TPG TELECOM HOLDS BACK DIVIDENDS TO FUND NEW MOBILE NETWORK
Written on the 19 September 2017 by David Simmons
TPG Telecom (ASX: TPM) has reported a record financial year, but will hold back some dividends from shareholders to fund its new mobile network which is expected to cost around $1.9 billion.
The company reported a net profit after tax of $413.8 million for FY17 to July 31, an increase of 9 per cent over FY16.
However, the company will retain the profits in order to reinvest the money into the group's recently acquired mobile network.
TPG has slashed its final dividend from 7.5 cents to a fully franked 2 cents per share fully franked, payable on 21 November.
"The board has concluded that it is in the best interests of shareholders that a greater proportion of profits be retained in the company to be deployed in the mobile rollouts.
The company delivered a revenue lift of 4.3 per cent to $2.5 billion in FY17.
In terms of the group's rollout of its mobile networks in Singapore and Australia, TPG says it is making good progress.
The Singapore network is on track to achieve the first milestone of nationwide outdoor service coverage before the end of 2018.
In Australia, where the initial implementation of the mobile network is concentrated on the cities, implementation in Sydney, Melbourne, and Canberra is expected to be complete by mid-2018.
At around 11.30am (AEST), shares in TPG were more than 7 per cent higher at $5.62 per share.
Business News Australia
Author: David Simmons