Spark New Zealand Limited Analysis

Overview

As one of New Zealand's largest listed companies, Spark New Zealand has many responsibilities to customers, partners, shareholders, and New Zealand.

Spark New Zealand is made up of a number of core business areas, Spark Home, Mobile & Business, Spark Digital, Spark Ventures, and Spark Connect. In addition, there are a number of flanking brands, including Revera and Appserv, both Cloud computing specialists that together can provide Cloud solutions across the market, Big Pipe and Skinny as value-brands for the broadband and mobile markets respectively, a smart data business called Qrious, and Lightbox, an internet TV business.

Spark New Zealand is the parent company. Spark Home, Mobile & Business provides access to technology in new and innovative ways to help New Zealanders and New Zealand businesses move forward and reach their goals. Spark Digital provides solutions for the rapidly evolving needs of business, enterprise and government clients as they meet the demands of an increasingly globalised, connected and mobile customer base. Spark Ventures will be accelerating the company's future focus and pace of innovation, and delivering new services and businesses such as WiFi, Internet TV and Smart Data analytics.

Spark New Zealand has a continued focus on becoming a winning business inspired by customers, providing communications, entertainment and IT services over our networks and the cloud, to enable New Zealanders to unleash their full potential. Its aim is to achieve #1 in mobile, #1 in data, and #1 in effortless service and cost. To achieve this, it is investing broadly across its organisation - in people, in new services, products and businesses, in customer service and intelligence, and in digital networks, spectrum and IT platforms - to set itself up for success and for further growth in the future.

Spark New Zealand (then Telecom) was formed in 1987 out of the telecommunications division of the New Zealand Post Office, a government department. In 1990 Spark became one of the first telcos in the world to be fully privatised. On 30 November 2011, Spark New Zealand demerged into two entirely separate, publicly listed companies; a retail services provider (Spark) and a network services operator (Chorus). Structural separation of Spark's retail business from the business that owns and operates the Fibre-To-The-Premise (FTTP) network was a pre-requisite for participation in the Government's Ultra-Fast Broadband scheme (UFB).

Today, Spark has a significant level of operational scale within the New Zealand telecommunications market and provides fixed, mobile and IT products and services to consumer, small and medium-sized enterprise (SME), corporate, enterprise and wholesale customer segments.

Performance

The following information was extracted from Spark NZ Limited's FY25 Full Year results, released on 20 August 2025:

Spark announces FY25 results within updated guidance

• Delivering EBITDAIi, capex, and FY25 dividend within updated guidance

o Reported revenueii of $3,725m declined 2.5%; adjusted revenue of $3,700m declined 4.2%

o Reported EBITDAI of $1,053m declined 7.7%; adjusted EBITDAI of $1,060m declined 8.9%

o Reported NPAT of $260m declined 17.7%; adjusted NPAT of $227m declined 33.6%

o Final dividend of 12.5 cents per share declared, bringing total FY25 dividend to 25 cents per shareiii

• Significant transformation on track – with portfolio management delivering $356miv in proceeds from non-core asset divestments and cost reduction programme delivering $85m in H2 25 vs H2 24 • Sale of 75% stake in data centre business expected to deliver initial cash proceeds of ~$486mv at completion, while retained 25% stake supports long-term shareholder value creation

• New five-year strategy and capital management reset refocus Spark and its capital investment on its core connectivity business