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SPK

Spark New Zealand Reaffirms FY20 Guidance In Light Of COVID-19

Max Molinari

Max is an Equity Analyst with ASR Wealth Advisers. He has studied a Bachelor of Business and a Bachelor of Laws at the University of Technology, Sydney. Max currently holds RG146 qualifications.

Spark New Zealand (ASX: SPK) has reaffirmed its FY20 guidance in light of the Covid-19 outbreak. The business confirms full-year EBITDAI (earnings before interest, tax, depreciation, amortization and investment income) of $1.1m – 1.12m. Consensus is currently expecting this number to be in the bottom end of this range, therefore we can see some upside from here. Being a defensive business, there is more earnings visibility even during times like these. Furthermore, it has also declared a full-year dividend of 25c, while the market expects 24c (> 75% franked).

SPK

Spark New Zealand (ASX: SPK) has reaffirmed its FY20 guidance of EBITDAI in the $1.1m - $1.12m range, as well as declaring a full year dividend of 25c per share. (Source: smallcaps.com)


That being said, SPK notes it is not immune from Covid-19 – the impacts have only materialized in the final quarter of FY20 (based on information known today). Depending on how things proceed, there could be more impacts to FY21. As of now, broadband usage has increased significantly, while retail stores remain closed.

CEO Jolie Hodson commented on the position of SPK amongst the chaos of the COVID-19 pandemic,

As an essential services provider, we must ensure we are sustainable over the long-term so we can keep New Zealand connected, help to close the digital divide, and support the transition to new ways of working. 


The market reacted favourably to the news with the stock rallying 3.2% at market open, compared to a 2% fall from the ASX 200 (ASX: XJO).

 


Disclaimer:


This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).
This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.
ASR has no position in any of the stocks mentioned.

 

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