Live News • Jun 15
Spark New Zealand Resets Dividend as Profit Falls and Data Investment Rises Spark New Zealand has cut its dividend after a period of earnings weakness and a softer New Zealand economy, ending a long record of relatively stable payouts.
The reset dividend is now aligned with the company’s reduced profitability, raising questions about how reliable future distributions might be.
Management is prioritising earnings stability and free cash flow by growing data centre and digital infrastructure operations, while still dealing with strong competition and high capital expenditure needs.
The core issue is whether Spark can grow cash generation from data-focused businesses quickly enough to comfortably support its new, lower dividend level.
Investors may want to pay close attention to how capital spending, data centre utilisation and competitive pressures affect free cash flow, since these factors sit at the centre of Spark’s ability to keep funding dividends over time. New Risk • May 18
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 1.4% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 1.4% per year for the foreseeable future. Minor Risks High level of debt (103% net debt to equity). Dividend is not well covered by earnings (140% payout ratio). Upcoming Dividend • Mar 12
Upcoming dividend of NZ$0.087 per share Eligible shareholders must have bought the stock before 19 March 2026. Payment date: 10 April 2026. The company is paying out more than 100% of its profits but is generating plenty of cash to support the dividend. Trailing yield: 7.0%. Within top quartile of New Zealander dividend payers (5.9%). Higher than average of industry peers (4.3%). Declared Dividend • Feb 20
First half dividend of NZ$0.087 announced Shareholders will receive a dividend of NZ$0.087. Ex-date: 19th March 2026 Payment date: 10th April 2026 Dividend yield will be 10%, which is higher than the industry average of 4.7%. Sustainability & Growth Dividend is not covered by earnings (140% earnings payout ratio). However, it is covered by cash flows (57% cash payout ratio). The dividend has decreased over the past 10 years, indicating a lack of growth and stability in payments. The company's earnings per share (EPS) would need to grow by 56% to bring the payout ratio under control. EPS is expected to grow by 7.6% over the next 3 years, which means the dividend may need to be reduced to reach a sustainable payout ratio. New Risk • Feb 19
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 0.6% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 0.6% per year for the foreseeable future. Minor Risks High level of debt (103% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Reported Earnings • Feb 18
First half 2026 earnings released: EPS: NZ$0.029 (vs NZ$0.019 in 1H 2025) First half 2026 results: EPS: NZ$0.029 (up from NZ$0.019 in 1H 2025). Revenue: NZ$1.89b (down 2.4% from 1H 2025). Net income: NZ$54.0m (up 54% from 1H 2025). Profit margin: 2.9% (up from 1.8% in 1H 2025). The increase in margin was driven by lower expenses. Revenue is forecast to stay flat during the next 3 years compared to a 3.0% growth forecast for the Telecom industry in Oceania. Over the last 3 years on average, earnings per share has fallen by 60% per year but the company’s share price has only fallen by 25% per year, which means it has not declined as severely as earnings. Buy Or Sell Opportunity • Jan 24
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 7.1% to NZ$2.24. The fair value is estimated to be NZ$2.82, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 3.6% over the last 3 years. Earnings per share has declined by 43%. For the next 3 years, revenue is forecast to grow by 0.5% per annum. Earnings are also forecast to grow by 3.1% per annum over the same time period. Buy Or Sell Opportunity • Dec 17
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 4.3% to NZ$2.25. The fair value is estimated to be NZ$2.83, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 3.6% over the last 3 years. Earnings per share has declined by 43%. For the next 3 years, revenue is forecast to grow by 0.5% per annum. Earnings are also forecast to grow by 3.0% per annum over the same time period. Buy Or Sell Opportunity • Nov 07
