TalkTalk posts surge in half-year profits as efforts after cyber attack pay off
Telecoms group TalkTalk said recovery efforts after last year's cyber attack were paying off as it posted a surge in half-year profits.
The firm thanked a "relentless focus" on retaining existing customers for helping pre-tax profits jump to £46 million for the six months to September 30, up from £14 million a year earlier, while underlying earnings leapt 44% higher to £130 million.
It also expects "materially" higher profits for the full year.
But TalkTalk said it was still feeling the impact of the hack after losing 98,000 retail broadband customers in the first half, although this was largely offset by 69,000 new wholesale customers signing up.
Dido Harding, chief executive of TalkTalk, said: "One year on from the cyber attack, we have maintained a relentless focus on looking after our existing customers and keeping up the pace across a wide range of operational improvements to make TalkTalk simpler and better for customers."
She added the group had made a "significant" improvement on churn - measuring customers quitting the group - and customer satisfaction.
The online attack last October resulted in the personal data of nearly 160,000 people being accessed and was branded a ''car crash'' earlier this year by then information commissioner Christopher Graham, who said it should send a warning shot to the industry.
TalkTalk offered customers a free upgrade to help soothe concerns after the data breach, and created a new bundle of online and telephone security features to boost customer protection.
It has recently launched new fixed low- price plans, which the group said will help drive a return to growth in retail customers and revenues again in the next financial year.
But the investment in its new low-price fixed plans are set to see underlying earnings for the full-year come in towards the bottom of its previous forecast - for between £320 million to £360 million.
Shares fell 5% as this, and details of its broadband customer losses, overshadowed the sharply higher first half result.
The group's so-called rate of customer churn was 1.4% in the half year, down from 1.48% a year earlier.
But on a net basis, it lost 29,000 broadband customers, while it also shed 56,000 TV subscribers in the first half.
Total revenues in the first half fell 1.1% to £902 million, but profits were helped as it made £17 million in savings from a company overhaul.
The group said it had seen a "strong start" to its new price plans, with 10 times as many customers re-contracting with the group than on average in a month.
Ms Harding said: " We are delighted with the initial response to our fixed low-price plans, which offer customers simple, affordable and fair prices in an increasingly-confusing market place.
"By allowing our existing customers to switch to these new plans, we are delivering a value-for-money proposition to our customer base that is genuinely unique in the market, and are laying the foundations for a fundamental transformation of the TalkTalk brand."