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Speaker 1: Ever, duplicy Ellen. So Spark has sold seventy five percent

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Speaker 1: of its data center business to ossie firm Pacific Equity Partners.

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Speaker 1: PEP is paying four hundred and eighty six million dollars

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Speaker 1: for this, along with another eight ninety eight million dollars

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Speaker 1: if performance targets are hit by the end of twenty

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Speaker 1: twenty seven. Greg Smith is the head of retail for

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Speaker 1: Devon Funds and with us Hey.

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Speaker 2: Greg Hey, good evening, Heather.

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Speaker 1: This is the high end of what we were expecting,

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Speaker 1: a he incertainly is.

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Speaker 2: I mean, it's thirty point eight times four year twenty

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Speaker 2: five earnings, so it's a pretty good price, and I

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Speaker 2: just I suppose it reflects the demand for these sort

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Speaker 2: of assets. So, look, it had been well flagged that

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Speaker 2: this devestment was being considered, and it was sort of

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Speaker 2: really something that Spark had to do. There'd been a

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Speaker 2: lot of focus on their debt levels, on protecting the dividend,

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Speaker 2: and the reality is building up these data center is expensive,

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Speaker 2: so they were going to need to spend a billion

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Speaker 2: dollars on the data center roll out. So it's a

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Speaker 2: good outcome, it's a good price. They can pay down

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Speaker 2: some debt they can keep some skin in the game,

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Speaker 2: and of course they getting this out of the way

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Speaker 2: before the four year results next week.

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Speaker 1: Yeah, and they're obviously using some of the money to

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Speaker 1: pay the dividends. Should they be paying dividends at the moment.

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Speaker 2: Though, yeah, I mean that's been the question. So you know,

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Speaker 2: they've effect had been paying dividends that they actually can't

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Speaker 2: really afford to. So this is going to change things

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Speaker 2: a bit. You know, this business is being separate into

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Speaker 2: a new standalone company. So we are expecting, with the

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Speaker 2: sort of clarity that we've got now, some sort of

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Speaker 2: dividend cut next week. So the current divind to give

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Speaker 2: you an idea, is around about twenty five cents per share.

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Speaker 2: That's expected to go down to around eighteen the current

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Speaker 2: share price. That's still a pretty good yield. Yeah, six

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Speaker 2: to sort of seven percent. So obviously investors haven't liked

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Speaker 2: the result today today will be the announcement today, so much

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Speaker 2: shares down two and a half percent. But I think,

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Speaker 2: you know, it is sort of that fact that now

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Speaker 2: we are going to be facing a cut in the

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Speaker 2: dividend announced next week, and the question will be whether

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Speaker 2: it's the final dividend or the dividend for the sort

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Speaker 2: of the fourthcoming year. We know the pressure that Sparks under.

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Speaker 2: Business spend has been under the pump given the economy,

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Speaker 2: government spending has been pressurized. So I think what'd be

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Speaker 2: really interesting as well is whether there's any sort of

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Speaker 2: green shoots in that outlook. And yeah, I suppose that's

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Speaker 2: what investors will perhaps be clinging to.

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Speaker 1: Now there's been a fair bit of talk about the leadership,

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Speaker 1: board leadership, executive c suite leadership as well. What do

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Speaker 1: you reckon is going to change here?

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Speaker 2: Well, I think for the moment that's probably you know,

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Speaker 2: I think the benefit of the doubt is going to

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Speaker 2: be given to the current current leadership. But yeah, Sparks problems,

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Speaker 2: you know are Yeah, a lot of it's been about

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Speaker 2: it out of its control when you look at what

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Speaker 2: the economy has been heavily pressurized. So they're certainly not

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Speaker 2: alone there. There have been here some questions over you know,

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Speaker 2: what they're going to be doing with various assets. We

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Speaker 2: now have some certainty there around the data centers, so

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Speaker 2: I think there will be an element of benefit of

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Speaker 2: the doubt, And yeah, what investors are really looking for

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Speaker 2: some sort of signs that things can turn around. I

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Speaker 2: think yeah, for a long time, your sparks sort of

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Speaker 2: been out of its depth in terms of you know,

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Speaker 2: I suppose the checks has sort of been going one way,

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Speaker 2: and now you know that obviously now got that going

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Speaker 2: the other way. This data center sales, so it's going

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Speaker 2: to pay down debt, it's going to make the balance

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Speaker 2: sheet in this in better shape. That's going to be

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Speaker 2: good in terms of the credit rating. Agencies are going

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Speaker 2: to maintain that a minus rating. They're going to say

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Speaker 2: protect the dividend to an extent that it's probably coming down,

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Speaker 2: and I think there will be some benefit of the

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Speaker 2: doubt given for the company to sort of get through

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Speaker 2: and hopefully have a better sort of six to twelve

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Speaker 2: months ahead.

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Speaker 1: Brilliant stuff. I really appreciate it. Appreciate your expertise, he agreed.

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Speaker 1: That's Greg Smith, Devin Fund's head of retail.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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