Latest / Best of Business / Jolie Hodson: Spark CEO on the company reporting a significant fall in profit

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Jolie Hodson: Spark CEO on the company reporting a significant fall in profit · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk st be
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  Speaker 2: Now, as investors, we're expecting Spark has had a tough
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  Speaker 2: year when you were just for one offs. Net profit
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  Speaker 2: for the most recent financial year was down more than
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  Speaker 2: thirty three percent to two hundred and twenty seven million dollars.
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  Speaker 2: The companies also cut about thirteen hundred full time employees.
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  Speaker 2: Now Jolly Hodson is Spark CEO. Hey, Jolie, Hi, Heather,
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  Speaker 2: So what happened? So we've been facing into a tough
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  Speaker 2: economic environment. Like many companies, some of the markets that
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  Speaker 2: we have Biggish market sharing have been really impacted both
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  Speaker 2: by reductions they'd seen in their own businesses. Lower spending
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  Speaker 2: has ever adapted to the economic environment, and so we
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  Speaker 2: needed to adjust and change and that's really been a
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  Speaker 2: focus for us over the last six months in terms
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  Speaker 2: of the program we put in place. Yeah, so lots
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  Speaker 2: of corporates cutting their expenses. Yeah, and if you think
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  Speaker 2: about whomor and we work in both it as well
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  Speaker 2: as telecommunications, so you think about tech product projects happening
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  Speaker 2: and being deferred over time. So we had a big
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  Speaker 2: impact in relation to that particular in our enterprise and
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  Speaker 2: government business. Yeah, is government has government hit you particularly hard?
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  Speaker 2: We have a strong customer base and government and so
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  Speaker 2: we have seen some of that spend reduction that's happened
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  Speaker 2: in the last two years, and that's really has been
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  Speaker 2: a big impact for us. Have you had a look
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  Speaker 2: at another thing, because in the past you've been criticized
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  Speaker 2: for the dividend spend? Have you had another think about that?
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  Speaker 2: Where weset a capital management policy with these results? So really,
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  Speaker 2: in a nutshell, there's a few things that we've changed there.
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  Speaker 2: So our dividend's now based on the free cash flow
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  Speaker 2: of the business, so pretty much it'll be a range
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  Speaker 2: of seventy to one hundred percent. So that's to some extent,
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  Speaker 2: living within your means within that dividend. And today we
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  Speaker 2: announced a dividend of one hundred percent payout of the
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  Speaker 2: free caasprow range. How do you feel, I mean, one
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  Speaker 2: of the bigger things that have happened to you guys
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  Speaker 2: in the last financial year is falling out of the
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  Speaker 2: Morgan Stanley Index. How do you feel about that? Look,
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  Speaker 2: I can't I can't look back to what's happened. All
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  Speaker 2: I can focuses on what we need to do ahead,
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  Speaker 2: and that's why the transformation program has been a big
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  Speaker 2: part of making sure that we get our operating business
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  Speaker 2: in order. So that did lead to some changes. It's
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  Speaker 2: not a decision to overtake lightly, but ultimately we have
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  Speaker 2: to adapt and then some shifts around the non core
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  Speaker 2: parts of our business, so we've divested elements. The real
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  Speaker 2: important part about that is the ability to recycle that
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  Speaker 2: cash back into the things that we do to our
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  Speaker 2: core connectivity, so mobile and making sure that we're growing that.
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  Speaker 2: So that's been the focus for us. Do you reckon
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  Speaker 2: you'd ever get to get back into it? Like, is
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  Speaker 2: that something that business can realistically achieve? I think from
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  Speaker 2: our perspective, we've got an ambition of growing both our
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  Speaker 2: earnings and our free cash flow, and with that comes
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  Speaker 2: dividend and therefore return for shareholders. So for me, that's
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  Speaker 2: very much the focus of the next Farcas. I was
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  Speaker 2: talking to Andrew reading of Fletcher before, and he said
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  Speaker 2: that this is the worst economic environment that he can recall.
