Investors sent shares in TalkTalk (TALK) up 12 per cent after the budget telecoms group pegged the financial fallout from the recent cyber attack - which put the personal information of about 157,000 customers at risk - at £30m-£35m. But other costs are still climbing as a result of network investments, product development and continued restructuring. That sent adjusted cash profits down 18 per cent to £90m for the six months to 30 September.
TalkTalk's revenue growth accelerated during the period - which closed before the cyber attack - as customers snapped up its cheap bundles of TV, broadband and mobile services. The launch of a £12 a month promotional SIM card precipitated a 28 per cent increase in mobile customers, while a new self-install option fuelled a 21 per cent rise in the number of fibre customers. Together with more TV customers, that meant the total number of 'triple-play' users leapt to 1.4m or 39 per cent of the group's customers, up from about a third a year ago. Accordingly, average revenue per core user climbed 6.1 per cent to £28.08 a month.
Analysts at Credit Suisse are reviewing their model in light of the cyber attack, which they think could lower consensus cash profit forecasts by 7 per cent this financial year and up to 10 per cent beyond that. They previously expected adjusted EPS of 19.3p for the year to March 2016 (from 14.1p in FY2015).
| TALKTALK (TALK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240.6p | MARKET VALUE: | £2.3bn | |
| TOUCH: | 240.0-240.9p | 12-MONTH HIGH: | 415p | LOW: 210p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 44 | |
| NET ASSET VALUE: | 29p* | NET DEBT: | 230% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 871 | 20.0 | 1.6 | 4.60 |
| 2015 | 912 | -8.0 | -0.7 | 5.29 |
| % change | +5 | - | - | +15 |
Ex-div: 19 Nov Payment: 11 Dec *Includes intangible assets of £700m, or 73p a share | ||||
