More customers dial up TalkTalk but firm warns on earnings
TalkTalk has reported its eighth consecutive quarter of rising customer numbers, but the telecoms group warned it will take a hit of up to £15 million due to an accounting change and increased investment.
The company booked a 2.9% rise in headline revenue to £386 million in the third quarter as its customer base grew by 44,000, with double-digit growth in both consumer and business to business.
The firm has seen 148,000 net broadband customers join it in the year to date, putting it on track to beat its full-year target of 150,000.
Fibre customer additions on a net basis – those joining minus those leaving – rose to a record 146,000, up from 125,000 in the previous three months.
However, a change its accounting standard and investment in growth will cost it up to £15 million, meaning earnings will miss City expectations of £259 million.
Headline earnings are now expected to come in between £245 million and £250 million, compared with £197 million last year.
In addition, TalkTalk’s average revenue per user dipped in the quarter to £24.70 versus £25.18 last year.
Boss Tristia Harrison said: “We continue to see strong trading momentum in the business, with customer growth ahead of expectations.
“Quarter three was the eighth consecutive quarter of rising customer numbers and we saw record demand for fibre.”
TalkTalk’s rate of churn – customers quitting the group – came in at 1.16%, up slightly from the 1.1% seen in the second quarter.
The group is trying to move on from the major cyber attack in 2015, which saw the personal data of nearly 160,000 people accessed by hackers.
TalkTalk said its full-year results will reflect a bigger customer base and “meaningful cost reduction” exercises.
Last year TalkTalk announced that it is shifting its headquarters from London to Salford in a move affecting hundreds of staff.
The firm said it would relocate “several hundred” employees from its existing HQ to the new office in Manchester next year, while also creating new roles, including graduate and apprentice positions.
It comes after TalkTalk opened a large, state-of-the-art office in Salford in 2017 to house its technology and business teams, which had previously been based in Warrington and Irlam.