Shares in Subiaco-based internet service provider iiNet fell by 11 per cent after it reported a flat interim profit and said competition had become more aggressive in the fight for broadband customers.
iiNet lifted net profit by 1 per cent to $29.5 million for the six months to December, with revenue up by 11 per cent to a record $547 million.
Chief executive David Buckingham said while the competitive landscape had become more aggressive over recent months, this was not something new for iiNet.
“With a proven strategy of focusing on product innovation and customer service, iiNet has successfully addressed increased competition in prior years while continuing to grow,” Mr Buckingham said.
“What’s different today is that iiNet is a much larger company with substantial scale and strong financial position, allowing it to more effectively respond to competitive challenges in a way that ensures long-term shareholder value is not diminished.”
iiNet’s cash flow fell to $58 million, on the back of increased inventory for new mobile products, and the acquisition of a majority interest in communications build services provider Tech2 Group.
But the company increased its interim dividend by 17 per cent to 10.5 cents per share, fully franked.
“We have improved our core broadband products with refreshed plans and grown our product line to include standalone mobile phone contracts, Apple iPhone products, home installations and tech support for NBN and audio-visual systems,” Mr Buckingham said.
“This has delivered strong top line growth with record revenues generated over the last six months.’’
In the past six months, Mr Buckingham said, the business attracted 25,000 new broadband customers, and 50,000 over the past year.
“NBN continues to represent a significant area of growth for the company, with iiNet now having over 60,000 NBN and fibre customers,” he said.
“Given iiNet’s position and product capabilities, the company remains well positioned to capitalise on the changing landscape of a ramped-up NBN rollout plan.”
iiNet shares were 11 per cent lower at $6.41 per share at the close of trade.
