Shares in TPG Telecom (TPM), 27.7% owned by Washington Soul Pattinson, jumped nearly 12% in yesterday’s lacklustre market after it reported a sharp rise in profit for 2012-13 and faster than expected subscriber growth.
The company revealed a 64% jump in net profit to $149.2 million for the year ended July 31.
The 2011-12 result was cut by a $23.2 million one-off tax expense arising from retrospective changes to tax law.
Excluding this tax expense, TPG’s net profit rose 31%.
TPG said that earnings before interest, tax, depreciation and amortisation (ebitda) reached $293 million, up 12% on the previous year, and above the upgraded guidance in March of $285 million to $290 million.
On a regularised basis (stripping out some small gains), ebitda was just over $272 million for the year.
Directors said yesterday that ebitda was forecast to rise to a range of $290 million to $300 million for 2013-14.
That news and the better than expected update on subscriber numbers saw the company’s shares add more than 14%% or 53c to $4.23 yesterday.
TPM YTD – Solid profit report and outlook trigger TPG share surge
TPG said its broadband subscriber base grew by 76,000 over 2013, compared to 47,000 more in 2011-2012.
And, the number of subscribers to TPG’s home phone and broadband bundle plans rose by 130,000, which was offset by a fall of 40,000 in standalone on-net subscribers and a loss of 14,000 off-net subscribers.
TPG’s mobile phone subscribers increased by 105,000, compared to a rise of 54,000 in 2012.
TPG said the earnings growth was largely due to improved margins from investment in the group’s fibre network.
Dividend for the year was boosted 36% to 7.5c a share from 5.5c in 2011-12, with a higher interim of 3.50 (2.75c previously) and final of 4c a share (2.75c previously).
TPG said ebitda in its consumer division jumped by $31.1 million to more than $180 million thanks to the 76,000 rise in broadband subscribers and the business division ebitda rose 13% to $110 million.
The company said it paid down debt by $107 million and free cash flow rose to $174 million for the year.
