TPG Telecom (TPM) has provided a solid reply to the moaning and groaning from some iiNet (IIN) shareholders by revealing better than forecast interim earnings, and an upgrade to full year forecasts.
Complaints continued yesterday from a small minority of iiNet shareholders about the ‘paucity’ of TPG’s offer of $8.60 a share, plus the interim dividend of 10.5c – complaints which saw the iiNet share price under pressure all day as it eased to close down 2.2% at $8.655.
TPG shares rose solidly after the interim result was revealed, but eased a little in afternoon trading to end at $9.085, up 2.8%.
TPG told the ASX yesterday that it now expects earnings before interest, tax, depreciation and amortisation to come in between $480 million and $483 million, up from previous guidance of between $455 million and $460 million.
That was after TPG reported an 18% jump in net profit for the first half to $106.7 million, up from $90.1 million in the first half of 2013-14.
An interim dividend of 5.5c a share, fully-franked will be paid, up from 4.5c in the previous first half year.
Revenue surged 59% from $394.6 million to $627.3 million, thanks mostly to higher traffic on its broadband network, and the continuing contribution from AAPT.
As of January 31, TPG had 786,000 broadband subscribers, an increase of 38,000 in the half, and 342,000 mobile subscribers.
TPM 1Y – TPG beats forecasts
TPG Telecom management yesterday insisted its $1.4 billion bid for internet provider iiNet is good for the takeover target’s shareholders, despite the opposition from some investors.
"We’re disappointed by the reaction of certain shareholders given our genuine belief that we’re proposing a great deal for iiNet shareholders," TPG chief financial officer Stephen Banfield said on Tuesday.
"TPG has offered a full and fair value for iiNet."
TPG’s consumer division saw a 17% rise in earnings to $117.1 million, driven by that 38,000 rise in its broadband subscriber base in the half year to January 31.
The group’s acquisition of AAPT helped the corporate division lift earnings by 84% to $117.7 million.
And in an effort to calm nerves in the iiNet shareholder group, TPG CEO, David Teoh says he is willing to meet iiNet’s former CEO and founder, Michel Malone to discuss the bid and try and meet his concerns.
