CALGARY – While the company that bears his name posted another strong quarter and is quickly closing in on 200,000 phone customers, Shaw Communications founder and chairman JR Shaw was again asked about rumors that the company would be sold during Friday afternoon’s conference call with financial analysts.
Pointing out that the family has been very active purchasers of Shaw shares, the chairman added, "The family is very content with the ownership that they have… We have no intention of doing anything with this property, or any other properties that we have, on an exit basis… Someone asked me a while ago: ‘why wouldn’t you sell?’ and the question I have is where would you invest that money to get the same returns we’re getting today? I don’t know where you’d go," said Shaw.
"We’re very pleased with where we’re at. It’s growing. I’ve been around this business since I was exposed to it in the early ’50s initially, and then got active here in the west in the mid-’60s and the company has grown all the time. The only negative in this industry is the (capital expenditure line) because there’s always something changing, always something increasing, always something growing. And that’s no different today than it was 20 or 30 years ago."
And capex is on the rise again, said company president Peter Bissonnette. "In fiscal ’07, we are planning to increase our capital spending to continue to roll out our digital phone and to fund ongoing upgrades to support growth and the delivery of the next generation of services to our customers… our preliminary view of capital spending for fiscal ’07 is between $600 and $630 million."
That’s an increase of about $200 million over 2005.
Bissonnette said the company is about to embark on a 3.5 year plan to get all of the company’s "major systems" running at 750 MHz "using 860 actives."
While much of Shaw Communications largest systems in Calgary, Edmonton and Vancouver have been upgraded, other smaller systems are in various stages of development – and since the company is seeing strong voice and Internet uptake in markets the size of Fort McMurray, for example, it is moving on a larger rebuild scheme for many of its markets.
Shaw is also spending on additional soft switches and is in the midst of overhauling its billing and customer management systems, said CEO Jim Shaw.
As for the hard numbers from the third quarter and fiscal year so far, ended May 31st, net income, not including non-operating items the company detailed in its release, would have been $63.9 million in the quarter and $152.1 million for the first three quarters, compared to net income of $34.6 million and $73.9 million in the comparable periods.
Consolidated service revenue of $626.7 million and $1.8 billion for the three and nine month periods, respectively, increased 11.9% and 11% over the comparable periods last year. Total service operating income before amortization of $279.5 million and $802.8 million improved by 10.5% and 9.8%, respectively, compared to the same time frames in 2005.
Local phone lines increased 50,294 for the quarter for a total of 168,963 customers at May 31. At the addition rate of about 4,200 a week, Shaw is likely closing in on 185,000 phone customers now.
Customer gains were also posted across all other products. Internet and digital increased by 21,654 and 14,733 subscribers respectively. Basic cable increased 2,248 and Star Choice added 4,283 subscribers. On a year-to-date basis customer gains in all products exceeded growth in the prior year: Internet and Digital added 112,674 and 61,623 subscribers, respectively, while basic cable increased 38,515 and DTH was up a total of 21,325.
For more, go to www.shaw.ca
