17/08/2009 - 09:15

iiNet FY profit jumps 28% to $25m

17/08/2009 - 09:15

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Australia's third largest internet service provider, iiNet, has posted a 28.8 per cent jump in full year profit after lifting subscriber numbers and says it is well placed for the current financial year.

Australia's third largest internet service provider, iiNet, has posted a 28.8 per cent jump in full year profit after lifting subscriber numbers and says it is well placed for the current financial year.

The Perth-based company posted a net profit of $25.63 million for the year to June 30, up from $19.90 million in the previous financial year.

iiNet said the lift in profit was a result of continued sustained growth in its broadband and telephone products.

The result was also boosted by the full year contribution from the Westnet business, a rival internet service provider that it acquired for $81 million, against only a month in the comparative financial period.

The company said earnings before interest, taxation, depreciation and amortisation (EBITDA) lifted 36 per cent to $67 million, while revenue was up 67 per cent to $418 million in 2008/09.

iiNet said it grew its Naked DSL subscribers by 123 per cent during the year and now has more than 67,000 subscribers.

"We were the first to market with this product, providing customers with unrestricted broadband speeds without the added costs of paying for a traditional phone line that they dont use," managing director Michael Malone said in a statement on Monday.

"And Naked is still growing at 1000 customers per week."

Mr Malone puts this growth down to changing consumer attitudes.

"I think it is (about changing attitudes), and not about saving 10 to 20 bucks a month," he told WA Business News.

"Really, what I think it's about is people saying 'I don't want to be slugged a rental charge per month."

But he admits the growth of Naked DSL subscribers has been surprising.

"I was pretty gobsmacked it got this far, as we thought it would be a niche product," he said.

"It's certainly shown itself to be a much more mainstream product and more people continue to take it up."

Mr Malone said despite the difficult economic times, overall customer service numbers had increased by 10 per cent to more than 753,000 representing an eight per cent share of the broadband market, up from four per cent in the previous financial year.

The federal government's National Broadband Network (NBN) would provide many opportunities for the company, Mr Malone said.

"In terms of the key criteria we were looking for in a NBN - open access, structural separation, fixing backhaul `black spots' and regulatory reform - the government has delivered a true vision," he said.

"We see the government's open-access NBN as a fantastic new opportunity for iiNet.

"We are well placed for an even better year in 2010.

"But looking at the NBN from the short term, it currently provides for endless amusement for industry members as we're all talking about it but we don't have any details yet.

"We don't have prices, deatils on the technology or the timeframes for roollout."

iiNet declared a full franked final dividend of five cents, taking the total dividend for the year to eight cents per share, compared to seven cents in the prior financial year.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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