TalkTalk swings to a loss on investment drive
TELECOMS group TalkTalk has dived to a half-year loss and trimmed its earnings outlook as it took a hit from efforts to secure more customers by investing in the business.
The FTSE 250 firm booked a loss of £75 million for the six months to the end of September, down from a £30 million profit over the same period last year.
Revenues also dipped 5 per cent to £828 million for the half year, with headline earnings dropping 34 per cent to £95 million in response to the firm's investment drive.
It also flagged that annual earnings would come in at the lower end of its targets as it pushes through further investment to capture a greater share of the market in the second half of the year.
Tristia Harrison, chief executive of TalkTalk, said: "When we simplified and reset the business in May we said our priorities were growth, cash and EBITDA, in that order.
"We have now delivered a third consecutive quarter of growth in our broadband base, with both retail and wholesale bases growing; returned to on-net revenue growth; and delivered lower churn than a year ago.
"We expect to step up our planned investment in growth in the second half, as we take advantage of the strong demand we are seeing for our fixed low price plans; fibre take up and affordable propositions in both our residential and B2B markets."
TalkTalk pulled in 46,000 more customers during the half-year period after seeing a drop by 29,000 over the period in 2016.
The group secured double digit customer growth across its retail and wholesale businesses, with customer demand for its fixed low-price plans (FLPP) driving the strongest share of the switching market in three years.
Stronger demand for FLPP's also curbed the percentage rate of customers leaving the firm - or churn - to 1.3 per cent for the half year, down from 1.5 per cent.
Shares in TalkTalk plunged more than 14 per cent shortly after the London Stock Exchange opened.