ARN

TPG revenue hits $574.5 million

The ISP's positive results were largely attributed to strong broadband subscriber base growth as well as the popularity of its home phone and Internet bundle packages.

Internet service provider, TPG, has reported stellar results for its 2011 financial year with $574.5 million in revenue and $78.2 million in net profit after tax.

Revenue and net profit was up 13 per cent and 40 per cent, respectively. The company’s financial year period ended July 31, 2011.

Earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $234 million, up 37 per cent, which was slightly above its guidance of $225-230 million.

TPG’s positive financial results were largely attributed to a stunning growth in its organic broadband subscriber base, which increased by 59,000, along with the popularity of its home phone and Internet bundles.

On-net broadband users, which are customers serviced through TPG’s own infrastructure, actually jumped by 77,000 but net growth was off-set by the loss of off-net customers.

The latter group brings in a lower margin because they are serviced on third-party infrastructure.

As of July, TPG has 548,000 subscribers overall – 113,000 on-net, 107,000 on-net broadband and home phone bundle as well as 328,000 off-net customers.

The number of bundled customers grew from 9000 from the last financial year to 107,000, up by 98,000.

Thanks to TPG’s best selling bundle, the $59.99 package, the company’s overall average revenue per user (ARPU) has gone up. It is now between $46-48. Home phone and broadband bundles performed much better with an ARPU of $52.20 excluding phone calls.

Since acquiring Pipe Networks for $373 million in November 2009, TPG finally had a chance to factor its new company into its full financial year results.

In financial year 2011, Pipe contributed $91.3 million of revenue and $57.2 million EBITDA to the TPG group.

Pipe grew its cable network to 1847km thanks to a number of capacity contracts with companies such as Vodafone Hutchison Australia (VHA).

Utilisation of its network is at 33 per cent which is expected to drop as Pipe builds new fibre capacity to service the VHA contract. This, however, will provide new opportunities due to expanded network reach, according to its parent company.

Overall, TPG maintained a strong cash flow and was able to reduce bank debt by $100 million.

Its guidance for financial year 2012 is between $250-260 million in EBITDA.