Spark FY25 guidance cut amid recessionary pressures, plans restructure

Spark New Zealand (NZX:SPK) has revised its FY25 EBITDAI guidance downward to $1.04-$1.10 billion, citing the ongoing recessionary environment and its impact on the Enterprise and Government division. Despite this, Spark maintains its dividend guidance at 25 cents per share (75% imputed) and capex guidance of ~$415-$435 million. As part of a strategy to improve performance, Spark is implementing cost reduction initiatives targeting $80-$100 million in FY25 and $110-$140 million annually by FY27. The company is divesting its remaining stake in Connexa, expecting proceeds of approximately $310 million in Q3, and exploring a capital partner for its data center growth strategy. The Board has declared an interim dividend of 12.5 cents per share, 75% imputed, payable on April 4, 2025, with a dividend reinvestment plan available at a 2% discount.