Interim results for the 6 months to 30 September 2017 (H1FY18)

Strong growth momentum; acceleration in net adds

  • Net adds +46k (H1FY17: -29k) with double-digit growth in both Retail and Wholesale bases; opportunity to step up investment in growth to deliver further strong net adds progress in H2
  • Return to on-net revenue growth in Q2 (+1.3%)
  • Continued reduction in churn to 1.3% (H2 FY17: 1.5%)
  • 1.6m customers now on FLPP (31 March 2017: 1.0m) - over 50% of Retail base
  • Strong growth in fibre (+161k) and TV (+19k); sustained growth in Ethernet base (+4.3k)
  • Simple and compelling new mobile proposition to be launched in Q3
  • Continue to explore co-investment opportunities in FTTP; begun build of further 40,000 homes in York
  • Investment in growth to drive FY Headline EBITDA(1,2) towards lower end of £270m-£300m guidance

                                   H1FY18 Financial Highlights

  • Headline EBITDA(1,2) £95m, excluding MVNO loss (H1FY17: £144m excluding MVNO loss)
  • Statutory operating loss £42m (H1FY17: £44m profit)
  • Headline Revenue(1,2) -1.8% excluding Carrier (H1FY17: -3.4%; H2FY17: -3.1%)
  • Statutory Revenue £856m (H1FY17: £902m)
  • On-net revenue -1.1%; Corporate (ex-Carrier) +2.2%; Data +10.7 %, Legacy Voice -8.2%
  • Headline(1,2) operating cash flow £46m (H1FY17: £-28m)
  • Statutory loss before tax £75m (H1FY17: profit £30m); statutory EPS -7.5p (H1FY17: 2.2p)
  • H1 dividend 2.50p (H1FY17: 5.29p); H1 Headline net debt/EBITDA(1,3) 2.88x (H1FY17: 2.51x)

Tristia Harrison, Chief Executive of TalkTalk commented:

"When we simplified and reset the business in May we said our priorities were growth, cash and EBITDA, in that order. The first half performance shows we are delivering on that plan. We have now delivered a third consecutive quarter of growth in our broadband base, with both Retail and Wholesale bases growing; returned to on-net revenue growth; and delivered lower churn than a year ago. Our clear value proposition is resonating strongly against an uncertain economic environment and underpins our plan to simplify and focus all our investment in delivering affordable, reliable fixed connectivity to both homes and businesses”.

"We expect to step up our planned investment in growth in the second half, as we take advantage of the strong demand we are seeing for our fixed low price plans; fibre take up and affordable propositions in both our residential and B2B markets.  Our revised strategy of focusing the business on fewer, clearer priorities is re-establishing TalkTalk as the value provider of choice in the UK fixed connectivity market.”

Download PDF