Spark New Zealand Ltd (SPK) - Comprehensive analysis
Challenging economic conditions in New Zealand, along with structural headwinds affecting the mobile and IT sectors due to budget constraints from government and enterprise customers, have revealed Spark NZ’s inflated cost base. While earnings are currently weak, they are anticipated to recover as the New Zealand economy improves. Additionally, there is likely to be a renewed emphasis on cost management, with achievable cost-reduction targets. In terms of our earnings and dividend projections, we expect the balance sheet to remain stable and potentially improve through asset sales. This outlook is not currently reflected in the share price or in Spark’s competitive mobile business, which benefits from a stable and rational industry structure, with Spark holding the leading market share.
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