News
Operator still has its work cut out following the cyber attack last October.
TalkTalk CEO Dido Harding hailed a strong recovery in business in the fourth quarter of the 2016 fiscal year following the cyber attack in October, but analysts were less confident about the operator’s ability to achieve guidance figures for the coming year.
Furthermore, the company had to withstand a sharp decline in pre-tax profits to £14 million in the fiscal year to end-March 2016, down from £32 million a year previously. The company noted that this reflected the increase in exceptional costs.
Harding’s confidence was inspired by the fact that net customer additions increased by 148,000 in the final quarter of FY 2016.
“We recorded our lowest ever churn and stabilised the broadband base, testimony to the speed with which customer sentiment towards TalkTalk has recovered, the success of our greater focus on existing customers, and the growing benefits of our simplification programme,” she said.
However, overall revenue in the fourth quarter was 1.7% lower at £467 million. Analysts from Jefferies International said revenue growth had been expected to slow in Q4, “but still comes in weaker than expected.”
Revenue in FY 2016 increased by 2.4% to £1.84 billion, while EBITDA rose by 6.1% to £260 million.
Harding stressed that the company now sees strong opportunities for growth across all its products.
“As a result we are reiterating our financial guidance for FY17 of £320m-£360m EBITDA,” she said.
However, the guidance figures appear to be an area of particular concern for the analysts.
“Guidance does not inspire confidence, in our view,” Jefferies commented. The analysts noted that the company is leaving itself with a lot to do in the second half of the year with only around one third of full-year EBITDA expected to be achieved in the first half of the year amid modest revenue growth.
