iiNET Limited (IIN)



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General Information
Company Name: iiNET Limited
Stock Code: IIN
Website: www.iinet.net.au
GICS Sub-Industry: Alternative Carriers
Market Cap ($M): 1,193
Equiv. Shares (M): 161

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 7.480 $ 7.400 $ 7.480 $ 7.400 $ 7.420 715,003 $ 0.060  0.809 %

Current Broker Consensus Recommendation more
Recommendation: Hold (3.4)
Recommendation Date: 28th Jul 2014
Brokers Surveyed: 5

Company Overview

Business Description:
iiNet Limited (IIN) is a DSL Internet Service Provider (ISP) supporting 1.7 million broadband, telephony, mobile and Internet Protocol TV (IPTV) services to a range of residential, regional and corporate customers across Australia.

Strategy Analysis:
IIN will continue its commitment to ADSL broadband, supported by the installation of its own DSLAMs, which provides a lower cost base than its competitors. Despite the National Broadband Network, rollout of its own DSLAMs will continue on a selective basis. Other strategies include: Brand launch campaigns for brand awareness, customer service and additional products such as VoIP, internet package and IPTV. iiNET reported NPAT of $31.94m for the half-year ended 31 December 2012. Revenues from ordinary activities were $473.6m, up 30% from the same period last year. The increase in revenue was attributable to the following: continued expansion of the services provided to existing residential and business broadband customers; the acquisition of the TransACT Group on 30 November 2011; and the acquisition of Internode on 31 January 2012. Diluted EPS was 19.7 cents compared to 9.5 cents last year. Net operating cash flow was $71.66m compared to $22.74m last year. The interim dividend declared was 8.0 cents compared with 6.0 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 62.3 38.5 1.8 19.2 21.0 2.8 100.0
2014  F 61.2 37.8 0.3 19.6 21.0 2.8 100.0
2013  A 61.0 37.7 57.4 12.1 19.0 4.2 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
iiNET (IIN) $1,196 M 0.5699 0.0960 0.0985 19.7340 18.0053 16.3905 0.0256 0.0296 0.0327

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
IIN 0.30 18.9 3.68 2.11 1.28
Market 1.00 16.6 1.25 2.15 1.66
Sector 0.27 17.1 3.68 1.73 2.07

Directors
Name Position Start Date
Mr Peter Richard James Non-Executive Director 28 November 2003
Mr David A.G. Grant Non-Executive Director 12 October 2006
Mr Patrick Redmond Joseph O'Sullivan Non-Executive Director 22 April 2014
Ms Louise McCann Non-Executive Director 14 April 2011
Mr Paul McCarney Non-Executive Director 22 April 2014
Mr Michael K Smith Non-Executive Director,Non-Executive Chairman 19 September 2007

Management
Name Position
Greg Bader Chief Business Officer
Maryna Fewster Chief Customer Officer
David Buckingham Chief Executive Officer
Steve Dalby Chief Regulatory Officer
John Lindsay Chief Technology Officer
Ben Jenkins Company Secretary

Substantial Shareholders
Holding Name
10,184,137 (6.32%) TPG Telecom Limited
9,012,162 (5.59%) Perth Internet Pty Ltd

Calendar of Events
Date Event
19 February 2015 Report (Interim)
23 September 2014 Report (Annual)
20 August 2014 Report (Prelim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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