Penn signs off with dividend increase
Need to know
- Increased final dividend 8.5cps fully franked, payment date 22 September
- Mobile earnings up 21% in FY22
- FY23f underlying EBITDA $7.8-8.0bn guidance
Investment implications
A confident Telstra Board has lifted its dividend for the first time since 2015. We see the increased dividend as a turning point for the stock and it will see upgrades to consensus dividend forecasts.
The result was at the top end of the guidance range with a very strong performance from mobile. Mobile EBITDA increased 21% with ARPU up 5.5% excluding an underlying accounting change. Postpaid net subscriber numbers increased 155k (+101k in FY21). FY23 guidance is a small narrowing of the range compared to previous guidance after including the acquisition of Digicel. Guidance now implies underlying EBITDA growth of 5% in FY23f at the midpoint of the range (excl Digicel).
The T22 Strategy has now been supplanted by the T25 Strategy which should keep a strong handle on the cost base which fell 5.8% in FY22. The digitisation of the business will continue with capex guidance lifting slightly to $3.5-3.7bn including around $350m of investment in inner-city fibre and around %150m for Digicel. The one-off nbn payments have now ended given the nbn rollout is complete.
FIGURE 1: TLS FY22 RESULT
Stock Overview
Share Price
Company Overview
TLS is Australia’s largest telecommunications provider in both mobile and fixed line services
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