SPK - Spark NZ

[Cod]

SPK exited down channel, formed very tight up channel (high conviction) but not overexuberance. Notional target $3.50 ( From chart on May 08 2025)
You cannot view this attachment.

[Left Field]

SPK's cunning plan for the future!? Hardly inspiring.

https://www.nzx.com/announcements/458552

[Left Field]

SPK's FY2025 Annual Meeting presentation.

https://api.nzx.com/public/announcement/462208/attachment/456126/462208-456126.pdf

Chair & CEO's presentations

https://api.nzx.com/public/announcement/462208/attachment/456125/462208-456125.pdf

No change in guidance (so far) that's good for holders, however from a TA point of view,  the sentiment remains negative.

[Basil]

Forsyth Barr have recently downgraded to "UNDERPERFORM"

[Red Baron]

Forsyth Barr have recently downgraded to "UNDERPERFORM"

I zee zhat 'pompous pup' whose name must not be mentioned, doesn't buy it though.    In vact he zeems to be buying ze zhares again:  doubling down.  Can zhat be right?    Zomeone needs to go over to zhat other place and tell heem vrom me, vhen you are een a hole to ztop digging.    Ze vay he eez going, he vill end up in Zpain!   

Although on zecond thoughts, zhat might not be zuch a bad theeng, as I vill be zhere, vaiting vor heem.  Ha ha ha!

RB

[Shareguy]

FB latest not good reading. Still a sell they say?

Insert

Recent data points on Spark NZ (SPK) show a continued loss of market share in the important mobile market. 4Q25 data from Telcowatch saw SPK lose an estimated -20bp of market share versus 3Q25 across its main Spark and Skinny brands, taking its estimated connection share to 38.1%. 2degrees continues to be the telco gaining share, with One NZ broadly stable. This data is corroborated by rankings on the Apple App Store. SPK's average ranking has remained 10th over 1H26 (in line with 2H25) but is a record low and below both One NZ (7th) and 2degrees (3rd). This continued loss of market share is disappointing given SPK has increased its investment in marketing over 2025 and, as indicated by SPK (and seen in the data), it had a solid new iPhone launch period during August to September 2025

[Left Field]

Spark confirms sale of 75% of its Data Centre Business.....

https://www.nzx.com/announcements/466723

Happy to leave it to holders to comment.

[LoungeLizard]

Spark confirms sale of 75% of its Data Centre Business.....

https://www.nzx.com/announcements/466723

Happy to leave it to holders to comment.

A good move to reduce stake in datacenter business and sell non-core assets as a means to getting the balance sheet back into shape. Management also embarking on a big cost-out programme that is expected to deliver savings of $150-$180m.
 I regard SPK as being oversold and undervalued and happy to hold and receive probably 15-17c dividend which is about a 7% return on current prices. Morningstar only yesterday rated SPK as a buy with a valuation of $3.60. Other agencies are less positive so make of that what you will.
 Management clearly took their eye of the ball and have acknowledged their mistakes and I think they will get back on track in the not too distant future, particularly if there's a change of this austerity-minded Government who are underinvesting in IT along with everything else.

[entrep]

Spark confirms sale of 75% of its Data Centre Business.....

https://www.nzx.com/announcements/466723

Happy to leave it to holders to comment.

Gotta fund future dividend payments somehow

[LoungeLizard]

Gotta fund future dividend payments somehow

Plenty of analysis out there that show 15-17c is sustainable from on-going operations.

[Basil]

8 years ago they earned EPS of 20 cps.
If they make consensus forecast in 2026 they will earn just 13.5 cps. Taking into account 8 years of inflation EPS has nearly halved ! This sale will allow the dividend charade to continue for a while longer.

[LoungeLizard]

From Morningstar:

The bottom line: We retain our fair value estimate of NZD 3.60 (or AUD 3.30) for narrow-moat-rated Spark New Zealand. Shares are materially undervalued, reflecting market scepticism of the cost-out program and management's ability to refocus on core connectivity businesses. At a broad level, however, Spark is a defensive company with scale advantages in a rational three-player mobile market. Its strategy to refocus on core connectivity and reduce costs is likely to succeed, and support a maintainable annual dividend of NZD 0.15 per share. Our forecasts are unchanged. We expect Spark's first-half performance for fiscal 2026 to show progress toward meeting management's full-year EBITDAI guidance of NZD 1.01 billion to NZD 1.07 billion. We forecast EBITDAI of NZD 1.05 billion.

Long view: SPK-30 is designed to refocus Spark on its core connectivity business and improve returns. Investors will be watching closely to see if the company is on track to lift group ROIC toward the 10%-13% target by fiscal 2030, from 8.7% in fiscal 2025. We forecast ROIC to be close to 13% by fiscal 2030.

[Shareguy]

Looks like FB was right as it continues its downwards track. I think it's too hard to determine what the share is worth until we see the results coming up shortly.

FB latest note out today still a sell. 1H26E divi at 8 cps. NPAT $93m

Never been a holder, but starting to watch.

[Basil]

This is a very easy company to value as there is no growth.  Take next years earnings and multiply that by 8.5.  When this was $3 and the consensus from analysts was that it was worth $4, there were only 2 people on this thread pointing out the no growth, Ferg and I.  I called it as being worth no more than $2 to much consternation from some holders, some of whom had insisted it was a great bargain at $4.50 about 2 years ago. I was right.

I'll put it this way, the only dog's I like have tails and four legs.
This has all the classic hallmarks of a dividend trap. 
Never held but could be interested if it halves again and goes down to 7 times EPS of 13.55 cps = approx $1.
I still believe the analysts have this very badly wrong with an average price target of $2.87
https://www.marketscreener.com/quote/stock/SPARK-NEW-ZEALAND-LIMITED-6492600/finances/
Buying down trending dividend traps is almost a guaranteed way to gain dividend income but its paid for out of capital losses.

[Left Field]

.. there were only 2 people on this thread pointing out the no growth, Ferg and I.

Sorry, but this is simply not true !?

Perhaps your memory is failing..... there have been many other posters including COD, Waltzing, L.Lizard, KW and myself......all  warning on SPK for a long  time.

Just saying.