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 12% to NZ$2.29. The fair value is estimated to be NZ$2.88, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 3.6% over the last 3 years. Earnings per share has declined by 43%. For the next 3 years, revenue is forecast to grow by 0.5% per annum. Earnings are also forecast to grow by 3.0% per annum over the same time period. Upcoming Dividend • Sep 05
Upcoming dividend of NZ$0.14 per share Eligible shareholders must have bought the stock before 09 September 2025. Payment date: 03 October 2025. The company is paying out more than 100% of its earnings and cash flow. Trailing yield: 9.8%. Within top quartile of New Zealander dividend payers (5.4%). Higher than average of industry peers (4.3%). Buy Or Sell Opportunity • Aug 26
Now 21% undervalued Over the last 90 days, the stock has risen 11% to NZ$2.50. The fair value is estimated to be NZ$3.15, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 3.6% over the last 3 years. Earnings per share has declined by 43%. For the next 3 years, revenue is forecast to grow by 0.5% per annum. Earnings are also forecast to grow by 4.2% per annum over the same time period. Declared Dividend • Aug 22
Final dividend of NZ$0.14 announced Shareholders will receive a dividend of NZ$0.14. Ex-date: 9th September 2025 Payment date: 3rd October 2025 Dividend yield will be 11%, which is higher than the industry average of 4.7%. Sustainability & Growth Dividend is not covered by earnings (183% earnings payout ratio) nor is it covered by cash flows (203% cash payout ratio). The dividend has increased by an average of 3.3% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. The company's earnings per share (EPS) would need to grow by 104% to bring the payout ratio under control. EPS is expected to grow by 15% over the next 3 years, which means the dividend may need to be reduced to reach a sustainable payout ratio. Reported Earnings • Aug 20
Full year 2025 earnings: EPS and revenues miss analyst expectations Full year 2025 results: EPS: NZ$0.14 (down from NZ$0.17 in FY 2024). Revenue: NZ$3.73b (down 3.5% from FY 2024). Net income: NZ$252.0m (down 20% from FY 2024). Profit margin: 6.8% (down from 8.2% in FY 2024). The decrease in margin was driven by lower revenue. Revenue missed analyst estimates by 1.5%. Earnings per share (EPS) also missed analyst estimates by 2.1%. Revenue is forecast to stay flat during the next 3 years compared to a 3.1% growth forecast for the Telecom industry in Oceania. Over the last 3 years on average, earnings per share has fallen by 43% per year but the company’s share price has only fallen by 22% per year, which means it has not declined as severely as earnings. Announcement • Aug 14
Secure Asset Fund, managed by Pacific Equity Partners Pty Limited entered into an agreement to acquire 75% stake in Data Centre Business from Spark New Zealand Limited (NZSE:SPK) for approximately NZD 580 million. Secure Asset Fund, managed by Pacific Equity Partners Pty Limited entered into an agreement to acquire 75% stake in Data Centre Business from Spark New Zealand Limited (NZSE:SPK) for approximately NZD 580 million on August 12, 2025. A cash consideration of NZD 486 million will be paid by Pacific Equity Partners Pty Limited. Pacific Equity Partners Pty Limited will pay an earnout/contingent payment of NZD 98 million cash. As part of consideration, NZD 584 million is paid towards business division of Data Centre Business of Pacific Equity Partners Pty Limited. Spark New Zealand will retain 25% stake to continuing to participate in the growing market. The transaction values the data Centre business at up to NZD 705 million.
As part of the transaction, Spark will move its data Centre assets and operations into a new stand-alone company that is currently being referred to as ‘DC Co’, which will have its own Board, management team and debt financing facilities.
The transaction is subject to regulatory and customary consents including Overseas Investment Office approval.
The expected completion of the transaction is December 31, 2025. Proceeds will be used to reduce group net debt.
Jarden Securities Limited acted as financial advisor for Spark New Zealand Limited. RBC Capital Markets, Australia acted as financial advisor to Pacific Equity Partners Pty Limited. Announcement • Jun 12
KKR Reportedly Among Parties Doing Sums on Spark Buyout It is only a stake in its data centres that Spark New Zealand Limited (NZSE:SPK) has up for sale, but that does not appear to be deterring parties from weighing a deal to buy the entire $4 billion telecommunications provider. DataRoom can reveal that New York-based private equity powerhouse KKR & Co. Inc. (NYSE:KKR) has been considering a buyout of the entire company in recent months, as investment bank Jarden runs a process to sell a 50% stake in its data centres, with the half share valued at about NZD 400 million ($370 million). Spark, which was spawned out of government-owned entity Telecom, is New Zealand's version of Telstra - the nation's dominant telecommunications provider. First-round offers for the data centres were due last week, and infrastructure funds are conspicuously missing from the auction. But all the focus now from market insiders is on the parties considering a buyout proposal for Spark and whether a bid in fact eventuates. It is understood that there has been at least one private equity firm circling. Another logical suitor would be Swedish private equity firm EQT. Big infrastructure funds are not looking at the centres, sources say. Sources say data centre operator Next DC is taking a look, as is Global Data Centre Group. Announcement • May 20
Spark of Interest as Private Equity Reportedly Looks At Buyout The $3.7 billion Australia and New Zealand listed telecoms company Spark New Zealand Limited (NZSE:SPK) is understood to have at least two private equity firms running the ruler over the business for a buyout proposal. It comes as the group has an auction afoot through Jarden for its data centre assets, with hopes that they may fetch a price of about $800 million. DataRoom understands that buyout funds with expertise in telecommunication businesses are doing work on whether to make an offer for the largest telco across the Tasman that was previously owned by the New Zealand government. Funds that have experience running telcos abroad and previously bid for Australian telco Vocus when it was listed included Kohlberg Kravis Roberts and EQT, along with private equity firm Affinity. Brookfield is not a contender, but BGH Capital may be looking, along with TPG Capital, although some observers believe the business would be too operational for those parties. Well-connected sources believe any suitor would likely take the view that a deal could stack up at NZD 2.50, but not at NZD 3, so that means its share price would need to fall below NZD 2 - it's currently trading around NZD 2.18, or $2 in Australia. Yet Spark remains under pressure with large levels of debt (net debt was at almost NZD 1.7 billion at December), and it is a situation which has prompted the group to sell its capital-intensive data centres. Should it fail to achieve its price ambitions, an equity raising may need to occur, which could come at a deep discount, pushing its share price lower. Also in question is how long chairman Justine Smythe remains, with suggestions surfacing that her departure could be imminent. Australian-listed telecoms giant Telstra is understood to have weighed an acquisition of New Zealand counterpart Spark in recent years, sources say. However, it is understood to have passed on the opportunity, determining it was not the right priority for the No.1-listed Australian telco player, which has about 40% of the local market share. Some private equity firms have also shied away, not wanting such a large exposure to the New Zealand market. Also, some industry operatives question where the value will be for a private equity buyer, with many of the costs recently stripped out. But others believe in private hands, operatives can substantially lift the financial performance. A buyout fund would also need to consider what its sale options would be in future years, with another listing its likely only option, as Asian telcos are also adverse to major New Zealand investment. Announcement • May 12
Interest in Spark Lights Up Stonepeak Partners LP appears to be continuing its unrelenting march when it comes to investing in the Australian and New Zealand infrastructure space, with the global group believed to be weighing a move to buy Spark New Zealand Limited (NZSE:SPK)'s data centre portfolio that may sell for about $800 million. The US infrastructure investor that counts former Macquarie banker Darren Keogh in its top ranks is considering a purchase of Australia's largest diagnostic imaging provider, I-Med, and recently fended off competition from Williams and GIP to acquire a 40% interest in Woodside's Louisiana-based LNG Infrastructure. Stonepeak is listed in New York with more than $50 billion of assets under management and it joins groups like Canadian pension fund CDPQ and private equity firms like KKR, EQT and Pacific Equity Partners in considering a purchase of the assets across the Tasman. The data centres are up for sale through Jarden. The process has launched but is in its early stages as Spark seeks to get money through the door to pay down debt. Recent Insider Transactions • Apr 09
Independent Chairman of the Board recently bought NZ$410k worth of stock On the 3rd of April, Justine Gay Smyth bought around 200k shares on-market at roughly NZ$2.05 per share. This trade did not impact their existing holding. This was the largest purchase by an insider in the last 3 months. Justine Gay has been a buyer over the last 12 months, purchasing a net total of NZ$840k worth in shares. Upcoming Dividend • Mar 13
Upcoming dividend of NZ$0.14 per share Eligible shareholders must have bought the stock before 20 March 2025. Payment date: 04 April 2025. The company is paying out more than 100% of its earnings and cash flow. Trailing yield: 13%. Within top quartile of New Zealander dividend payers (6.3%). Higher than average of industry peers (5.1%). New Risk • Mar 07
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of New Zealander stocks, typically moving 6.2% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Dividend is not well covered by earnings and cash flows. Payout ratio: 249% Cash payout ratio: 204% Minor Risks High level of debt (123% net debt to equity). Share price has been volatile over the past 3 months (6.2% average weekly change). Profit margins are more than 30% lower than last year (5.1% net profit margin). Announcement • Feb 28
Caisse de dépôt et placement du Québec completed the acquisition of 50% stake in Connexa Limited from Ontario Teachers' Pension Plan Board and Spark New Zealand Limited (NZSE:SPK). Caisse de dépôt et placement du Québec agreed to acquire 50% stake in Connexa Limited from Ontario Teachers' Pension Plan Board and Spark New Zealand Limited (NZSE:SPK) for approximately AUD 310 million on December 12, 2024. A cash consideration of AUD 314 million will be paid by Caisse de dépôt et placement du Québec. As part of consideration, AUD 314 million is paid towards common equity of Connexa Limited. On completion of the transaction, Ontario Teachers’ and CDPQ will each hold a 50% co-controlling interest in Connexa.
