TalkTalk swings to full-year loss on overhaul costs
The telecoms firm posted pre-tax losses of £73 million for the year to March 31, but said it had seen record growth in new customers.
Telecoms group TalkTalk has dived into the red with full-year losses of £73 million after counting the cost of its overhaul.
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The firm said £119 million of costs from its turnaround plan and restructure left it nursing the loss, which compared with profits of £70 million the previous year.
On an underlying basis, earnings tumbled to £233 million in the year to March 31, down from £361 million the previous year.
Revenues fell 4% to £1.7 billion.
But TalkTalk boss Tristia Harrison said the group was “making good progress” on turnaround plans and stuck by aims to return to underlying earnings and revenue growth over the new financial year.
Alongside full-year results, TalkTalk also announced a proposed deal to sell its direct business-to-business (B2B) operations to Daisy Group for £175 million.
It has agreed to to transfer all of TalkTalk’s direct B2B customers – around 80,000 businesses.
The group’s annual figures showed TalkTalk notched up its highest ever quarterly net growth in new customers in the final three months of the year to March – up 109,000.
Over the full year, it halted customer losses after several years of declines, adding 192,000 against a 49,000 fall the previous year, taking its closing customer base to 4.1 million.
Its churn – the rate of customers moving to another provider – dropped to 1.2%, down from 1.5% the previous year, and fell further to 1.16% in the fourth quarter.
Ms Harrison said: “When we reset TalkTalk a year ago, we said we would focus on delivering sustained customer growth whilst radically simplifying the business.
“One year into the strategy, we are making good progress on both.”
She added: “As expected, our decision to invest in growth has come with short-term implications for EBITDA (underlying earnings), but positions us well for full-year 2019.”
TalkTalk is targeting earnings growth of 15% in 2018-19 and 150,000 net new customers.
The group has been recovering from a major cyber attack in 2015, which saw the personal data of nearly 160,000 people accessed by hackers.
The debacle was branded a “car crash” by the then information commissioner, Christopher Graham, who said it should send a warning shot to the industry.
The attack led to tens of thousands of customers deserting the firm and cost it £60 million.