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Zintel seeks acquisitions to stem slide in earnings

Tuesday 26th August 2008

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Zintel Group, the telecommunications company whose stock has slid 75% since it began trading in 2003, said it needs to make acquisitions to stem a slide in earnings.

Pretax profit fell for a second straight year in the 12 months ended March 31 to $3.49 million. The company said it expects similar earnings this year.

"We can't achieve significant growth internally, so we must continue to find suitable acquisitions to add revenue and profitability," chairman Nick Gordon told shareholders at their annual meeting today.

Zintel said it faced industry "turmoil" last year, with unbundling of the local loop, the operations separation of Telecom Corp. and a review of mobile termination rates. Industry consolidation has increased, as have rivalry in phone services, it said.

Shares of the company, which trade on the NZAX market, last changed hands unchanged at 27 cents, giving it a market value of $13.6 million.

""We have stepped up acquisition activity and broadened the scope of potential targets," Gordon said.

By Jonathan Underhill

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