Under the terms of the deal, Spark will remain a key customer of Connexa. Spark will continue to determine how its mobile network is developed, including where and when capacity investments occur, with Connexa then designing and deploying these build programmes. Spark will also continue to own all the 'smarts' of the network – such as radio equipment and spectrum.
The transaction is subject to approval by regulatory board / committee. The expected completion of the transaction is July 1, 2025 to September 30, 2025.
BofA acted as the exclusive financial adviser to Ontario Teachers' Pension Plan Board. Allens and Russell McVeagh acted as legal advisor to Caisse de dépôt et placement du Québec. The Allens legal team was led by Tom Story and Gavin Smith.
Caisse de dépôt et placement du Québec completed the acquisition of 50% stake in Connexa Limited from Ontario Teachers' Pension Plan Board and Spark New Zealand Limited (NZSE:SPK) on February 28, 2025.
As of February 28, 2025, regulatory approval has been received. Major Estimate Revision • Feb 28
Consensus EPS estimates fall by 24% The consensus outlook for fiscal year 2025 has been updated. 2025 EPS estimate fell from NZ$0.181 to NZ$0.137 per share. Revenue forecast steady at NZ$3.75b. Net income forecast to grow 38% next year vs 36% growth forecast for Telecom industry in New Zealand. Consensus price target down from NZ$3.62 to NZ$3.10. Share price fell 23% to NZ$2.27 over the past week. Buy Or Sell Opportunity • Feb 26
Now 20% undervalued after recent price drop Over the last 90 days, the stock has fallen 23% to NZ$2.26. The fair value is estimated to be NZ$2.82, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has declined by 19%. For the next 3 years, revenue is forecast to grow by 0.8% per annum. Earnings are also forecast to grow by 11% per annum over the same time period. Declared Dividend • Feb 24
First half dividend of NZ$0.14 announced Shareholders will receive a dividend of NZ$0.14. Ex-date: 20th March 2025 Payment date: 4th April 2025 Dividend yield will be 13%, which is higher than the industry average of 4.7%. Sustainability & Growth Dividend is not covered by earnings (249% earnings payout ratio) nor is it covered by cash flows (204% cash payout ratio). The dividend has increased by an average of 4.5% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. The company's earnings per share (EPS) would need to grow by 177% to bring the payout ratio under control. EPS is expected to grow by 34% over the next 3 years, which means the dividend may need to be reduced to reach a sustainable payout ratio. Reported Earnings • Feb 24
First half 2025 earnings released: EPS: NZ$0.019 (vs NZ$0.086 in 1H 2024) First half 2025 results: EPS: NZ$0.019 (down from NZ$0.086 in 1H 2024). Revenue: NZ$1.94b (down 1.9% from 1H 2024). Net income: NZ$35.0m (down 78% from 1H 2024). Profit margin: 1.8% (down from 7.9% in 1H 2024). The decrease in margin was primarily driven by higher expenses. Revenue is forecast to stay flat during the next 3 years compared to a 3.4% growth forecast for the Telecom industry in Oceania. Over the last 3 years on average, earnings per share has fallen by 19% per year and the company’s share price has also fallen by 19% per year. Price Target Changed • Feb 22
Price target decreased by 8.8% to NZ$3.31 Down from NZ$3.62, the current price target is an average from 8 analysts. New target price is 39% above last closing price of NZ$2.38. Stock is down 54% over the past year. The company is forecast to post earnings per share of NZ$0.18 for next year compared to NZ$0.17 last year. Announcement • Feb 21
Spark New Zealand Limited Estimates Ordinary Dividend for the Period of Six Months Ended December 31, 2024, Payable on April 4, 2025 Spark New Zealand Limited estimated ordinary fully paid foreign exempt dividend of NZD 0.14154412 per security for the period of six months ended December 31, 2024. Record Date is March 21, 2025; Ex Date is March 20, 2025; Payment Date is April 4, 2025. Valuation Update With 7 Day Price Move • Feb 21
Investor sentiment deteriorates as stock falls 18% After last week's 18% share price decline to NZ$2.38, the stock trades at a forward P/E ratio of 13x. Average forward P/E is 31x in the Telecom industry in Oceania. Total loss to shareholders of 36% over the past three years. Price Target Changed • Dec 19
