Andy Penn helped rebuild the trust between Telstra and the market; Telstra’s shares are up more than 50 per cent since he announced the T22 strategy in 2018.
Although reported net profit was down 4.6 per cent to $1.8 billion because of a range of one-off items, Telstra’s preferred measure of profitability, underlying earnings before interest, tax, depreciation and amortisation, leapt 8.4 per cent, with underlying earnings per share soaring 48.5 per cent.The cherry on top was the first increase in full-year dividends since 2015; the payout rose 3.1 per cent to 16.5¢.
Penn’s speech at Thursday’s results presentation contained a laundry list of achievements under the T22 plan: growing members of the Telstra Plus program to 4.5 million, shifting three-quarters of all service interactions with consumer and small business customers to digital channels and slashing costs by $2.7 billion.
Given Telstra’s line-up of 1800 product plans, the temptation to do the same must have been great. But Penn decided to effectively kill Telstra’s back book and instead shift Telstra’s entire customer base to the much smaller range of simpler plans.This was an important decision but also a practical one.
An interesting feature of the strong result from the mobile division in the 2022 financial year is the sharp rise in prepaid, where unique customers jumped by 215,000 and revenue services rose 14.2 per cent.
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