from a range of NZ$1.22 billion to NZ$1.26 billion to an estimated range of NZ$1.17 billion to NZ$1.21 billion.
- The dividend per share is expected to remain at 27.5 NZ cents.
- Capital expenditure is expected to remain between NZ$510 million to NZ$530 million.
- The reduced guidance is due to intensified challenging trading conditions in some parts of the business.
- There has been notably weaker demand in the enterprise and government markets, impacting Spark’s IT revenues.
- Public and private sector spending cuts have deepened since the half year, affecting demand in IT service management and professional services.
- Several planned digital transformation projects have been delayed, grappling with significantly reduced demand.
- Despite these, mobile service revenue and broadband performance continue to align with expectations.
- Sales of mobile devices and accessories have been softer than expected.
- Spark has seen a material deterioration in the outlook for IT revenues, coupled with subdued market conditions, leading to reduced FY24 Ebitdai outlook.
- To counter this, Spark is fast-tracking its SPK-26 Operate Programme for quicker efficiency benefits.
- This will go hand in hand with broader efficiency initiatives to lessen the impact of the softer trading conditions.
- Current market analysts’ opinions include 2 buys, 7 holds, and 1 sell for Spark NZ.
A look at Spark New Zealand Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 4 | |
| Growth | 4 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on Smartkarma Smart Scores, Spark New Zealand shows a positive long-term outlook. The company scores well in Dividend and Growth factors, indicating strong potential for returns and expansion. Additionally, its Momentum score suggests a promising trend in its future performance. While Value and Resilience scores are lower, the company’s focus on mobility, data, and cost-efficiency aligns with its strategic direction.
Spark New Zealand Limited, formerly known as Telecom Corporation of New Zealand Limited, is dedicated to providing digital communication, entertainment, and IT services to individuals and businesses in New Zealand. With a strategic emphasis on mobility, data, and seamless service delivery, the company is positioned to capitalize on evolving industry trends and technological advancements.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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