Price target decreased by 7.0% to NZ$3.63 Down from NZ$3.90, the current price target is an average from 8 analysts. New target price is 26% above last closing price of NZ$2.87. Stock is down 44% over the past year. The company is forecast to post earnings per share of NZ$0.18 for next year compared to NZ$0.17 last year. Announcement • Dec 12
Caisse de dépôt et placement du Québec agreed to acquire 50% stake in Connexa Limited from Ontario Teachers' Pension Plan Board and Spark New Zealand Limited (NZSE:SPK) for approximately AUD 310 million. Caisse de dépôt et placement du Québec agreed to acquire 50% stake in Connexa Limited from Ontario Teachers' Pension Plan Board and Spark New Zealand Limited (NZSE:SPK) for approximately AUD 310 million on December 12, 2024. A cash consideration of AUD 314 million will be paid by Caisse de dépôt et placement du Québec. As part of consideration, AUD 314 million is paid towards common equity of Connexa Limited. On completion of the transaction
Ontario Teachers’ and CDPQ will each hold a 50% co-controlling interest in Connexa.
Under the terms of the deal, Spark will remain a key customer of Connexa. Spark will continue to determine how its mobile network is developed, including where and when capacity investments occur, with Connexa then designing and deploying these build programmes. Spark will also continue to own all the 'smarts' of the network – such as radio equipment and spectrum.
The transaction is subject to approval by regulatory board / committee. The expected completion of the transaction is July 1, 2025 to September 30, 2025.
BofA acted as the exclusive financial adviser to Ontario Teachers' Pension Plan Board. Announcement • Nov 26
Spark New Zealand Limited Appoints Stewart Taylor as Chief Financial Officer, Effective 9 December 2024 Spark New Zealand Limited announced the appointment of Stewart Taylor as Chief Financial Officer, effective 9 December 2024. Stewart has over 25 years' experience across a range of finance and executive roles in the financial services sector. He was most recently Chief Financial Officer at Partners Life, where he worked with private equity firm Blackstone on the sale and transition of ownership of the business to Dai-ichi Life Holdings. This followed a substantial 15-year career at ANZ New Zealand, including as Chief Financial Officer for over four years and Chief Executive Officer of ANZ Investments, along with a series of other senior finance roles. Stewart is a Chartered Accountant, holds a Bachelor of Arts in Economics from the University of Durham, and is a graduate of the Australian Institute of Company Directors. As previously announced, outgoing Finance Director Stefan Knight will depart the business on 20 December 2024. Once the changes are effective the Spark Leadership Squad will include: Jolie Hodson, CEO, Stewart Taylor, Chief Financial Officer, Mark Beder, Customer Director Enterprise and Government, Greg Clark, SME and Consumer Director, Matt Bain, Marketing Director, Renee Mateparae, Network and Operations Director, Heather Polglase, People and Culture Director, Melissa Anastasiou, General Counsel, Leela Ashford, Corporate Relations and Sustainability Director, John Wesley-Smith, Strategy and Regulatory Director. Price Target Changed • Nov 01
Price target decreased by 8.1% to NZ$4.01 Down from NZ$4.36, the current price target is an average from 8 analysts. New target price is 38% above last closing price of NZ$2.91. Stock is down 43% over the past year. The company is forecast to post earnings per share of NZ$0.19 for next year compared to NZ$0.17 last year. Announcement • Aug 30
Spark New Zealand Limited Announces Board Changes Spark New Zealand Chair Justine Smyth announced that Alison Barrass will not be seeking re-election at Spark's Annual Meeting of Shareholders on 1 November 2024, and will be stepping down from the Spark Board, effective from the close of the meeting. Alison is currently Chair of the Human Resources and Compensation Committee, and sits on the Nominations and Corporate Governance Committee. Major Estimate Revision • Aug 30
