TalkTalk warns on annual earnings amid higher investment spend

Writer, Stock Market Wire
Friday, February 1, 2019 - 07:15

Broadband supplier TalkTalk Telecom Group warned that its annual earnings would fall short of market expectations due to investment spending and accounting changes.

Ebitda for the year through March was now expected at between £245m and £250m, marking an increase from £197m.

However, the guidance was below the current consensus analysts' forecast of £259m.

For the 2020 financial year, TalkTalk said it was confident of meeting market expectations for a rise in Ebitda to £271m.

In the third quarter, the company said its total headline revenue rose 2.9% to £386m, while headline on-net revenue rose 4.3% to £316m.

Year-to-date broadband customer adds amounted to 148k, compared to previous net adds guidance of in excess of 150k for the full year.

The customer churn rate in the third quarter was 1.16%, down from 1.25% on-year.

'We continue to see strong trading momentum in the business, with customer growth ahead of expectations,' chief executive Tristia Harrison said.

'The third quarter was the eighth consecutive quarter of rising customer numbers and we saw record demand for fibre.'

'The change to earnings guidance is due to IFRS 15 timing adjustments and investment in growth.'

'Year-on-year, we have increased revenue by growing the base and stabilising average revenue per user, 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 the 2020 financial year.'

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