SPK- Spark NZ (TELCO)

[Entrep]

Hi SNOOPY just wanted to say thanks for all the posts in here, they are excellent and very helpful for me.

[kiora]

https://www.goodreturns.co.nz/articl...or+30+Apr+2024
"Forsyth Barr estimated that a Spark share price of below $4.80 between the 17th and 30th of April would likely trigger the EBOS exit from the ACWI. Funnily enough the Spark share price does indeed slump below that level during that period. We cannot know for sure but if you were running an arbitrage hedge fund a possible trade would be to short sell EBOS now in the expectation of buying it back cheaper when the 9.7 million of index selling hits the market. But to make sure EBOS does leave the index, the arbitrage hedge fund also sells shares in Spark to contribute towards a weaker share price."

[see weed]

https://www.goodreturns.co.nz/articl...or+30+Apr+2024
"Forsyth Barr estimated that a Spark share price of below $4.80 between the 17th and 30th of April would likely trigger the EBOS exit from the ACWI. Funnily enough the Spark share price does indeed slump below that level during that period. We cannot know for sure but if you were running an arbitrage hedge fund a possible trade would be to short sell EBOS now in the expectation of buying it back cheaper when the 9.7 million of index selling hits the market. But to make sure EBOS does leave the index, the arbitrage hedge fund also sells shares in Spark to contribute towards a weaker share price."

Does that mean there could be a rebound in Spark sp after EBOS is removed. Have been buying up SPK in last 4 weeks just in case.

[winner69]

I’m looking forward to Snoopy’s view on this downgrade ….esp the segment analysis and costs

[Snoopy]

I’m looking forward to Snoopy’s view on this downgrade ….esp the segment analysis and costs.

No real surprise in the slowing of new handset sales in the consumer market, with a cost of living crisis going on. It is no real hardship to own a mobile phone for more than two years, despite some liking to be seen with or have the latest and greatest.

I reckon where Spark is hurting most is probably 'Spark Health'. 'NZ Health' is the largest government department. In the last half year report Spark admitted that 'Spark Health' had not only stalled but was not a real division anyway. It was just all the old health board customers grouped together for their ordinary needs to look fashionable for Spark shareholders (OTOH 'Telstra Health' across the ditch is a real division with its own IP). Nevertheless the increasing digitisation of health is an inexorable path forwards. And I think any downgrades in EBITDA from 'Spark Health' or indeed any of the other government departments will be 'cashflow postponed' rather than 'cashflow lost'.

It was good to see the dividend guidance unchanged, even if it does suggest that the dividends promised are not a true reflection of underlying earnings. But any regular readers of this thread will already know that! In response to the EBITDA downgrade, Spark has promised to up the sackings of their staff. Good to hear.

Last year's EDITDA for FY2023 without a poke in the 'I': $1,193m2. New forecast EBITDAI range $1,170m-$1,210m. Prediction is therefore for a flat result, if you ignore interest rates going up (as EBITDA does).

SNOOPY

... who is mulling over this downgrade as another potential share top up opportunity

[ronaldson]

There seem to be an awful lot of "top up opportunities" on the NZX just now.

[Ferg]

In the last half year report Spark admitted that 'Spark Health' had not only stalled but was not a real division anyway. It was just all the old health board customers grouped together for their ordinary needs to look fashionable for Spark shareholders....[snip].... Nevertheless the increasing digitisation of health is an inexorable path forwards.

I'm curious what the bold part means to you and in particular how this differs from previous systems and/or processes in the CHE's/DHBs. Do you have any further info on that?

[Snoopy]

I'm curious what the bold part means to you and in particular how this differs from previous systems and/or processes in the CHE's/DHBs. Do you have any further info on that?

I was referring to a comment by CEO Jolie Hodson at the full year for FY2023 Q&A session IIRC, following a slightly disappointing 'Spark Health' result. I imagined it was something to do with integrating health databases nationwide in a process of bringing all the disparate district health board records together. I may be wrong about that. But the basic idea is that you could go to a health specialist anywhere in the country and they would have access to your health records. I am not sure how far along the track this process is.

SNOOPY

[Baa_Baa]

And I think any downgrades in EBITDA from 'Spark Health' or indeed any of the other government departments will be 'cashflow postponed' rather than 'cashflow lost'.

Don't hold your breath Snoopy, the number of cancelled digital projects across government ministry's, agencies and departments is substantial. Not postponed. Cancelled, as in stopped or not going ahead at all.

[Jaa]

Don't hold your breath Snoopy, the number of cancelled digital projects across government ministry's, agencies and departments is substantial. Not postponed. Cancelled, as in stopped or not going ahead at all.

Interesting, in your opinion are these the dog projects that would have failed anyway or is it indiscriminate?