Posted: 11 November 2015

TalkTalk Group Interim results for the 6 months to 30th September 2015

  • Strong acceleration in growth with Q2 revenues up 5.9% (H1: +4.7%)
  • 176,000 Revenue Generating Units added in period: +12.2% year-on-year
  • Growing quad-play and fibre penetration in base: mobile 16%; TV 39%; fibre 16%
  • On track to deliver FY16 in line with current market expectations pre-cyber attack impact
  • Interim dividend raised 15% to 5.29p (H1 FY15: 4.60p)
  • Material EBITDA growth in H2 and lower net debt; expect to grow final dividend by 15%

Cyber Attack

  • Significantly fewer customers affected than initially feared
  • Customer facing online sales and service channels now back in operation
  • One-off financial impact estimated at £30m-£35m
  • Offering all customers the choice of a free upgrade

H1 Financial Highlights

  • Total revenue up 4.7% to £912m (H1 FY15: £871m); Q2 +5.9%
  • On-net revenue up 7.6% (Q2 +8.9%), Corporate revenue up 6.2% (Q2 +6.7%)
  • Headline EBITDA* £90m (H1 FY15: £110m)
  • Operating Free Cashflow £38m (H1 FY15: £44m)

* Excluding exceptional items and amortisation of acquisition intangibles

H1 Operating Highlights

  • On-net ARPU up 6.1% to £28.08 (H1 FY15: £26.45)
  • On-net churn 1.5% (H1 FY15: 1.4%)
  • On-net Broadband base down 80k after 72k disconnections for non-paying customers
  • Underlying on-net net adds -8k (positive in Q2)
  • Mobile net adds +132k, Fibre +99k, TV +25k

Dido Harding, Chief Executive of TalkTalk commented:

"We have delivered H1 results in line with our plan and revenue growth accelerated strongly through the second quarter.  We have a robust plan to deliver a significant step-up in profits in H2, underpinned by the benefits of our transformation programme coming through strongly.

"We have recently been able to confirm that far fewer people were impacted by the attack than originally feared. However, TalkTalk takes the security of customers’ data extremely seriously and we are taking significant further steps to ensure our systems are protected, as well as writing to all our customers outlining what we are doing to keep their data safe. In recognition of the unavoidable uncertainty, and because we know that doing what is right for our customers will ensure the best possible outcome for the company over the longer term, we are today announcing the offer of a choice of free upgraded services to all our customers.

"TalkTalk is well established as the value for money provider in the fast growing quad play market and, notwithstanding the recent attack, remains well positioned to deliver strong and sustainable long term growth."