12th May 2016 10:21
LONDON (Alliance News) - TalkTalk Telecom Group PLC Thursday said it had "bounced back" from the cyber attack that hit its business last October, although costs related to the attack and its restructuring programme hit its profit for its most recently ended financial year.
However, the telecommunications provider reiterated its guidance for the year ahead, expecting growth in earnings and a modest rise in revenue.
TalkTalk reported a pretax profit of GBP14 million for the year to end-March, down from GBP32 million the year before, as a rise in revenue to GBP1.83 billion from GBP1.80 billion was offset by exceptional items totalling GBP83 million.
Of these exceptional costs, GBP42 million related to the cyber attack on TalkTalk's business in October. This complemented costs related to the company's internal restructuring programme, dubbed Making TalkTalk Simpler. It delivered GBP21 million in savings as a result of this plan during the year, and expects to make a further GBP35 million to GBP40 million in savings in the year ahead.
TalkTalk said that following the cyber attack, customer sentiment towards the company improved quickly, and it saw its lowest level of churn in the fourth quarter in its history at 1.3%.
The company said that the cyber attack had led it to lose customers for "a short period", and had also resulted in an "extended period" where it was unable to trade effectively, in turn leading to delays in implementing a number of initiatives in its restructuring programme.
However, it said that actions it took following the attack to focus on its existing customers and "restore normality" had more than mitigated any lasting impact on the business. It took a number of measures to reverse the damage, including focusing on promotions for its existing customers and an unconditional free upgrade offer to all of its customers in December.
Elsewhere it made progress in growing its mobile customer base, adding 235,000 customers and taking its total base to 699,000. It also added 225,000 net customers for its fibre broadband, taking its total base to 704,000.
On a headline basis, stripping out exceptional items, the company reported earnings before interest, tax, depreciation and amortisation of GBP260 million, up from GBP245 million the year before.
TalkTalk continues to expect to report headline Ebitda of GBP320 million to GBP360 million for its current financial year. It said it expects revenue to grow modestly for the year as a whole, although it does expect to see its headline revenue fall in the first half, and return to growth in the second half.
The company proposed a dividend of 10.58 pence, taking its total dividend to 15.87 pence, up from the 13.80 pence it paid the previous year. It expects to pay a dividend for its current year "at least in line" with this level.
"The business bounced back strongly in the final quarter following the cyber attack in October. We recorded our lowest ever churn and stabilised the broadband base, testimony to the speed with which customer sentiment towards TalkTalk has recovered, the success of our greater focus on existing customers, and the growing benefits of our simplification programme," said Chief Executive Dido Harding in a statement.
"There has never been a clearer space for a trusted value champion and our learnings from and experience since the cyber attack have helped to focus our plans for the year ahead. We see strong opportunities for growth across all our products, both for consumers and for businesses, against the backdrop of an increasingly supportive regulatory environment," Harding added.
Shares in TalkTalk were up 1.1% at 273.95 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
TALK.L