DASHBOARD: Telco & ICT sector financials

Dashboard containing:

• Monthly and annual share price movements for main listed stocks
• Key earnings multiples
• Forward earnings multiples vs forward growth estimates
• Share price movements tracked over last twelve months

Commentary

Key developments

Overall, smaller telco stocks that have seen significant declines over the last year have recovered over the last month. In contrast, larger telco performers with better annual performance have seen flattish short-term performance.

The IT sector has generally performed poorly over the last year. We seem to be seeing a level of scepticism about growth strategies, and more emphasis on consistency in delivering revenue and profit. Despite this, declines have flattened or reversed in recent months as the uncertainty now seems to been factored in.

Aussie Broadband

Aussie Broadband shares have fallen over the year despite strong revenue and market share growth and the company turning its first profit. But the company has been making strenuous efforts to explain its growth strategy, and it laid out more detail its 9 November investor day. This has been paying off since October, and January saw the recovery continue.

Spark New Zealand

Spark has been a strong consistent performer over the last year, despite a minor decline this month. A strong ROIC performnace has underpinned investor commitment.

Chorus

Chorus has performed strong as it earned more than it invested in the network for the first time in a decade. A 35 cent FY22 dividend, plus guidance of higher dividends to come, is underpinned by a benign regulatory regime which allows programmed wholesale price increases linked to CPI.

Symbio

Symbio has been held back by declining revenue in recent years, though profits have been more stable. The company has a good growth story in SE Asia, but delays in signing key agreements in December saw the share price fall sharply. There are signs of recovery this month, but the episode shows how dependent the company is on the success of its Asian expansion.