Preliminary results for the 12 months to 31 March 2014 (FY14)

  • Over 1m TV customers at 12 May 2014; fastest growing TV business in the UK
  • One of the fastest growing B2B telecom operators in the UK; FY Corporate revenues +5.6%
  • 6th consecutive quarter of net adds growth (+10,000) delivers on-net base of over 4m
  • 5th consecutive quarter of y-o-y revenue growth (+4.9%) delivers full year growth of 3.4%
  • H2 EBITDA margin up 650bps to 15.5% (H1 9.0%); FY margin 12.3% (FY13: 17.4%)
  • Dividend per share 12.0p (+15.4%) in line with commitment
  • On track to deliver 4% CAGR in revenue and 25% EBITDA margin by FY17

FY14 Financial Highlights

  • Total revenue up 3.4% to £1,727m (FY13: £1,670m); H2 +5.0% vs H1 +1.8%
  • Corporate revenue up 5.6% to £340m (FY13: £322m): H2 +9.9% vs H1 +1.3%
  • Headline EBITDA £213m (FY13: £290m) after £112m of incremental investment in growth
  • Headline Earnings Per Share 6.8p (FY13: 14.9p); Statutory Earnings per Share 3.1p (FY13: 11.3p)
  • Dividend Per Share 12.0p (FY13: 10.4p)

Q4 Operating Highlights

  • Total revenue up 4.9% year-on-year to £448m (Q3 FY14: £436m)
  • On-net revenue up 7.2% year-on-year to £327m (Q3 FY14: £320m)
  • On-Net ARPU up 2.1% year-on-year to £26.93 (Q3 FY14: £26.79)
  • Corporate revenue up 11.0% year-on-year to £91m (Q3 FY14: £87m)
  • On-net net adds 25,000 (Q3 FY14: +107,000 including 84,000 Post Office customers)
  • Accelerating TV growth; 185,000 TV customers added, taking FY14 closing base to 917,000
  • On-net churn reduced to 1.5% (Q3 FY14: 1.6%)

Dido Harding, Chief Executive of TalkTalk commented:
I am delighted to report our first full year of revenue growth since demerger demonstrating that our strategy for growth is delivering. We have built a TV business with over one million customers in just 18 months - a quarter of our total customer base. We continue to grow faster than all the other UK TV operators put together and are confident that in time, all our customers will take TV. Our focus on data products for businesses is also delivering very strong growth and as a result, TalkTalk Business is one of the fastest growing B2B telecom operators in the UK.

Following investment in the first half, we delivered a sharp rebound in profitability in the second half combined with accelerating revenue growth. We are on track to deliver our financial targets by FY17, and are increasingly excited about the longer term growth opportunities beyond. As a result we are committing to another year of growing the dividend by no less than 15% in FY15.