Telecommunications company Spark made much of its change programme when releasing its financial results yesterday for the six months ended December.
The company reported operating earnings of $463million for the period, down 1.7% on the previous corresponding period. Reported profit was down 3.4% to $172 million.
An interim dividend of 12.5c per share was declared, made up by a 75% imputed ordinary dividend and a 1.5cps special dividend imputed to 75%.
However, chairwoman Justine Smyth said the financial results showed Spark had made good progress on its bold transformation strategy.
Results were being seen from the three strategic focus areas: an emphasis on wireless technologies; better serving price sensitive customers; and radically simplifying, automating and digitising the business to reduce costs, while maintaining the high quality customers deserved.
''These underpin the next phase of our transformation and are intended to seek out growth in a very challenging market and operating environment,'' she said.
In the half, Spark maintained revenue growth, up 1.6% to $1.82billion, despite intense competition in all of the company's markets.
Mobile revenue was up 8% and cloud, security and service management was up 17.5%.
As indicated at the end of the June 2017 financial year, the transformation programme had associated costs of change. Revenue growth over the half was partially offset by $13million of such costs resulting in the operating profit falling $8million to $463million, Ms Smyth said.
Managing director Simon Moutter said the Upgrade New Zealand programme progressed well in the half-year and wireless broadband was now in 104,000 premises and a large number of customers were migrating from copper to fibre.
Spark now had 45% of its customers on new technologies, keeping the company on track to be mostly ex-copper by 2020.
The shift improved customer experience and was also delivering about $46 million annually in reduced access costs.
At the more price-sensitive end of the market, Spark's sub-brands Big Pipe and Skinny had continued to resonate well. Price-sensitive customers secured the majority of Spark's broadband connection growth in the half year, alongside the growth of Skinny Direct's mobile service.
In the six months to December, Spark had migrated more than 166,000 consumers to fit-for-purpose plans.
Spark's partnerships with Spotify and Netflix continued, together with Lightbox, to be valuable means of customer growth and retention, he said.
Lightbox had more than 300,000 subscribers and Spark announced yesterday it would upgrade its video media platform with the new Brightcover platform to launch in April.
The range of content available would be expanded, adding additional revenue with pay-per-view movies, Mr Moutter said.
The board reaffirmed its full-year operating profit guidance of 0% to 2% growth.
