NZSE:SPK

Stock Analysis Report

Executive Summary

Spark New Zealand Limited, together with its subsidiaries, provides telecommunications and digital services in New Zealand.

Snowflake

Fundamentals

Proven track record and slightly overvalued.


Similar Companies

Share Price & News

How has Spark New Zealand's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.7%

SPK

0.09%

NZ Telecom

1.1%

NZ Market


1 Year Return

15.1%

SPK

7.2%

NZ Telecom

19.1%

NZ Market

Return vs Industry: SPK exceeded the NZ Telecom industry which returned 7.2% over the past year.

Return vs Market: SPK underperformed the NZ Market which returned 19.1% over the past year.


Shareholder returns

SPKIndustryMarket
7 Day0.7%0.09%1.1%
30 Day-0.7%0.06%2.9%
90 Day14.2%-2.7%2.5%
1 Year23.6%15.1%11.7%7.2%24.3%19.1%
3 Year58.7%26.5%-9.0%-22.8%55.8%35.5%
5 Year112.4%44.4%-1.9%-24.9%101.8%56.4%

Price Volatility Vs. Market

How volatile is Spark New Zealand's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Spark New Zealand undervalued compared to its fair value and its price relative to the market?

12.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SPK (NZ$4.49) is trading below our estimate of fair value (NZ$5.11)

Significantly Undervalued: SPK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SPK is good value based on its PE Ratio (20.2x) compared to the Telecom industry average (34.2x).

PE vs Market: SPK is poor value based on its PE Ratio (20.2x) compared to the NZ market (18.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: SPK is poor value based on its PEG Ratio (5.2x)


Price to Book Ratio

PB vs Industry: SPK is overvalued based on its PB Ratio (5.6x) compared to the XO Telecom industry average (2.5x).


Next Steps

Future Growth

How is Spark New Zealand forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

3.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPK's forecast earnings growth (3.9% per year) is above the savings rate (2.4%).

Earnings vs Market: SPK's earnings (3.9% per year) are forecast to grow slower than the NZ market (7% per year).

High Growth Earnings: SPK's earnings are forecast to grow, but not significantly.

Revenue vs Market: SPK's revenue (0.5% per year) is forecast to grow slower than the NZ market (4.2% per year).

High Growth Revenue: SPK's revenue (0.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SPK's Return on Equity is forecast to be high in 3 years time (33.2%)


Next Steps

Past Performance

How has Spark New Zealand performed over the past 5 years?

3.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SPK's earnings have grown by 3.3% per year over the past 5 years.

Accelerating Growth: SPK's earnings growth over the past year (12.1%) exceeds its 5-year average (3.3% per year).

Earnings vs Industry: SPK earnings growth over the past year (12.1%) exceeded the Telecom industry -37.6%.


Return on Equity

High ROE: Whilst SPK's Return on Equity (27.92%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: SPK has a higher Return on Assets than the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: SPK's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Spark New Zealand's financial position?


Financial Position Analysis

Short Term Liabilities: SPK's short term assets (NZ$911.0M) do not cover its short term liabilities (NZ$944.0M)

Long Term Liabilities: SPK's short term assets (911.0M) do not cover its long term liabilities (1.7B)


Debt to Equity History and Analysis

Debt Level: SPK's debt to equity ratio (103.2%) is considered high

Reducing Debt: SPK's debt to equity ratio has increased from 42% to 103.2% over the past 5 years.

Debt Coverage: SPK's debt is well covered by operating cash flow (51.4%).

Interest Coverage: SPK's interest payments on its debt are well covered by EBIT (18x coverage).


Balance Sheet

Inventory Level: SPK has a high level of physical assets or inventory.

Debt Coverage by Assets: SPK's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Spark New Zealand's current dividend yield, its reliability and sustainability?

5.57%

Current Dividend Yield


Dividend Yield vs Market

company5.6%marketbottom25%3.0%markettop25%5.6%industryaverage4.2%forecastin3Years5.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SPK's dividend (5.57%) is higher than the bottom 25% of dividend payers in the NZ market (3%).

