TPG Telecom (ASX:TPG) Announces Vocus Transaction Completion and Capital Management Plan
Capital Management
TPG Telecom has completed the Vocus transaction, generating net cash proceeds of $4.7 billion. The company proposed a cash distribution of up to $3 billion through a pro rata capital reduction and a reinvestment plan allocating up to $688 million to increase minority ownership. Additionally, TPG plans to repay up to $2.4 billion of bank borrowings, enhancing its financial position to be deemed “investment grade”.
Financial Performance
Pro forma financial results indicate strong year-on-year performance. The company provided FY25 guidance, expecting growth driven by operational efficiencies and reduced capital expenditure. TPG’s financial structure remains robust, with a targeted leverage ratio of approximately 1.3 times on a pre-AASB16 basis.
Dividend Policy
TPG Telecom targets an FY25 dividend of 18 cents per share, consistent with FY24, with plans to grow dividends over time in line with profit and cash flow. The dividend timing and franking extent will depend on franking credit generation and remain subject to market conditions and Board discretion.
Network and Subscriber Growth
TPG reported strong customer response across its brands, particularly outside Sydney, with subscriber growth of approximately 100,000 in the first half of FY25. Data traffic in regional areas increased by 82% compared to December 2024, supported by successful marketing initiatives and infrastructure sharing.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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