Telstra Group Ltd (ASX: TLS) shares are on the move on Tuesday.
In morning trade, the telco giant's shares are up 0.5% to $3.89.
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Why are Telstra shares rising?
Investors have been buying Telstra's shares this morning for a couple of reasons.
One is a positive session for the ASX 200 index on Tuesday following a strong night of trade on Wall Street.
Also potentially giving the telco giant's shares a lift on Tuesday has been the release of its annual general meeting presentation ahead of the event.
What did the company say?
Telstra's annual general meeting presentation focused on both the past 12 months and the 12 months that lie ahead.
In respect to FY 2024, Telstra chair, Craig Dunn, said:
In FY24, we achieved our third consecutive year of underlying EBITDA growth. And when coupled with a significant improvement in underlying return on invested capital, very importantly, this has allowed Telstra to deliver compound annual dividend growth of 4 per cent over the last three years. And this outcome has been achieved while maintaining a strong balance sheet and prudent debt levels.
Dunn spoke positively about the performance of Telstra's key mobile and infrastructure businesses but acknowledged that not all business units were performing as hoped. He adds:
Our mobiles business continues to perform very strongly, and we're focussed on maintaining this strength and momentum. Our infrastructure businesses are also performing well, reinforcing our confidence in our decision to retain ownership of InfraCo Fixed.
On the other hand, the performance of our Enterprise business has been disappointing, and its turnaround is important to get right. Vicki and our management team are facing into these challenges, and the Board believes they're making the right decisions here. The reset of this business, however, will take time, discipline and focus.
The future
Telstra's CEO, Vicki Brady, was tasked with talking about the company's outlook.
The good news is that Brady appears confident that Telstra is going to achieve its guidance in FY 2025.
Despite challenges in Enterprise, the strong action we took in the second half of FY24, and growth in all other parts of the business, means that overall, we are on track to achieve our ambitions, including growth in underlying EBITDA, Earnings Per Share and Return On Invested Capital.
We expect continued Underlying EBITDA growth and tightened our guidance range in August upwards to $8.5 to $8.7 billion. Business-as-usual capex including Digicel Pacific of $3.2 to $3.4 billion continues to demonstrate our disciplined approach to capex. Free cashflow before strategic investment is expected to be between $3 to $3.4 billion. This guidance includes around $300 million of cash outflow related to FY24 restructuring costs.
Telstra shares are largely flat on a 12-month basis.
