Shares in TPG Telecom (TPM) jumped sharply in yesterday’s sluggish market after revealing the first fruits of its $1.5 billion takeover of iiNet last year.
The shares rose more than 7%, to close at $11.08 after directors told the ASX that interim net profit jumped 90% to $202.5 million, which was better than many analyst forecasts.
As a result TPG said it would boost its interim dividend to 7c, fully franked, up 27% from the 5.5c a share payout in the first half of 2014-15.
TPG forecast annual underlying earnings before interest, tax, depreciation and amortisation of between $770 million to $775 million, which would be more than 37% up on the $484.5 million earned in 2014-15.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the half rose 8.5.1% to $437.3 million, thanks to a $111 million contribution from iiNet.
After securing approval from the ACCC on August 20, TPG completed the acquisition on September 7. The deal made TPG Australia’s second biggest fixed-line after Telstra and in front of Optus.
TPG said its consumer division reported interim EBITDA of $125.6 million, up 7.3% from $117 million a year ago, thanks to 32,000 new broadband subscribers.
At the end of January, the unit had 853,000 broadband subscribers and 297,000 mobile customers. TPG had 1.842 million customers in total.
TPG’s corporate division reported a 12% jump in EBITDA of $131.9 million from $117.7 million a year ago, thanks to strong sales.
Revenue rose 84% to $1.15 billion from $627.3 million.
One tiny worry was the news that subscriber growth at iiNet, has stagnated at 989,000 customers over the past year.
