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Review of Group Entities
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NETPROFIT
AFTERTAX
INCREASED
69%
Excluding these irregular items, TPG’s underlying EBITDA for the year was $775.3 million, an increase of
$290.0 million or 60% over last year. This growth includes the maiden contribution from iiNet of $248.9 million
for the eleven and a quarter months post acquisition.
Consumer Business
The consumer division’s EBITDA for the year was $255.7 million, an increase of $16.0 million compared to last year.
This 7% increase reflects organic growth driven by ongoing broadband subscriber growth (up by 64,000 in the
year) and nine months of lower access costs arising from the ACCC’s fixed access determination.
As at 31 July 2016 the consumer division had 885,000 broadband subscribers and 304,000 mobile subscribers.
Corporate Business
TPG’s corporate division achieved an EBITDA of $269.3 million, an increase of $27.0 million compared to
$242.3 million last year. This 11% increase was achieved despite a negative $10.1 million accounting impact
on the division’s EBITDA for the year arising from the consolidation of iiNet. Excluding this the EBITDA growth
would have been $37.1 million or 15%.
This growth reflects the strong sales for the year and the continued margin expansion.
iiNet
iiNet contributed EBITDA of $242.6 million (for the eleven and a quarter months post acquisition) inclusive of
$6.3 million of restructuring costs arising from integration activities. Without those costs the EBITDA result would
have been $248.9 million. By comparison, iiNet reported an underlying EBITDA of $201.7 million for its 2015
financial year.
The principal drivers of this year’s EBITDA growth were:
4
realisation of post-acquisition integration benefits;
4
nine months of lower access costs arising from the ACCC’s fixed access determination; and
4
an increased contribution from Tech2.
As at 31 July 2016 iiNet had 983,000 broadband subscribers.
Cash Flow and Gearing
TPG delivered another strong cash flow result in the 2016 financial year with $759.2 million of cash generated
from operations (pre-tax). After tax, capital expenditure and Indefeasible right of
use lease payments, TPG had free cash flow of $318.0 million.
At the end of the year TPG had bank debt of $1,350 million and a net debt
to underlying EBITDA leverage ratio of approximately 1.8 times.
Dividend
In light of TPG’s strong cash flow and
earnings growth, its board of directors
increased the final dividend to 7.5 cents
per share fully franked. This brought total
dividends for the year to 14.5 cents per
share fully franked, an increase of 26%
over last year.
Contribution
TPG contributed a net profit of $97.5 million
to the Group (2015: $60.2 million 26.9% held).