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  Speaker 2: Like I bearing in mind he works in construction and
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  Speaker 2: they really had it very hard, but it's the worst
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  Speaker 2: that he can recall since probably the late eighties. What
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  Speaker 2: about Yeah, I'd say it's the worst I've worked on
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  Speaker 2: both in Australia and New Zealand in the last decade
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  Speaker 2: plus that I've been back here. I don't remember a
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  Speaker 2: tougher time. Yeah, which is to say that it can
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  Speaker 2: only get better, can't it. Yeah, Like, if we look ahead,
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  Speaker 2: that would be what we're working on. But the reality
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  Speaker 2: is we've had quite a few ocar cuts. We've got
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  Speaker 2: to see that flow back in confidence, I think in
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  Speaker 2: terms of both to consumers but also businesses to ensure
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  Speaker 2: that they're investing, because the only way we will come
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  Speaker 2: out of this is buy investing for productivity, making sure
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  Speaker 2: we are using new technologies, we are thinking about different
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  Speaker 2: ways of doing it, otherwise becomes a really challenging Yeah. Yeah,
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  Speaker 2: I mean what he said though, and this I think
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  Speaker 2: is kind of confronting. This is Andrew. What Andrew said
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  Speaker 2: is it doesn't get better really until late twenty six,
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  Speaker 2: maybe early twenty seven. What do you think. Look, I
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  Speaker 2: think we were all around when we heard the oh
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  Speaker 2: what was it survived twenty twenty five, So I think
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  Speaker 2: it's right to be cautious around what happens and I
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  Speaker 2: think most of us have been adapting our businesses to
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  Speaker 2: make sure that we're set up for whatever comes next
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  Speaker 2: and not overly optimistic around what that means around the corner.
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  Speaker 2: I'm excited about AIAU. Yeah, Look, I am. We've been
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  Speaker 2: using in our business for a period of time. I
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  Speaker 2: mean you can all see there's lots of funny ways
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  Speaker 2: in which can be used. In some ways that are
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  Speaker 2: not great for it to be used, but it does
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  Speaker 2: help enable Yeah, I mean are we over hyping it though?
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  Speaker 2: I mean there is a huge amount of buzz about it?
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  Speaker 2: Is it too much?
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  Speaker 1: Now?
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  Speaker 2: Look, I think about in certain parts of our business,
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  Speaker 2: so helping our teams, for example, our customer service teams,
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  Speaker 2: so it is answering twenty thousand queries to our team
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  Speaker 2: members a month right now. So that is a huge
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  Speaker 2: amount of time that's taken off them of doing things
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  Speaker 2: potentially that is not as exciting for them to be doing.
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  Speaker 2: Or So I think there are ways in which definitely
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  Speaker 2: ways in which.
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  Speaker 1: You use it.
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  Speaker 2: Yes, I do use to use it for partly in
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  Speaker 2: terms of when you're summarizing things, getting you know, like
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  Speaker 2: Google used to be in the past. Yeah, A lot
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  Speaker 2: of ways of bringing different information together, sometimes travel getting
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  Speaker 2: recommendations with them. Yeah, yeah, yeah, And so one of
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  Speaker 2: the things as a business that we're trying to do
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  Speaker 2: is really stand back and make sure that you're using
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  Speaker 2: it on an intien process if we are going to
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  Speaker 2: use it, because you can get thousands of things you
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  Speaker 2: could do with it. Yes, some of them are fun,
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  Speaker 2: some of them are interesting, but is it really going
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  Speaker 2: to drive efficiency or change your customer experience? So really
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  Speaker 2: our focus right now is on how do we make
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  Speaker 2: sure we use the scale in the right places. Yeah, hey, hey,
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  Speaker 2: I really appreciate your time. Thank you, Jolly, and thanks
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  Speaker 2: for coming in. Jolly Hodson Spark CEO.
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