Sharechat Logo

TeamTalk shares slump to record low on lack of dividend, earnings downgrade

Monday 13th June 2016

Text too small?

TeamTalk shares slumped to a record low after the telecommunications network company downgraded earnings guidance and said it won't pay a final dividend this year as its 2012 purchase of rural broadband provider Farmside continues to suck up capital. 

The shares fell as low as 48 cents, and were recently down 18 percent at 49 cents, adding to the 11 percent slide on Friday when Wellington-based TeamTalk said second-half earnings hadn't met expectations. The stock rose as high as $3.20 in early 2013, after the Farmside purchase settled, but has steadily dropped as it struggled to integrate the rural internet service provider into its existing business. 

The company said earnings before interest, tax depreciation and amortisation would be "slightly down" on the $6.4 million posted in the first half, and that it wouldn't pay the 4 cents per share final dividend previously flagged due to "substantial capital requirements" and the desire to give the incoming chief executive more flexibility for the company. 

On Friday, TeamTalk said it signed a multi-year contract with Optus Satellite to provide improved internet speeds via satellite which would have a "negative impact" on its accounts requiring several million dollars of capital expenditure over six months.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports