TPG +7.39%: delivered a mixed 1H26 result, with revenue and underlying profit below expectations but importantly reaffirming FY26 guidance.
Key results:
- Revenue of A$2.43bn, ~4% below A$2.53bn expected.
- Net profit (NPAT) of A$35m, ahead of A$23.4m expected.
- Adjusted EPS of 1.8c, below 3.3c expected.
- Interim dividend of 10cps, up from 9c last year and ahead of ~9.1c consensus.
- FY26 EBITDA guidance maintained at A$1.67–1.74bn, bracketing the A$1.70bn consensus.
The earnings result itself isn’t particularly exciting, but the changing capital intensity of TPG is. Capex is expected to fall from ~A$750m in FY26 to A$650m in FY27 and then into a A$550–650m range in FY28, excluding spectrum. At the same time, mobile plan repricing should drive stronger average revenue per user (ARPU) growth in 2H, while operating costs are being held broadly flat.
MM’s view: We’re more interested in where TPG is heading than the relatively pedestrian 1H numbers. The investment case is increasingly becoming a cash flow and capital returns story, rather than one requiring significant earnings growth. If mobile pricing continues to improve while management delivers the promised capex reductions, TPG should have considerably more cash available for shareholders over the next few years – that’s the part of the story we find interesting.
MM is mildly bullish TPG
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