TPG soars on H1 results

Telco's shares hit record high as it upgrades full-year forecasts after lifting first-half profit and revenue

TPG Telecom shares have soared as the telco upgrades its full-year guidance on the back of lifting both its first-half profit and revenue.

At 10.22am (AEDT), TPG shares were 8.16% higher at $6.23, against a benchmark index fall of 0.48%. Shares earlier lifted to $6.35, a record high.

The telco reported a 15% lift in profit attributable to owners to $90.1 million in the six months to January 31, 2014, compared with $78.3m in the six months to January 2013.

Revenue rose by 11% to $394.6m in the half, up from $357m in the previous corresponding period.

Sales were higher than predicted by a Bloomberg survey of three analysts, which expected a result of $383.3m.

TPG will pay an interim dividend of 4.5 cents, fully franked, on May 20 to shareholders on the record on April 15.

Directors have lifted full-year guidance for earnings before interest, tax, depreciation and amortisation (EBITDA), excluding AAPT, to $325m to $330m, up from a range of $290m to $300m.

AAPT set to boost earnings

AAPT is expected to contribute EBITDA of $15m to $25m, net of one-off acquisition and integration related expenses of $7m to $12m, for the five months from acquisition to July 31.

The estimated full-year EBITDA range for the merged group is $340m to $355m, TPG said.

TPG entered an agreement to acquire Telecom New Zealand Australia and subsidiaries, including AAPT, for $450m in December 2013.

The suitor said the acquisition had no impact on the first-half results as it was completed after the half-year ended.

TPG said after funding the acquisition through a combination of debt and cash reserves its debt to annualised EBITDA leverage ratio is less than 1.1 times.

Meanwhile, TPG said free cashflow for the half was $103.1m, allowing it to repay its remaining debt and increase its dividend.

Consumer business continues to grow

TPG said its consumer division's EBITDA was $100.2m for the period after ongoing organic broadband subscriber growth.

The telco also noted an increase in contribution per subscriber due to tight cost control and a lift in average revenue per user from subscribers to home phone bundle plans.

TPG's consumer broadband subscriber base increased by 36,000 in the half-year.

The group had 707,000 broadband subscribers and 370,000 mobile subscribers at January 31.

Meanwhile, the corporate division reported an EBITDA of $64.5m, with revenue growth and an improvement in underlying margin.

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