TeamTalk tables new strategy after review
The board and management of TeamTalk, the telecommunications network company, have said it's undervalued and a new strategy will unlock "significant value for shareholders", though a resumption of dividends is some way off.
In August, TeamTalk hired investment bank Cameron Partners for a strategic review, just after appointing a new chief executive, former Alcatel-Lucent NZ boss Andrew Miller, who started in early September.
"Their initial analysis indicated that the company's existing plan was not reflected in the current depressed share price for a number of reasons and that there existed a range of opportunities to add significant value to the firm," Miller said at the company's annual meeting in Wellington on Wednesday.
Miller said the strategy would integrate TeamTalk's three business units - broadband service CityLink, rural broadband provider Farmside, and TeamTalk Wireless - to cut costs and deliver better outcomes for customers and shareholders.
Two significant capital expenditure requirements it's facing are Farmside's satellite customer migration to the new Optus service, and the need to migrate parts of its CityLink Wellington fibre network off the city's trolley bus infrastructure.
TeamTalk's chair, Roger Sowry, said the business had got inquiries over the past six months and had some ongoing discussions with firms interested in partnership.
"There have also been some unsolicited and opportunistic inquiries whether parts, or all, of TeamTalk may be for sale. This has helped us to understand, and inform our strategic options," Sowry said.
The company's shares slumped to a record low in June this year after it downgraded earnings guidance and said it wouldn't pay a final dividend for 2016 as its 2012 purchase of Farmside continues to suck up capital.
On Wednesday Sowry said the board's 2017 priority was to return to a profit, reduce debt and meet capital requirements, and it would consider resuming dividends as soon as that was done.
The shares were unchanged at 41 cents, and have dropped 44 percent this year.