Despite a flat first half profit, internet provider iiNet has increased its number of broadband customers to 975,000, just behind those of bigger rival Optus.
iiNet on Thursday said it had added 25,000 new broadband customers to its books in the first half of 2014/15, while Optus last week revealed its total internet customers have dropped to 988,000.
iiNet's net profit grew by just one per cent to $32 million in the six months to December, despite revenues lifting 11 per cent to $547 million.
Investors were unimpressed with the result, stripping 80 cents, or 11.1 per cent from its shares to close at $6.41.
IG market strategist Evan Lucas says return on equity and earnings per share are flatlining, causing investors to jump off what has been a high-growth stock.
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"If you look away from the top-line numbers, operational expenses are high, underlying earnings are dropping faster than expected and broadband subscriptions were under what the market wanted," Mr Lucas said.
"It's a question of whether this growth stock company is starting to find headwinds and competition, rather than being what it was - a company raging against the bigger players and offering a good product."
But iiNet chief executive David Buckingham was pleased with the growth shown in the results, while he said a lower customer churn rate shows customer service is top quality.
"We've invested in our call centres and our services - and we're seeing the benefit of that in a lower churn," he said.
The company also increased revenue from business customers by five per cent to $106 million.
However its recent acquisition tech2, which was bought to support National Broadband Network installations, made a $1 million loss.
"The work we've been getting from NBN has been very patchy," Mr Buckingham said.
Mr Buckingham expects a stronger second half as the rollout of the NBN ramps up across metropolitan areas of Australia.
He said tech2 will be critical in maintaining strong customer service as the connections crank up.
"We're geared up - we've invested to be ready for growth."
iiNET PROFIT FLAT
* Net profit of $29.5m, up 1 pct from $29.1m
* Revenue of $547m, up 11.5 pct from $493m
* Fully franked interim dividend up 10 pct to 10.5 cents
