The Telstra Group Ltd (ASX: TLS) share price has risen after the telco delivered an interesting update at its AGM.
Telstra was holding its annual shareholder meeting to conduct votes and tell investors how things are looking.
FY24 update
The main thing for investors to know is that Telstra confirmed that its T25 strategy is on track, including its growth ambitions for both underlying (EBITDA) and profit / earnings per share (EPS).
Underlying EBITDA guidance is consistent with its T25 ambition for a mid-single-digit compound annual growth rate (CAGR) between FY21 to FY25. In other words, it’s expecting a growth rate of roughly 5% each year between FY21 to FY25.
In dollar terms, the underlying EBITDA is expected to come between $8.2 billion to $8.4 billion, up between 2.5% to 5% in FY24. While that’s not huge growth, it’s another step in the right direction, which should be useful for the Telstra share price.
Free cashflow after lease payments, including strategic investments, is forecast by Telstra to be between $2.8 billion to $3.2 billion.
The company said that not only is it suffering from inflation, but it’s seeing traffic on its mobile network is growing at around 30% each year, while “CPI data shows that telecommunications pricing has reduced in real terms in recent years.” Its cost reduction goal is being challenged by high inflation.
Telstra has decided to hold on its InfraCo Fixed division because it plays an important role, particularly in an inflationary environment.
Overall, the business is still focused on delivering long-term, sustainable growth, and the objectives and principles of the capital management framework, which includes growing the dividend.
Maxine Brenner gets through
According to reporting by the Australian Financial Review, new Telstra director Maxine Brenner’s appointment was not backed by 17% of the vote. She is stepping down from the Qantas Airways Limited (ASX: QAN) board following the intense scrutiny the airline has come under following a number of negative events, including ACCC action. Some shareholders were questioning whether she would be the right choice for the Telstra board.
Final thoughts on the Telstra share price
Since mid-August, Telstra shares have fallen around 10%. I think it’s better value today and the fact that dividends and profit keep growing is a positive.
I think it’s a good large cap to own, though there are other ASX dividend shares
