Spark surges in H1 FY20

Spark said the performance of its mobile business had been particularly strong

Spark has boasted its strongest revenue growth in three years for the half year to 31 December, an increase of 4.0 percent to $1,824m, along with EBITDAI growth of 2.2 percent to $500m. Net profit after tax was up 9.2 percent to $167m.

Spark said the performance of its mobile business had been particularly strong, with revenue up 5.5 percent and market share (according to IDC) climbing 1.2 percentage points to 40.1 percent, its highest level since 2012.

“Revenues were also buoyed by cloud, security and service management growth (up 12.3 percent), the introduction of Spark Sport and a moderation in the rate of legacy voice declines (down 11.6 percent), as fixed-line voice becomes a smaller part of the business,” the company said.

Net debt grew by $210m to $1,526m but Spark said it expected this to reduce during H2 as heavy H1 investment abated.

Spark chair Justine Smyth said the company’s performance had been helped by its shift to Agile ways of working and its long-term investment in IT and network infrastructure.

“We are heading into the final six months of a three-year strategy that has been transformative for Spark,” she said.

“Our move to Agile ways-of-working continues, with ongoing incremental gains in our speed to market, customer understanding and focus, and in building a high performance and inclusive culture.

“We have made significant investments in Spark’s network infrastructure, which has improved our competitive advantage, and diversified our business beyond traditional telecommunications into growth segments like digital services and sports streaming.”

Spark announced plans to move to Agile in 2017 and a year later revised down its FY18 EBITDA guidance from zero to two percent. to negative 2.5 percent to 0.5 percent in light of expected costs resulting from an acceleration of the program that it said would improve customer experience and strengthen earnings in FY19 and beyond.

CEO Jolie Hodson said the company had tightened focus on its core business by finalising the divestment of Lightbox and CCL’s network assets and completing the merger of its cloud and ICT businesses Revera and CCL.

In December 2019 Spark announced its cloud computing and IT services subsidiary Computer Concepts Ltd (CCL) would divest the operational parts of its network services division through a management buy-out by its general manager of network services, Mark Jurgeleit, who would rename the business Octave.

(The name has been changed to Cello Group, trading as Cello Communications. CWNZ pointed out at the time there was already a New Zealand business named Octave, a Wellington-based marketing agency that owned the octave.co.nz domain.)

Copyright © 2020 IDG Communications, Inc.

  
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