TalkTalk takes hit from cyber attack but has 'bounced back strongly'
Telecoms firm TalkTalk revealed full-year profits more than halved as it took a £42 million hit from last October's cyber attack, but said the business was bouncing back "strongly".
The group saw pre-tax profits tumble to £14 million in the 12 months to the end of March, down from £32 million the previous year.
It lost 101,000 subscribers in its third quarter and took on fewer new customers after temporarily shutting down its online sales channels in the wake of the attack, which resulted in the personal data of nearly 160,000 people being accessed.
But boss Dido Harding said it had now halted the customer exodus, with its subscriber base held flat on a net basis - those joining less those leaving - in the final three months of its year.
She said: "The business bounced back strongly in the final quarter following the cyber attack in October.
"We recorded our lowest ever churn and stabilised the broadband base, testimony to the speed with which customer sentiment towards TalkTalk has recovered."
The group expects revenues to remain under pressure over the current first half, but return to growth by the end of the new financial year, while underling earnings are expected to grow "modestly".
TalkTalk said it had brought customer "churn" - those leaving the group - down to its lowest ever quarterly level, at 1.3%, thanks to actions launched following the cyber attack.
The group 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.
But the TalkTalk attack was branded a ''car crash'' earlier this year by Information Commissioner Christopher Graham, who said it should send a warning shot to the industry.
On an underlying basis, earnings grew 6.1% to £260 million thanks to a step-up in the final six months and the group said it expects current year earnings to rise to between £320 million and £360 million.
Its results show a surge in mobile and broadband customers, with net subscribers up 90,000 and 72,000 respectively in the fourth quarter.
But it said TV customer numbers dropped, down 14,000 in the fourth quarter and 25,000 over the year, as it focused on mobile and broadband.
It is hoping to see TV subscriber numbers recover after recently announcing a deal to offer BT Sport channels from June, while its customers can also now sign up and pay for Netflix on their TalkTalk bill.
As part of an industry-wide push to increase direct fibre optic broadband access across the UK, TalkTalk also said it completed its first trial in York at the end of March and is now looking to roll it out further nationwide.
It said it believes there is scope for it to expand this network to around 10 million British households.
The group added that its business-focused arm, TalkTalk Business, which accounts for nearly a third of revenues, increased turnover by 5% in the year.
It said TalkTalk Business was a "significant, profitable and fast-growing" part of the group and wants to double its size.