Telstra’s $1.5bn dividend bonanza

Telstra has posted a record $4.12 billion annual profit and rewarded investors with an 8 per cent increase in ordinary dividends. The telco will also pay $1.5 billion in extra dividends during 2004-05 through a $750 million share buyback and $750 million in special dividends. Over the last financial year, sales grew 2.4 per cent to $19.2 billion with Telstra facing increased competition from its major rivals. But CEO Ziggy Switkowski pledged to return the telco to growth rates of 4-5 per cent by 2006. Switkowski also said the key to Telstra's future profit growth is keeping customers happy and decreasing churn. Customer satisfaction has meant increased costs, however, which is concerning analysts and fund managers.