Shares in TalkTalk (TALK) fell by more than a tenth after the group warned that full-year cash profits (EBITDA) to March 2019 would be £10m-£15m lower than consensus forecasts.
The company blamed this downgrade on timing adjustments relating to new revenue-recognition accounting rules, along with investment in growing its customer base and its fibre mix. Now, it expects headline cash profits to come in at £245m-£250m – up from £197m a year earlier. But this estimate excludes FibreNation costs, which could range between £5m and £10m.
TalkTalk announced the launch of FibreNation to coincide with its half-year numbers last November, noting that it would now no longer be progressing on the heads of terms agreed with Infracapital last February to provide full fibre to over 3m homes and businesses.
For the third quarter ending December 2018, TalkTalk’s customer base grew by 44,000 – up from 37,000 a year earlier. And its customer churn rate remained low at 1.16 per cent, versus 1.25 per cent. But total headline revenues came in at £401m, down 3 per cent year on year.
