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Zintel confirms listing

Monday 10th November 2003

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Home-grown telecommunications service provider Zintel Communications Limited has confirmed that it will be listing on the new NZX Alternative Market on Friday.

Unlike the telco carriers, Zintel doesn't aspire to own and control its own telecommunications network. As a service provider it is instead focused on managing and billing toll-free numbers and distributing Ericsson phone systems to the business market.

Previously quoted on the unlisted board, Zintel is a growth story, with the company's turnover rising tenfold from $3.35 million in 1999 to $35.14 million in the year to March 31. Its earnings before interest, tax and depreciation have grown from $0.69 million to $5.4 million over the same period.

Managing director and chairman, Nick Gordon, says the growth has continued in the present year, with revenue for the six months to September 30 of $20.36 million and net profit before tax of $3.342 million, a gain of 39 % over the corresponding period last year.

The company is debt free and has cash reserves in excess of $3 million. It is looking to grow both organically and through further possible acquisitions.

Gordon says the company's success, since it was formed in 1995 to introduce toll free Word Numbers in New Zealand, has been based on it not having to operate a network or infrastructure. This has allowed Zintel to have a customer rather than an engineering focus. He says the adoption of toll free solutions in New Zealand has fostered the growth of the call centre industry here.

In 2000 the company expanded its operations by buying the New Zealand business of Sweden's Ericsson to form Ericsson Enterprise Systems New Zealand, the same year that it entered Australia, buying a small telecommunications company that is now trading under the Zintel name.

Ericsson Enterprise Systems is the sole New Zealand importer and distributor of Ericsson Enterprise PABX products which it is selling directly to business customers ranging from large corporates and government agencies, to small-medium enterprises (SMEs) throughout New Zealand.

Gordon says the company's Australian operation earned its maiden profit in the March 2003 year and the company is now investing in sales and marketing resources to increase its present 1 per cent share of the Australian toll-free market, which is worth approximately $A600 million a year.

In New Zealand the company has an estimated 8% share of the toll-free market which it has secured against the main players on the basis of its customer service and the strength of its proprietary billing and reporting software, TWINS. TWINS enables customers to better manage and improve the performance of their business.

John Rowley of Macquarie Equities New Zealand Limited, which has sponsored the listing of Zintel on to the NZAX, said the company's listing would provide investors with access to a growth sector of the economy and to a company that had a proven track record of growth.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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