1st Feb 2019 08:04
LONDON (Alliance News) - TalkTalk Telecom Group PLC on Friday said earnings for its current financial year are set to miss analyst consensus.
Looking to its year ending March, TalkTalk said its underlying business in on track with "significant" year-on-year headline profit growth expected.
It is guiding for headline earnings before interest, tax, depreciation, and amortisation of GBP245 million to GBP250 million, from GBP197 million a year prior. This is below consensus, however, of GBP259 million.
Earnings will be hit between GBP10 million to GBP15 million due to accounting changes, investment and mix in the Fibre segment.
TalkTalk is confident on "strong" earnings growth in its year ending March 2020, and should meet market expectations of GBP271 million.
In the nine months to December, TalkTalk has added 148,000 net customers to its broadband services, with guidance for its entire year ending March "in excess" of 150,000.
Third quarter customer growth was 44,000, from 37,000 in the same period a year before, with double-digit growth achieved in both Consumer and Business-to-Business.
TalkTalk reported a "record" accelerating fibre uptake for the quarter, at 146,000 net adds, compared to just 89,000 year-on-year.
Churn is low, TalkTalk continued, at 1.16% in the quarter from 1.25% a year before.
Overall, third quarter revenue increased 2.9% year-on-year excluding carrier and off-net to GBP386 million. Headline on-net revenue has risen 4.3% to GBP316 million.
Chief Executive Tristia Harrison commented: "We continue to see strong trading momentum in the business, with customer growth ahead of expectations. The third quarter was the eighth consecutive quarter of rising customer numbers and we saw record demand for Fibre.
"The underlying business is on track. The change to earnings guidance is due to IFRS 15 timing adjustments and investment in growth."
She added: "Year on year, we have increased revenue by growing the base and stabilising ARPU, which combined with lower costs is driving improved earnings. Our significant customer momentum, combined with the benefits of our reorganisation and HQ move, gives us confidence in strong earnings growth for financial 2020."
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