Zintel maintains profit in tough telecomms times

NZ toll-free business suffers, but Australian and Enterprise divisions prosper

Telecommunications services provider Zintel has reported a pre-tax profit of $3.42 million for the year to March 31.

In an announcement to the New Zealand Stock Exchange, Zintel notes that revenue from operations for the year was $39.13 million, up from $37.15 million for the previous year.

The post-tax result for the 2008-09 year was $2.29 million, just ahead of last year’s figure of $2.27 million; however, lower taxes this year boosted the result from what it would have been if tax rates were the same in both years, chairman Nick Gordon says in the announcement.

Zintel operates Zintel Communications NZ and Zintel Communications Australia, which offer toll-free and other services, as well as Zintel Enterprise and Zintel Payments.

In the announcement, Zintel notes “The telecommunicaitons industry continues to be challenging, with intense competition, reducing margins and increasing expenses.

“In this environment, it is encouraging the group has maintained profit levels in line with the prior year, although individual business unit performance has been mixed.

“The Australian communications business has again grown profitability in the last year, which is positive, given the industry challenges being faced.

“However, profit from the New Zealand communications business declined as it has yet to arrest the customer shrinkage and was particularly hard hit by the loss of its largest customer last November.”

The enterprise division fared better, the announcement notes.

“Enterprise enjoyed a considerably better year in a business that has lumpy revenues.”

The acquisition of Commspec during the year has paid off, Zintel says.

“The Commspec business has now been successfully integrated and operates within Enterprise.

“Although Commspec required further investment during the year, the directors are comfortable with this acquisition and the rationale behind it”.

Near the close of the March 31 reporting period, Zintel managing director Peter Revell took a six-month leave of absence, related to short-term health issues.

Zintel director Paul Connell took over as executive director in Revell’s absence.

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