High Dividend: SPK's dividend (5.57%) is low compared to the top 25% of dividend payers in the NZ market (5.56%).

Stable Dividend: SPK's dividend payments have been volatile in the past 10 years.

Growing Dividend: SPK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (98.8%), SPK's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SPK's dividends in 3 years are not forecast to be well covered by earnings (97.8% payout ratio).


Next Steps

Management

What is the CEO of Spark New Zealand's salary, the management and board of directors tenure and is there insider trading?

1.2yrs

Average management tenure


CEO

Jolie Hodson 0

0.3yrs

Tenure

0

Ms. Jolie Hodson has been an Executive Director of Spark New Zealand Limited since September 23, 2019 and its Chief Executive since July 1, 2019. Ms. Hodson served as Customer Director of Spark New Zealand ...


Management Age and Tenure

1.2yrs

Average Tenure

Experienced Management: SPK's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

2.5yrs

Average Tenure

Experienced Board: SPK's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellNZ$4,020,00011 Feb 19
Capital Research and Management Company
EntityCompany
Shares1,000,000
Max PriceNZ$4.02
SellNZ$11,056,80020 Jan 19
Capital Research and Management Company
EntityCompany
Shares2,720,000
Max PriceNZ$4.07
SellNZ$2,644,03218 Dec 18
The Vanguard Group, Inc.
EntityCompany
Shares614,849
Max PriceNZ$4.30
BuyNZ$166,756,65518 Dec 18
The Vanguard Group, Inc.
EntityCompany
Shares38,511,930
Max PriceNZ$4.33

Ownership Breakdown


Management Team

  • Andrew Pirie

    GM of Corporate Relations

    • Tenure: 0yrs
  • Grant McBeath

    Customer Director

    • Tenure: 0yrs
  • David Chalmers

    Finance Director & CFO

    • Tenure: 3yrs
  • Jolie Hodson

    CEO & Executive Director

    • Tenure: 0.3yrs
  • Silvana Roest

    Company Secretary

    • Tenure: 3.8yrs
  • Melissa Anastasiou

    General Counsel

    • Tenure: 10.8yrs
  • Heather Polglase

    Group Human Resources Director

    • Tenure: 0.08yrs
  • Mark Beder

    Technology Director

    • Tenure: 1.3yrs
  • Matt Bain

    Marketing Director

    • Tenure: 0.9yrs
  • Jeff Latch

    Head of Spark Sport

    • Tenure: 1.2yrs

Board Members

  • Paul Berriman (62yo)

    Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: NZ$161.50k
  • Alison Barrass

    Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: NZ$175.70k
  • Warwick Bray (57yo)

    Non Executive Director

    • Tenure: 0.08yrs
  • Justine Gay Smyth

    Independent Chairman of the Board

    • Tenure: 1.9yrs
    • Compensation: NZ$362.50k
  • Ido Leffler

    Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: NZ$159.30k
  • Charles Sitch

    Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: NZ$164.10k
  • Jolie Hodson

    CEO & Executive Director

    • Tenure: 0.3yrs
  • Pip Greenwood

    Independent Non-Executive Director

    • Tenure: 1.5yrs

Company Information

Spark New Zealand Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Spark New Zealand Limited
  • Ticker: SPK
  • Exchange: NZSE
  • Founded: 1987
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: NZ$8.248b
  • Shares outstanding: 1.84b
  • Website: https://www.sparknz.co.nz

Number of Employees


Location

  • Spark New Zealand Limited
  • Spark City
  • Level 2
  • Auckland
  • 1010
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPKK.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJul 1991
NZTABST (Boerse-Stuttgart)SPONSORED ADRDEEURJul 1991
NZTC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
SPKNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJan 1992
SPKASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
NZTDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
SPKCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
TELCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992

Biography

Spark New Zealand Limited, together with its subsidiaries, provides telecommunications and digital services in New Zealand. It offers telecommunications, information technology, media, and other digital pr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 10:33
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.