TalkTalk Business has continued to see impressive growth up 5% year on year

TalkTalk Business is a fast-growing part of TalkTalk Group, accounting for 30% of total Group revenues 

TalkTalk Telecom Group PLC’s preliminary financial results for the 12 months to 31 March 2016 have today revealed strong and profitable growth for TalkTalk Business. Overall revenues for TalkTalk Business account for 30% of the Group and have grown by over 5% year-on-year. TalkTalk Business is a significant, profitable and fast-growing part of the business, and the division has ambitions is to double its size over the medium term, driven by continuing growth in data products, next generation voice services and broadband customer base growth delivered via its direct and partner (wholesale) channels. 

TalkTalk Business is one of the fastest growing B2B telecoms providers in the UK, serving the needs of businesses and public sector customers, as well as small businesses, partners, systems integrators and carriers around the country. TalkTalk Business is also one of only two national wholesalers of broadband and fibre to the cabinet.

The on-net wholesale base, comprising the retail customers of businesses such as the Post Office and Utility Warehouse, grew year on year, as did TalkTalk Business’ Direct channel on-net base. Corporate revenues within TalkTalk Business were up 2.4% compared to a strong year last year (FY15: +10.3%), with compound annual growth since FY14 of over 6.0%.

TalkTalk Business has also seen demand for data services continue to soar, with over 9,000 new high speed data lines connected and a strong pipeline of orders for the end of the year, up 23.7% year-on-year, thanks to TalkTalk Business’ commitment to providing great value, high speed connectivity. High speed data now accounts for 31% of the Group’s corporate revenue, with the main constraint on growth BT Openreach’s struggles with provisioning.

The high growth and business demand for data services has offset a decline in voice revenues (-16.2%), in line with market trends. Over the year, TalkTalk Business acquired and integrated tIPicall, a leader in Next Generation Voice Services, launching a market-leading SIP proposal in the partner channel. Customer demand and reception following this acquisition has been very positive, and TalkTalk Business expects the rate of decline in total voice to moderate as this side of the business grows.

Carrier revenues also grew strongly in H1 (+34.1%) but as expected, were flat year-on-year in H2, with full year growth at 13.3%, and they are expected to remain broadly stable in FY17. 

Charles Bligh, Managing Director at TalkTalk Business, comments: “TalkTalk Business has a proud history of disruptive innovation to ensure that we offer our SME, corporate, enterprise and channel customers the best and most reliable service possible. We expect to see this growth continue over the next year as we focus on strengthening our next generation network and delivering new services such as MyNet, SIP and unified communications to both our partners and direct customers.”                                                                            

A summary of results across TalkTalk Telecom Group PLC can be found below. For a detailed Group financial and business review, as well as insights into specific product areas such as Broadband, Mobile, Fibre, TV, Network, please visit the TalkTalk Group website for the full version of the press release here.

TalkTalk Telecom Group PLC:  Preliminary Results for the 12 months to 31 March 2016

  • Strong recovery in Q4: net adds flat, +148k RGUs, lowest ever churn at 1.3%
  • FY EBITDA* of £260m in line with guidance; material step up in H2 margin to 18.4%
  • Reiterating FY17 guidance*: modest revenue growth and £320m-£360m Headline EBITDA
  • Net debt /EBITDA* reduced to 2.6x from 2.8x at H1; expected to fall towards target of 2x
  • Dividend per share up 15% to 15.9p (FY15: 13.8p), in line with commitment
  • FY17 dividend expected to be at least in line with FY16 and covered by free cashflow

*Headline financials 

FY16 Financial Highlights

  • Headline total revenue +2.4% to £1,838m (FY15: £1,795m)
  • On-net revenue +5.0% to £1,399m (FY15: £1,333m); ARPU +5.8%
  • Corporate revenue +2.4% to £384m (FY15: £375m); Data revenues +23.7%
  • Headline EBITDA +6.1% to £260m (FY15: £245m); Headline EPS up 2.4% to 8.4p (FY15: 8.2p)
  • Statutory Profit Before Tax £14m (FY15: £32m) - after exceptional costs of £83m (FY15: £46m)
  • Statutory EPS 0.2p (FY15: 7.8p) 

Q4 Operating Highlights

  • On-net net adds flat; RGU growth +148k; RGU/customer +8.6%
  • Mobile +90k (14.9% share of new SIM market); fibre +72k; TV -14k
  • Lowest ever quarterly churn at 1.3%
  • On-Net revenue flat year on year; ARPU +3.9%
  • Corporate revenue -2.9% year on year against strong comparative; Data revenues +40.0%