Telstra says it is negotiating with the federal government over proposals to separate the telco, with the interests of its shareholders taking precedence.
In a letter sent to shareholders yesterday, chief executive David Thodey and chairman Catherine Livingstone said the negotiations were being conducted in a positive and constructive manner.
The news helped push up the company’s shares 3 cents to $3.26 at the close.
That was also three cents higher than the level before the federal government made its announcement.
"As we stated last week, we are disappointed the government has felt it necessary to introduce this legislation at a time of such fundamental change in the industry," the two wrote.
"This legislation will mean a significant change to Telstra and the industry.
"We are continuing our negotiations with the government in a much more constructive and positive manner, but let us conclude by addressing a misconception that has been raised recently in the media.
"The board and management have always had, and will continue to have, the interests of shareholders as our over-riding priority."
Mr Thodey and Ms Livingstone said in the letter they had been encouraged by the many emails and letters the telco had received from shareholders expressing concerns about the government’s initiatives.
Under legislation introduced to parliament a fortnight ago, Telstra faces the structural separation of its wholesale and retail businesses – by either voluntary or forcible means.
The proposal is aimed at creating a more level playing field ahead of the build-out of a high speed national broadband network.
The company said it was preparing a submission for a senate inquiry into the proposed regulatory reforms, which is due by tomorrow week, October 7.
Flight Centre says there are signs of a recovery in the travel market and that its trading results for the first two months of this financial year have been encouraging.
"While the company has not yet seen conclusive evidence of a full recovery, Flight Centre has started the year with some positive momentum from the fourth quarter of 2008/09 and trading results for July and August are encouraging," the travel agency group said in its annual report, released yesterday.
"We also have a stronger sales network, following the growth we recorded in specialist areas during 2008/09, the addition of new corporate travel sales people and completion of the shop of the future refurbishment program.
"While there are certain to be some challenges, Flight Centre is in a very solid position."
"In terms of profit targets for 2009/10, FLT will initially target a pre-tax result between $125 million and $135 million in an improving but still uncertain trading climate," CEO Graham Turner wrote in the annual report.
The group posted a 72% slide in annual profit to $38.2 million for the year to June 30, 2009.
The company said it expected continued growth in online sales but did not anticipate major shifts in its earnings profile, as online air-ticket sales were becoming increasingly commoditised in Australia and elsewhere.
"We also have a stronger sales network, following the growth we recorded in specialist areas during 2008/09, the addition of new corporate travel sales people and completion of the shop of the future refurbishment program.
"While there are certain to be some challenges, FLT is in a very solid position."
Flight Centre shares rose 3.2% in yesterday’s solid market to close at $14.95.
