KEY POINTS:
Mobile radio communications company Team Talk has reported a net profit after tax down 15.5 per cent to $1.6 million for the half-year to December.
Revenue for the half was up marginally at $10.01 million, compared to $9.96 million for the same period last year.
But costs increased
by almost $400,000 to $6 million.
The three factors contributing to the cost increase wer e a rise in site rental expenses, an increase in staff and related costs relating to Team Talk's new mobile data business, and some indirect expenses related to the acquisition of fibre optic company City Link.
Team Talk bought 67 per cent of City Link for $1.68m plus an advance of $11m to City Link by way of convertible notes and debt.
The deal provided a platform for sustainable growth in a rapidly expanding area of the telecommunications market, Team Talk said.
Overall, the City Link group result showed a small loss of just under $100,000 for the period.
"It is difficult to reconcile this result with previously announced expectations as it only covers a one month trading period, includes some acquisition expenses and costs relating to the establishment of a new City Link network in Christchurch," Team Talk said.
The directors remained confident that over time City Link would become an increasingly important contributor to group results.
Team Talk's core radio business continued to generate strong cashflows, with the overall group net cashflow from operations having increased to $4.7m from $4.1m.
In contrast to earlier periods, when that was largely directed to debt reduction, this period it was -- in addition to some new external borrowing -- applied to the City Link investment.
"In the past six months Team Talk has taken a big step towards achieving its goal of becoming New Zealand's best little telecommunications company," the company said.
"We are all looking forward to this exciting new stage in our development."
The directors have declared a fully imputed dividend of 10 cents per share payable on 27 April 2007.
The final dividend for the 2007 year will not be less than 10 cents per share, making a total dividend for the year of not less than 20 cents per share.
Team Talk shares closed yesterday at $2.71, with the high for the year having been $2.90 hit in July.
- NZPA