Spark board chairwoman Justine Smyth and chief executive Jolie Hodson have addressed the telecommunications company's AGM. (file photo) Photo: Supplied
Telecommunications company Spark says its share price is not where it should be, but it is confident it can reset to support long-term value for shareholders.
This week, Spark cut its full-year underlying profit forecast by 4 percent, and announced likely asset sales, cost cutting and a lower dividend due to challenging economic conditions.
So far this year, the share price had fallen more than 40 percent to its current $2.90.
At its annual meeting on Friday, shareholders voiced concerns about financial management.
Spark chairwoman Justine Smyth was apologetic.
"We are incredibly disappointed with where the share price is sitting and that's why our focus is on improving underlying business performance, which will in time support a return to a higher price.
"We have outlined the actions that we are taking with a focus on reviewing non-core assets and significantly expanding our cost out programme, all the while continuing to drive momentum in key markets like mobile."
Spark has cut overheads by $30 million and its wages bill by $50 million to get the business back on track.
Chief executive Jolie Hodson emphasised its data centre strategy as a key area for growth, particularly for shareholders.
Data centres store IT assets for businesses, such as servers and cloud information.
"To illustrate the value opportunity, a telecommunications-focused business like Spark is generally valued at around eight times EBITDAI. A data centre business can achieve valuations as high as 20-25 times EBITDAI at maturity.
"This demonstrates the future value to shareholders of building on Spark's existing market share and capability in this market.
"To do that we need the capital to fund our development pipeline, which we anticipate will be $1 billion over the next five to seven years. We are currently exploring capital partnerships to achieve this," she said.
