The TPG Telecom Ltd (ASX: TPM) share price could get a welcome boost today following a promising half year profit result.
Here are the key figures from the TPG half year report:
- Revenue rose 8% to $1.24 billion
- Profit rose 11% to $224 million
- A fully franked dividend of 8 cents, up 14%, is payable in May
- Underlying operating profit (EBITDA) rose 8% to $473 million
Having recently acquired iiNet, TPG Telecom's results were boosted by the revenue injection from its broadband business, as well as synergies, and organic growth.
Pleasingly, TPG Telecom's Corporate and Consumer businesses both continued to show strength, with revenue and operating profit (EBITDA) growing during the period.
Total broadband subscribers stood at 1.91 million, up from 1.84 million in the same period last year. A total of 24,000 consumers were using TPG's fibre-to-the-basement (FTTB) network, which rivals the NBN. Pleasingly, churn rates across TPG Consumer and iiNet came in at just 1.4%.
The company now has 453,000 mobile subscribers.
In December, the company made its first big investment in Singapore with the purchase of mobile spectrum for S$105 million. TPG Telecom says network planning is progressing well, with an anticipated rollout cost of between S$200 million ($185 million) and S$300 million ($277 million).
The company spent $330 million in capital expenditure during the half, compared to just $133 million last year. Around $222 million of the expenditure was spent locally in Australia.
Looking ahead, TPG Telecom reiterated underlying operating profit (EBITDA) guidance of between $820 million and $830 million.
Buy, Hold or Sell TPG Telecom Shares
Today's result appears upbeat to me. The company is growing in key areas, investing for growth and paying a healthy dividend. Best of all, its shares look cheap. All that combines to make TPG shares a buy in my book.