Consensus EPS estimates fall by 15% The consensus outlook for earnings per share (EPS) in fiscal year 2025 has deteriorated. 2025 revenue forecast decreased from NZ$4.01b to NZ$3.81b. EPS estimate also fell from NZ$0.238 per share to NZ$0.203 per share. Net income forecast to grow 17% next year vs 37% growth forecast for Telecom industry in New Zealand. Consensus price target down from NZ$4.89 to NZ$4.63. Share price fell 14% to NZ$3.68 over the past week. Declared Dividend • Aug 26
Final dividend of NZ$0.16 announced Shareholders will receive a dividend of NZ$0.16. Ex-date: 12th September 2024 Payment date: 4th October 2024 Dividend yield will be 8.4%, which is higher than the industry average of 4.7%. Sustainability & Growth Dividend is not covered by earnings (159% earnings payout ratio) nor is it covered by cash flows (310% cash payout ratio). The dividend has increased by an average of 4.5% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. The company's earnings per share (EPS) would need to grow by 76% to bring the payout ratio under control. EPS is expected to grow by 26% over the next 3 years, which means the dividend may need to be reduced to reach a sustainable payout ratio. Reported Earnings • Aug 23
Full year 2024 earnings: EPS and revenues miss analyst expectations Full year 2024 results: EPS: NZ$0.17 (down from NZ$0.61 in FY 2023). Revenue: NZ$3.86b (down 14% from FY 2023). Net income: NZ$316.0m (down 72% from FY 2023). Profit margin: 8.2% (down from 25% in FY 2023). The decrease in margin was primarily driven by lower revenue. Revenue missed analyst estimates by 1.7%. Earnings per share (EPS) also missed analyst estimates by 24%. Revenue is forecast to grow 2.0% p.a. on average during the next 3 years, compared to a 3.3% growth forecast for the Telecom industry in Oceania. Over the last 3 years on average, earnings per share has increased by 16% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. Announcement • May 06
Spark New Zealand Limited Reaffirms Dividend Guidance for the Full Year 2024 Spark New Zealand Limited reaffirmed dividend guidance for the full year 2024. For the period, the company expected dividend of 27.5 cents per share compared to previous guidance of 27.5 cents per share. Announcement • Mar 29
Spark New Zealand Limited (NZSE:SPK) announces an Equity Buyback for 33,659,451 shares, representing 5% for NZD 45 million. Spark New Zealand Limited (NZSE:SPK) announces a share repurchase program. Under the plan, the company will repurchase up to 33,659,451 shares, representing 5% of issued share capital for NZD 45 million. The repurchased shares will be cancelled. The program will be valid for 12 months. Upcoming Dividend • Mar 14
Upcoming dividend of NZ$0.16 per share Eligible shareholders must have bought the stock before 21 March 2024. Payment date: 05 April 2024. The company is paying out more than 100% of its earnings and cash flow. Trailing yield: 5.4%. Lower than top quartile of New Zealander dividend payers (6.8%). In line with average of industry peers (5.0%). Declared Dividend • Mar 01
First half dividend of announced Shareholders will receive a dividend of . Sustainability & Growth Dividend is not covered by earnings (117% earnings payout ratio) nor is it covered by cash flows (335% cash payout ratio). The dividend has increased by an average of 5.4% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. The company's earnings per share (EPS) would need to grow by 30% to bring the payout ratio under control. EPS is expected to grow by 14% over the next 3 years, which means the dividend may need to be reduced to reach a sustainable payout ratio. Reported Earnings • Mar 01
First half 2024 earnings: EPS and revenues miss analyst expectations First half 2024 results: EPS: NZ$0.086 (down from NZ$0.45 in 1H 2023). Revenue: NZ$1.98b (down 22% from 1H 2023). Net income: NZ$157.0m (down 81% from 1H 2023). Profit margin: 7.9% (down from 33% in 1H 2023). The decrease in margin was primarily driven by lower revenue. Revenue missed analyst estimates by 1.5%. Earnings per share (EPS) also missed analyst estimates by 9.5%. Revenue is forecast to grow 2.7% p.a. on average during the next 3 years, compared to a 3.3% growth forecast for the Telecom industry in Oceania. Over the last 3 years on average, earnings per share has increased by 31% per year but the company’s share price has only increased by 3% per year, which means it is significantly lagging earnings growth. New Risk • Feb 29
