Telstra (TLS) has lifted its 2013-14 interim dividend to 14.5c a share, up a whole half a cent, on the figure for the past few years.
But the increase will mean the company effectively again pays out more than 100% of net profit, so it is keeping faith with its investors, especially its huge retail base.
The higher dividend follows rises in payouts by a increasing number of companies, led by the Commonwealth Bank, CSL, Goodman Fielder and Country Road (both of which resumed making payments to shareholders), JB Hi Fi, Domino’s Pizza and others.
The news was in the company’s half year profit statement to the ASX, released this morning.
The higher dividend, which was hinted at last year in commentary after the full year result, and in comments later made at the AGM came on a 9.7% rise in net profit to $1.7 billion for the six months, and a 4.1% rise in total income to $12.8 billion.
The 3.6% rise in dividend was much slower than the near 10% rise in net profit for the six months.
But the total payout to shareholders will absorb all the net profit and a bit more at a total of $1.8 billion, so there shouldn’t be any complaints.
Telstra shares closed at $5.11 on Wednesday ahead of this morning’s profit announcement.
TLS Vs ASX200 1Y – Telstra outperforms broader market, boosts dividend
The company said group operating costs rose 2.1% in the half year – which is about on pace with the rise in inflation in the same period.
Telstra said it added 739,000 new customers in the half to take the total number of customers to 15.8 million.
Earnings before interest tax, depreciation and amortisation (EBITDA) rose 7% to $5.3 billion, which is a gross profit margin of 41 cents in every dollar of revenue.
That tells us just how profitable the company remains, despite all the wrenching change and increased competition in the last decade or more.
The company said it remained on track to meet full year guidance of low single digit income and ebitda growth.
The higher dividend is full franked and is payable on March 28.
TLS – Financial Results for the Half-Year ended 31 December 2013 – Analyst Briefing Presentation
