The directors of telecommunications services provider Cabletalk say they are "considering a proposal from an interested party" after announcing the company had suffered a marked decline in revenue.
In a statement to the NZX on Friday, Cabletalk announced “the directors of Cabletalk met to review the group’s circumstances in the context of concerns about a decline in revenues since December 2007 and delays in the collection of debtors in recent months, reflecting the current economic climate.”
The statement goes on to say “These changes in circumstances have had an adverse impact on the group’s financial position and liquidity.”
Cabletalk made an after-tax profit of $360,000 in the year to September, helped by an increase in sales to $21.8 million, an 11% improvement on the previous year’s result.
However, since then, the company’s position has deteriorated to the extent that “in close consultation with their professional advisors, the directors are presently exploring a range of options with a view to strengthening the group’s balance sheet and improving liquidity.”
The NZX statement notes “the directors advise that previous forecasts for the current financial year must be substantially downgraded and that they now expect the group to incur a substantial loss from operations.”
According to the statement, “the directors are presently considering a proposal from an interested party who has a similar view of the opportunities available in the telecommunications sector.”
A previous potential buyer, Australia’s Service Stream, declined to go through with a buy last year, after looking at Cabletalk.
Cabletalk specialises in telecommunications and electronic security systems. Its main customer is TelstraClear.