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 11% Last year net profit margin: 24% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Major Risk Dividend is not well covered by earnings and cash flows. Payout ratio: 117% Cash payout ratio: 335% Minor Risks High level of debt (89% net debt to equity). Profit margins are more than 30% lower than last year (11% net profit margin). Announcement • Dec 20
Spark New Zealand Limited, Annual General Meeting, Nov 01, 2024 Spark New Zealand Limited, Annual General Meeting, Nov 01, 2024. Announcement • Oct 18
Spark New Zealand Limited (NZSE:SPK) signed a conditional agreement to acquire remaining 53% stake in Adroit Group of Companies. Spark New Zealand Limited (NZSE:SPK) signed a conditional agreement to acquire remaining 53% stake in Adroit Group of Companies on October 17, 2023. Announcement • Sep 22
Spark New Zealand Announces Board Changes Spark New Zealand Chair Justine Smyth announced that Charles Sitch has decided to step down from the Spark Board, effective from the close of Spark's Annual Meeting of Shareholders on 3 November 2023. Charles has been a Director on the Spark Board since 2011 and is currently Chair of the Audit Risk Management Committee. Gordon MacLeod has been appointed Chair of the Audit Risk Management Committee, effective from the close of the Annual Meeting of Shareholders on 3 November 2023. Announcement • Sep 21
Spark New Zealand Limited Announces Dividend for the Six Months Ended June 30, 2023, Payable on October 6, 2023 Spark New Zealand Limited announced ordinary dividend of NZD 0.15882353 per security for the six months ended June 30, 2023. Record Date is September 15, 2023; Ex Date is September 14, 2023; Payment Date is October 6, 2023. Upcoming Dividend • Sep 07
Upcoming dividend of NZ$0.16 per share at 5.5% yield Eligible shareholders must have bought the stock before 14 September 2023. Payment date: 06 October 2023. Payout ratio is a comfortable 44% but the company is paying out more than the cash it is generating. Trailing yield: 5.5%. Lower than top quartile of New Zealander dividend payers (6.2%). In line with average of industry peers (5.1%). New Risk • Aug 19
New minor risk - Financial position The company has a high level of debt. Net debt to equity ratio: 54% This is considered a minor risk. Having a high level of debt increases the company's balance sheet risk. The company has a higher interest repayment burden, leading to the need to allocate a greater amount of its earnings towards servicing the debt, potentially limiting growth options or shareholder distributions. It can also increase the risk of bankruptcy if business conditions deteriorate enough that the company can no longer meet its debt obligations. Currently, the following risks have been identified for the company: Major Risks Earnings are forecast to decline by an average of 19% per year for the foreseeable future. High level of non-cash earnings (28% accrual ratio). Minor Risks High level of debt (54% net debt to equity). Dividend is not well covered by cash flows (161% cash payout ratio). Reported Earnings • Aug 18
Full year 2023 earnings: EPS and revenues exceed analyst expectations Full year 2023 results: EPS: NZ$0.61 (up from NZ$0.22 in FY 2022). Revenue: NZ$4.49b (up 21% from FY 2022). Net income: NZ$1.14b (up 177% from FY 2022). Profit margin: 25% (up from 11% in FY 2022). The increase in margin was driven by higher revenue. Revenue exceeded analyst estimates by 17%. Earnings per share (EPS) also surpassed analyst estimates by 26%. Revenue is expected to decline by 1.0% p.a. on average during the next 3 years, while revenues in the Telecom industry in Oceania are expected to grow by 3.3%. Over the last 3 years on average, earnings per share has increased by 42% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Announcement • Jul 23
