Spark New Zealand Ltd

SPK: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$6.60	Kbjhpf	Wbskhfdv

Telecom's Balance Sheet Capacity Post AAPT Sale Offers Medium-Term Capital Management Opportunity

, Ross MacMillan

May 20, 2014

The recent sale of AAPT has bolstered the balance sheet of Telecom New Zealand, or Telecom, with gearing levels now below long-term management targets. In the absence of a material increase in the dividend, Telecom will degear further in the medium term on our estimates. A strong balance sheet provides scope for Telecom to undertake new capital management initiatives within the next 12 to 24 months, assuming delivery of operational and cost saving targets.

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