24th May 2018 10:00
LONDON (Alliance News) - TalkTalk Telecom Group PLC cut its dividend Thursday after it swung to a loss on the back of rising costs associated with its restructuring activities as its sold part of its business-to-business unit for GBP175 million.
For the year to March end, the internet provider reported a pretax loss of GBP73 million from a profit of GBP70 million year-on-year.
Operating loss amounted to GBP18 million from a GBP95 million profit in 2017. The company said the operating loss was driven by exceptional costs aimed at reorganising and simplifying the business.
Revenue for the year was GBP1.70 billion, down 4.5% from GBP1.78 billion for 2017 despite an increase in customer base.
TalkTalk said it added 192,000 customers closing the total customer base at 4.14 million.
The company cut its final dividend by 70% to 1.50 pence from 5.00p the year before. Total dividend was down 61% to 4.00p from 10.29p.
"When we reset TalkTalk a year ago, we said we would focus on delivering sustained customer growth whilst radically simplifying the business. One year into the strategy, we are making good progress on both," Chief Executive Officer Tristia Harrison said.
"Our customer base grew by 192,000 in FY18, underpinned by our unique propositions and our lowest ever churn. We have also made real progress in simplifying the business to focus on core, fixed connectivity."
The company said it expects a 15% increase in earnings before interest, taxes, depreciation and amortisation in 2019.
In a separate announcement on Thursday, TalkTalk said it agreed to sell its Direct B2B business to Daisy Group for a total consideration of GBP175 million.
The sale of Direct B2B - which represents less than 20% of the company's B2B revenues - will negatively impact TalkTalk financial 2019 earnings before interest, taxes, depreciation and amortisation by GBP15 million. The company said, however, it will strengthen its balance sheet.
For financial 2018, headline Ebitda stood at GBP233 million, down from GBP361 million the year prior.
Daisy is currently a partner of TalkTalk so customers will continue to be served on the same network, the company said.
Also on Thursday, TalkTalk said that Chief Operating Officer Charles Bligh will step down from the company on June 30. Non-Executive Director James Powell also stepped down with immediate effect.
TalkTalk shares were trading up 1.0% at 122.40 pence.
Related Shares:
TALK.L