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Published 21 August 2013 12:06, Updated 22 August 2013 08:32
It’s good to be number two: iiNet’s 840,000 broadband customers delivered chief executive Michael Malone a $60.94m profit to talk up. Photo: Jim Rice
Internet service provider iiNet has reported an impressive 64 per cent boost in full-year profit, in part because it had a good year but also because of abnormal factors that won’t recur.
The statutory profit for the year ended June 30, 2013 was $60.94 million.
This was boosted by a rebate of $5.66 million (net of tax) related to excess internal interconnection charges in prior periods recognised in December 2012.
The gain is also inflated by the fact that the company paid an extra $7.80 million in income tax in the 2012 financial year because retrospective legislation prevented the company from claiming certain tax deductions.
However, the boost in profit is also because iiNet’s underlying business is growing.
iiNet chief executive Michael Malone says the company has cemented its position as the number two broadband provider, with 840,000 customers as of June 30.
“iiNet’s recent entry into the S&P/ASX 200 Index was a proud moment, but I am more excited about the impressive shareholder returns we have been able to generate over the past 12 months. iiNet delivered a return on equity of 20 per cent and continued to grow its dividend,” Malone says. “While revenues have increased, margins have grown more as acquisition synergies have been delivered, cost-out initiatives have been implemented, and products per customer have increased to 2.23.”
Revenue from ordinary activities was up 13 per cent to $940.99 million, due both to normal growth and acquisition.
TransACT Group and Internode were part of iiNet for the entire 2013 financial year, compared with only seven months of the 2012 financial year.
Costs increased by 11 per cent to $858.83 million, up from $776.28 million the previous year.
iiNet has reported earnings before interest, depreciation and amortisation of $187.01 million, up 29 per cent year on year.
The company declared a fully franked dividend of 19¢ per share for the full year, up 36 per cent.
Earlier this week iiNet launched a new all-you-can-eat brand called Jiva and earlier in the month it announced its intended purchase of South Australian ISP Adam Internet.