TalkTalk cites unbundling strategy as factor in positive H1 results

16 Nov 2010

UK alternative broadband provider TalkTalk has released its financial results for the six months ended 30 September 2010, reporting a 12.4% year-on-year increase in revenues. For the six-month period TalkTalk generated a turnover of GBP887 million (USD1.43 billion), up from GBP789 million in the same period a year earlier, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 17.5% against H109, to GBP121 million. Profit after tax for the first half of the operator’s 2010/11 fiscal year was GBP50 million, up 6.3% y-o-y against GBP47 million a year earlier. On the back of the results TalkTalk confirmed its full-year guidance that revenues will rise by between 6% and 8% for the twelve-month period. Dido Harding, TalkTalk’s CEO, said of the financial performance: ‘We have delivered another good half year, we are reiterating our financial guidance for the full year and we are setting targets for sustained revenue growth and a materially increased EBITDA margin over the medium term,’ adding, ‘Like all companies that have grown as quickly as TalkTalk, there are considerable opportunities to improve the efficiency and effectiveness of the business. We see real opportunities to deliver an additional GBP40-GBP50 million of operating efficiencies, and over the medium term to drive our EBITDA margin to 20%.’

The operator also pointed to its strategy of unbundling as a key factor in its performance, noting that 81% of its broadband subscribers at end-September 2010 were accessing services over TalkTalk’s own network. Further, it revealed that it plans to add some 700 new local loop unbundled (LLU) exchanges ‘over the medium term’, also adding that it eventually aims to have 93% of its broadband customer base on its own network. As at end-September 2010 TalkTalk had 4.25 million high speed internet customers.

United Kingdom, TalkTalk (incl. FibreNation)