A lower discount rate is logical because the NBN is 100 per cent government owned: if applied, it would inflate the present-day value of the deal that Telstra is poised to re-create. 2 Property developer jailed for ‘Titanic’ $100m … 4 Santa comes early for Telstra shareholders. And …
The profit result that Telstra chief executive David Thodey handed down on Thursday was solid, Telstra’s dividend lift and $1 billion share buyback pleased investors, and the telco’s guidance on earnings from continuing operations was unchanged.
The $1 billion buyback Telstra announced on Thursday will be conducted by tender and will probably be priced at a discount to Telstra’s market price of between 6 per cent and 14 per cent.
What was more interesting however was a sign that Telstra is close to inking a new deal to co-operate with the Abbott government’s revised broadband rollout - one that could underwrite more cash returns to shareholders in years to come.
Telstra also booked a cash windfall during the year. It received $2. 4 billion from the sale of its CSL mobiles business in Hong Kong and most of its Sensis directories business, and has used only about $500 million of it on new acquisitions.
Telstra’s share price has more than doubled from a low of $2. 56 in November 2010 partly because Thodey has done a good job running the company, but it has also gone up because Telstra is a dividend-yield market darling.
Read more here: SMH