Cheap broadband is paying off: TPG are flying high on profits of $55m – up 65%.

Click to enlarge

The ISP announced its first half year financials to 31 January 2012 which saw earnings before tax increase 17% to $131.9m.

Subscriber growth was driven by the TPG’s fiercely priced  ADLS2+ and home phone bundle plans, which grew by 49,000 subscribers during the six months, it said yesterday.

However, there was a 23,000 decline in standalone ‘on-net’ services and ‘off-net’ subscribers (7,000), with total net increase of  19,000.

And its fledgling mobile business launched in September is also showing “momentum” with net growth of 21,000 customers in the 6 months, bringing TPG’s total mobile base to 222,000.

Cashflow was “very strong” at $76.6m (after tax, interest and capital expenditure), which enabled the acquisition of cloud firm IntraPower for $12.8 million last year and the purchase of “significant” shareholding in iiNet, which it was rumored to be keen to acquire also.

Net profit after tax was $55.7m, a 65% increase over same time 2011.

The Group is also “well positioned” to achieve its earnings guidance for the full year of $250m-$260m.

During the half year the Group created a Corporate division with the corporate, government and wholesale businesses of TPG, Soul, and PIPE, which delivered “excellent” first half results, providing 44% of the Group’s total earnings.

TPG’s fibre network expansion has also continued over the half with an additional 417km, a 26% increase over 31 July 2011, to a total of 2,264km.

Earnings per share increased by 61% to 7.1 cents per share.

In light of the strength of Group earnings, the Board of Directors declared an increase in the interim FY12 dividend by 22% to 2.75 cents per share (fully franked), payable on 22 May to shareholders on the register at 17 April 2012.