TPG Telecom Limited (ASX: TPG) added 100,000 mobile subscribers in the first half of the year, and says it's well-positioned for "strong revenue momentum" after bedding down its regional network infrastructure sharing agreement.
The Vodafone owner reported a 2.2% increase in first-half service revenue to $2.06 billion and said it enjoyed subscriber growth across major metropolitan and regional centres and lower customer churn.
Average revenue per user also grew, up 33 cents to $34.97.
Net profit was $32 million, up $25 million from the previous corresponding period, while operating free cash flow was up 34.6% to $171 million.
TPG will also return up to $1.61 per share to its shareholders by distributing $3 billion of the $4.7 billion in proceeds from the sale of a significant fibre and fixed assets business to Vocus.
Despite this, TPG shares dipped 1.7% to $5.23 on the news.
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A banner period for TPG Telecom
Managing director Iñaki Berroeta said it was a "transformational half year" for the company.
We are now mobile-led and simpler to run following the sale of our fibre infrastructure and enterprise, government and wholesale fixed assets to Vocus.
Following the establishment of our regional network infrastructure sharing agreement, with greater mobile coverage across Australia, we are now positioned for growth and strong revenue momentum. We are well-placed to continue to win market share in mobile and we are focused on delivering value for customers and shareholders by running our network smarter, simplifying and digitising the customer experience and maintaining operating cost discipline.
Trimmed-down TPG primed for growth
Mr Berroeta said TPG's capital-efficient operating model following the Vocus transaction would underpin its capital management plans in the coming months and "further cash flow upside in years to come."
The response to our regional network expansion, promotions and brand refreshes in 2025 to date has been very promising. Our mobile growth this half was the strongest since borders reopened post-COVID, despite a reduction in international student numbers, and was stronger than both our competitors across proprietary brands.
TPG will pay an unfranked interim dividend of 9c per share on October 3 to shareholders on the books on September 4.
The $3 billion cash distribution will be subject to shareholder approval at an extraordinary general meeting, while minority shareholders will also be able to reinvest up to $688 million at a discount.
Jarden analysts said the result was neutral for TPG stock, and they had a $5.30 price target on TPG.