Spark Appoints John Wesley-Smith as Strategy and Regulatory Director, Effective from 1 August 2023 Spark announced the appointment of John Wesley-Smith to the role of Strategy and Regulatory Director, which will form part of the Leadership Squad from 1 August 2023. John joined Spark in 2005 and is currently Regulatory and Industry Affairs Lead. Having led the company's regulatory team for the last 14 years, John has significant knowledge of the sector and the drivers of value within it. He has also played a pivotal role in Spark's major capital investments and transactions, including the recent sale of a majority stake in the company's passive mobile infrastructure assets. From 1 August, the Spark Leadership Squad will be as follows: Jolie Hodson, CEO, Melissa Anastasiou, General Counsel, Matt Bain, Marketing Director, Mark Beder, Customer Director Enterprise and Government, Greg Clark, SME and Consumer Director, Leela Gantman, Corporate Relations and Sustainability Director, Stefan Knight, Finance Director, Renee Mateparae, Network and Operations Director, Heather Polglase, People and Culture Director, Tessa Tierney, Product Director, John Wesley-Smith, Strategy and Regulatory Director. Announcement • Jun 23
Spark New Zealand Appoints Renee Mateparae to the Role of Network and Operations Director, Effective from 1 July 2023 Spark New Zealand announced the appointment of Renee Mateparae to the role of Network and Operations Director, which is part of Spark's Leadership Squad. Spark previously announced Leadership Squad changes in March, with the creation of two Customer Director roles that will provide greater focus on both the enterprise and small-medium business segments of the market. As a result of these changes Spark announced its intention to complete a search process for the Network and Operations Director role. Renee brings with her a broad depth of experience that spans leadership roles across Spark and other large New Zealand businesses. Renee joined Spark in 2017 and is currently Technology Evolution Tribe Lead - responsible for Spark's emerging technology development, including the roll-out of its 5G and IoT networks. Prior to joining Spark, Renee was Head of Product Strategy at BNZ and spent five years at Air New Zealand, working across a variety of senior strategy roles. In 2019 Renee was appointed to the board of The Warehouse Group for a two-year term as part of the Future Directors programme. Renee will join the Leadership Squad from 1 July 2023. From that time, the Spark Leadership Squad will be as follows: Jolie Hodson, CEO, Melissa Anastasiou, General Counsel, Matt Bain, Marketing Director, Mark Beder, Customer Director Enterprise and Government, Greg Clark, SME and Consumer Director, Leela Gantman, Corporate Relations and Sustainability Director, Stefan Knight, Finance Director, Renee Mateparae, Network and Operations Director, Heather Polglase, People and Culture Director and Tessa Tierney, Product Director. Recent Insider Transactions • May 31
Marketing Director recently sold NZ$236k worth of stock On the 26th of May, Matthew Bain sold around 45k shares on-market at roughly NZ$5.25 per share. This transaction amounted to 70% of their direct individual holding at the time of the trade. This was the largest sale by an insider in the last 3 months. Insiders have been net sellers, collectively disposing of NZ$527k more than they bought in the last 12 months. Major Estimate Revision • Apr 21
Consensus EPS estimates increase by 22% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate increased from NZ$0.396 to NZ$0.484. Revenue forecast unchanged at NZ$3.94b. Net income forecast to shrink 44% next year vs 31% growth forecast for Telecom industry in New Zealand . Consensus price target of NZ$5.14 unchanged from last update. Share price was steady at NZ$5.11 over the past week. Recent Insider Transactions • Apr 13
General Counsel recently sold NZ$51k worth of stock On the 11th of April, Melissa Anastasiou sold around 10k shares on-market at roughly NZ$5.06 per share. This transaction amounted to 10% of their direct individual holding at the time of the trade. This was the largest sale by an insider in the last 3 months. Insiders have been net sellers, collectively disposing of NZ$339k more than they bought in the last 12 months. 
