Spark unveils new strategy after challenging year

Spark New Zealand reported a challenging FY25 with adjusted revenue declining 4% to NZD 3.7 billion and EBITDAI down 9% to NZD 1,060 million. Net profit after tax saw a significant 34% drop to NZD 227 million. Despite lower earnings, free cash flow remained at NZD 330 million, matching FY24, due to a 17% reduction in total capital expenditure to NZD 429 million. The Board declared a final dividend of 12.5 cents per share, bringing the total FY25 dividend to 25 cents per share.

The company announced a new five-year strategy, SPK-30, refocusing on core connectivity, which accounts for 80% of gross margins. Strategic divestments included the sale of the remaining stake in Connexa and a small shareholding in Hutchison Telecommunications Australia, generating combined proceeds of NZD 356 million. Spark also agreed to sell a 75% interest in its data centres to Pacific Equity Partners, valuing the business up to NZD 705 million.

For FY26, Spark provided guidance of adjusted EBITDAI between NZD 1,010 million and NZD 1,070 million, with a dividend payout ratio of 100% of free cash flow. The company aims to return to topline growth and improve shareholder returns, targeting an invested capital return of 11-13% by FY30.