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iiNet boosts net profit and revenue by 11 percent in final results

iiNet reported that during the 2015 financial year total profit reached AU$70 million, due to an increase in customer numbers, and an expansion in products and services.
Written by Aimee Chanthadavong, Contributor on

iiNet has reported that both revenue and profit jumped up 11 percent for the full year ending 30 June 2015, in its last ever set of results.

The telco recorded that revenue reached AU$1.12 billion while profit hit AU$70 million for the financial year. The company attributed the increases to continued organic growth in residential and business broadband customers, as well as its continued expansion of services and products, including increased mobile hardware sales following the launch of the most recent iPhone in November 2014.

In February, the company reported that the rollout of the National Broadband Network added 25,000 broadband customers, which grew its total fixed-line customer base to 975,000 in the first half of the financial year.

Additionally, iiNet said revenue was offset by higher hardware, network, and carrier costs, and additional costs attributable to the 60 percent acquisition of Tech2 Group in August 2014. The attributable one-off costs were valued at a total of AU$3.5 million net of tax.

The financial results come as the Australian Competition and Consumer Commission (ACCC) and the Australian Federal Court approved TPG's plan to takeover iiNet, a deal worth around AU$1.5 billion last week.

As part of the approval, iiNet will be delisted from the Australian Securities Exchange, and shares in iiNet will be suspended from trading from the close of trade on 24 August, 2015.

The consumer watchdog initially expressed concerns that the acquisition would lessen competition in the retail fixed broadband market, particularly in the short term. However, ACCC chairman Rod Sims concluded it "would not reach the threshold of a 'substantial' lessening of competition as required under section 50 of the Competition and Consumer Act".

The deal will see TPG acquire 100 percent of iiNet shares, and will result in TPG becoming Australia's second-largest fixed-line telco after Telstra, increasing its customer base to 1.7 million. TPG will pay AU$9.55 per iiNet share, incorporating a AU$8.80 cash or scrip consideration and AU$0.75 cash per share.

Late last month, iiNet shareholders also voted in favour of the takeover, with 95.09 percent voting in favour and only 4.91 percent voting against. A total of 105.8 million shares voted on the resolution, with 100.63 million votes in favour and 5.2 million votes against.

TPG's initial all-cash offer of AU$1.4 billion in March was eclipsed by rival telco M2's predominately scrip AU$2.25 billion counter-bid in April, which was backed by iiNet, resulting in TPG upping its offer the following month.

M2's offer would have seen 0.803 M2 shares swapped for each iiNet share, plus a AU$0.75 special dividend.

During the year, iiNet was also caught up in a court case with film studio Dallas Buyers Club. The Federal Court of Australia recently ruled against Dallas Buyers Club's draft letters that it had planned to send out to almost 5,000 Australian IP addresses who allegedly breached its copyright by downloading infringing copies of the film.

In April, the Federal Court ordered internet service providers iiNet, Dodo, Internode, Adam, Amnet, and Wideband to disclose the customer details associated with 4,726 IP addresses that had allegedly breached the copyright of Dallas Buyers Club by downloading infringing copies of the film.

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