New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul>
<li>Spark (SPK) delivered a solid result in-line with guidance and expectations.</li>
<li>Likewise its FY24 guidance for both dividends and EBITDAI was in-line with our forecasts.</li>
<li>We see it as a sound result that should support the stock price around current levels. </li>
</ul>


Spark (SPK) delivered a solid result in-line with guidance and expectations.
Likewise its FY24 guidance for both dividends and EBITDAI was in-line with our forecasts.
We see it as a sound result that should support the stock price around current levels. 


Spark NZ - FY23 Result — Delivered the Cake but No Icing

<ul><li>Spark NZ (SPK) will report its FY23 result on Friday, 18 August.</li><li>It has guided for FY23 EBITDAI to be at the lower end of NZ$1,185m to NZ$1,225m.</li><li>The guidance implies a strong 2H23, with EBITDAI up +10% vs 2H22 even at the very low end. </li></ul>

Spark NZ (SPK) will report its FY23 result on Friday, 18 August.It has guided for FY23 EBITDAI to be at the lower end of NZ$1,185m to NZ$1,225m.The guidance implies a strong 2H23, with EBITDAI up +10% vs 2H22 even at the very low end. 

Spark NZ - FY23 Preview — Clouds on the Horizon

<ul><li>The curse of the incumbent; SPK will likely experience significant cloud headwinds for several years to come</li><li>Free cash flow declining again thanks to growth capex: SPK has delivered admirable growth in free cash flow over the last five years and are back to growing its dividends.</li><li>Mobile still strong — but easy wins from One NZ are likely behind us as One NZ has improved its service levels </li></ul>

The curse of the incumbent; SPK will likely experience significant cloud headwinds for several years to comeFree cash flow declining again thanks to growth capex: SPK has delivered admirable growth in free cash flow over the last five years and are back to growing its dividends.Mobile still strong — but easy wins from One NZ are likely behind us as One NZ has improved its service levels 

Spark NZ: Running Fast, Moving Slow; Down to NEUTRAL

<ul><li>Key financial metrics in-line with our forecasts, apart from more near-term capex: SPK is targeting between +2% and +4% revenue growth per annum from FY24–FY26 (FB; +2.9%).</li><li>Price pressure in fixed broadband and private cloud likely dampening the outlook: Over the last six years SPK's voice gross profit has declined from nearly ~25% of the group to ~7%.</li><li>MATTR — the highlight of the day: SPK aims for its high-tech growth opportunities to generate NZ$100m–150m in revenue by FY26.</li></ul>

Key financial metrics in-line with our forecasts, apart from more near-term capex: SPK is targeting between +2% and +4% revenue growth per annum from FY24–FY26 (FB; +2.9%).Price pressure in fixed broadband and private cloud likely dampening the outlook: Over the last six years SPK's voice gross profit has declined from nearly ~25% of the group to ~7%.MATTR — the highlight of the day: SPK aims for its high-tech growth opportunities to generate NZ$100m–150m in revenue by FY26.

Spark NZ: Underwhelming Targets, Yet Reassuring

<ul><li>Spark (SPK) reported a weak first half result, with every area (apart from mobile) disappointing consensus expectations.</li><li>The largest negative deviation versus our expectations came in cloud, security and service management and "other" (likely primarily attributed to Spark Sport content costs).</li><li>The result did come with a relatively thick silver lining; SPK retained its full year EBITDAI guidance, albeit, with expectations that it would achieve the lower end</li></ul>

Spark (SPK) reported a weak first half result, with every area (apart from mobile) disappointing consensus expectations.The largest negative deviation versus our expectations came in cloud, security and service management and "other" (likely primarily attributed to Spark Sport content costs).The result did come with a relatively thick silver lining; SPK retained its full year EBITDAI guidance, albeit, with expectations that it would achieve the lower end

Spark NZ: 1H23 — Ugly Result With a Thick Silver Lining

New Zealand

Spark New Zealand Limited (formerly Telecom Corporation of New Zealand Limited) provides digital communications, entertainment and IT services over its networks and the Cloud to New Zealanders and businesses. The Company's strategy is focused on mobility, data and effortless service, and cost.

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Spark New Zealand (SPK NZ)

Spark NZ - FY23 Result — Delivered the Cake but No Icing

Spark (SPK) delivered a solid result in-line with guidance and expectations. Likewise its FY24 guidance for both dividends and EBITDAI was in-line...

Forsyth Barr

Spark NZ - FY23 Preview — Clouds on the Horizon

Spark NZ (SPK) will report its FY23 result on Friday, 18 August. It has guided for FY23 EBITDAI to be at the lower end of NZ$1,185m to NZ$1,225m.

Forsyth Barr

Spark NZ: Running Fast, Moving Slow; Down to NEUTRAL

Over the last five years Spark (SPK) has delivered an EBITDA CAGR of ~+4%. The key drivers have been; (1) cost out and (2) strong mobile pricing...

Forsyth Barr

Spark NZ: Underwhelming Targets, Yet Reassuring

Spark (SPK) held its triennial strategy day with a focus on how its technology capabilities enable it to grow new and sustainable digital...

Forsyth Barr

Spark NZ: 1H23 — Ugly Result With a Thick Silver Lining

Spark (SPK) reported a weak first half result, with every area (apart from mobile) disappointing consensus expectations; the result did come with a...

Forsyth Barr

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