TalkTalk on track as it expands fibre proposition

21st Nov 2018 08:09

(Sharecast News) - TalkTalk Telecom Group updated the market on its trading for the six months ended 30 September on Wednesday, reporting continued growth in its broadband base and headline revenue, while reiterating its full-year expectations.The FTSE 250 telecoms provider said total headline revenue, ex-carrier and off-net, was up 3.9% to £771m, with second-quarter headline revenue 3.7% higher.Its statutory revenue declined 0.6% to £822m, which TalkTalk said was primarily due to it exiting its mobile virtual network operator proposition.Headline EBITDA was £101m, up from £75m in the first half of the 2018 financial year.Statutory operating profit stood at £19m, swinging from a £62m loss a year earlier, while its statutory loss before tax narrowed to £4m from £95m year-on-year.Headline net debt stood at £760m, excluding finance leases of £40m, compared to £837m excluding finance leases of £18m 12 months ago.TalkTalk declared a first-half dividend in line with its existing policy at 1.00p, down from the 2.50p paid at the interim last year.On the operational front, the company's customer base grew by 104,000, improving from growth of 46,000 at the same time last year, taking its closing base to 4.24 million.Second-quarter net adds totalled 24,000, down from 26,000 year-on-year, with growth seen in both TalkTalk's consumer and business-to-business propositions.The firm said it had an ongoing low level of churn of 1.2%, down from 1.3%, with the second quarter the lowest ever at 1.1%.It was accelerating its uptake of fibre, with 192,000 net adds in the half and a record 125,000 in the second quarter.The board pointed to improving average revenue per user trends, with "encouraging" quarter-on-quarter consumer growth there, while it also saw continued strong growth in business-to-business including data connections of 4,300, up from 3,800 a year ago.TalkTalk also noted the move of its headquarters to Salford; creating one main campus and a more efficient operating model.The firm was set to accelerate its full fibre plans to reach more than 100,000 homes within the next 18 months, with the launch of a new company dubbed 'FibreNation' to deliver that ambition on Wednesday.Looking ahead, TalkTalk said its headline EBITDA was expected to remain in line with expectations, along with headline revenue growth, and a stabilising group average revenue per user and ongoing consumer ARPU growth.It was expecting more than 150,000 broadband net adds for the full year, though it did note that in non-headline items, both profits and cash would be lower year-on-year."This has been a strong first half for TalkTalk, with continued broadband base growth and further progress as we become a simpler, more efficient business," said chief executive officer Tristia Harrison."Our 'Fairer Broadband' commitment, focus on reliability and unique fixed low price plans continue to improve customer satisfaction and loyalty, resulting in our lowest ever churn in the second quarter."We remain on track to deliver our plan for the year, with growing consumer ARPU and increasing revenue leading to strong EBITDA growth."Harrison said that, with core business performance on track, the company was also announcing two additional steps to position TalkTalk for the future."We are accelerating our full fibre strategy, launching a new company, FibreNation, which will expand our gigabit broadband footprint to over 100,000 homes in the next 12-18 months."As we continue to radically simplify TalkTalk, we will also create a single main campus for the business in Salford."Having a single main home will reduce operational complexity and allow us to become a more efficient, focussed business, in turn supporting our long-term growth."