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Organic growth drives TPG's 31 percent lift in net profit for FY15

TPG has achieved AU$224.1 million in net profit for the 2015 financial year due to organic growth it experienced in both its consumer and corporate division.
Written by Aimee Chanthadavong, Contributor

TPG has announced a 31 percent lift in net profit after tax to AU$224.1 million for the financial results for the year ended July 31, 2015.

The company saw a 33 percent increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) for the year to AU$484.5 million.

TPG said the results mark the seventh consecutive year of strong growth for the group, driven by an increase in its consumer and corporate division.

The consumer division grew its consumer broadband subscriber base by 73,000 in the year, lower than the 77,000 subscriber growth that was achieved in the prior year. However, TPG said the FY15 growth excludes fibre-to-the-basement (Fttb) subscribers who now acquire their services through wholesale customers of the group.

The uplift in subscriber numbers increased the company's broadband subscribers to 821,000, and mobile subscribers of 320,000, as of July 31, 2015.

As a result, the company reported its consumer division achieved EBITDA of AU$239.7 million for FY15, up from AU$205.6 million for FY14.

On the corporate side, the company grew its EBITDA by 52.4 percent to AU$242.3 million for the year from AU$8.3 million in FY14. The company attributed the growth from the acquisition of AAPT, which contributed a full 12 months to the group's FY15 compared to FY14 where it was only five months.

"If AAPT had have been owned by the group for the whole FY14, the extra seven months would have contributed an additional AU$40.8 million EBITDA (based on AAPT's pre-acquisition annualised EBITDA run-rate of approximately AU$70 million)," the company said.

Breaking it down further, TPG said that AU$42.5 million of the AU$83.3 million EBITDA growth achieved by the corporate division in FY15 is attributable to the organic revenue growth post-acquisition of AAPT.

During the year TPG also finalised the acquisition of iiNet, a deal worth around AU$1.5 billion. The deal was approved by the Australian Competition and Consumer Commission (ACCC) following concerns iiNet customers had about the takeover. Prior the ACCC's approval however, iiNet shareholders voted in favour of the takeover bid by the telecommunications company.

The deal now puts TPG as the second-largest telco after Telstra, increasing its customer base to 1.7 million. However, TPG said because the acquisition was completed after July 31, 2015, there was no contribution from iiNet to the company's FY15 results.

Looking forward however, TPG expects to see results from the acquisition in FY16, saying directors anticipate the company will see continued organic growth.

"As only a few weeks have elapsed since the completion of the acquisition of iiNet, it is not yet possible to forecast with sufficient certainly the likely financial results for the combined group for the year ahead and, therefore, no specific guidance is yet provided for FY16," the company reported.

In its last ever financial 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.

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