Alternative British broadband provider TalkTalk has reported a 3.3% increase in turnover in the six months ended 30 September 2014 on the back on stronger demand for broadband, fibre and mobile services than it had expected earlier in the year.
In the period under review TalkTalk generated a total turnover of GBP871 million (USD1.46 billion), up from the GBP843 million it reported in the first half of its 2014 financial year (ended 31 March 2014). On-net revenues, meanwhile, were up by 5.9% year-on-year at GBP648 million, with off-net turnover by comparison falling to GBP46 million, though the company said this was in line with its expectations ‘as a result of the continued decline in the voice only and off-net base, and off-net voice usage’. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 44.7% year-on-year to GBP110 million, up from GBP76 million in H1 FY14, with EBITDA margin increasing to 12.6% from 9.0%. Such a performance, the operator said, meant that it was on track to deliver its medium term target of 25% by FY17.
At the end of September 2014 TalkTalk’s total broadband subscriber base stood at 4.221 million, up from 4.076 million a year earlier, of which 4.105 million were on-net, compared with 3.928 million at end-September 2013. The number of customers taking up TalkTalk’s fibre add-on for their broadband service also rose, reaching 308,000 at the end of the reporting period, more than double the 142,000 that had done so at end-September 2013. Mobile accesses, meanwhile, totalled 348,000 at the end of September 2014, up 47.5% year-on-year, with pay-TV subscribers numbering 1.217 million, a figure representing a more than 200% increase from the 557,000 reported at end-September 2013.
On the back of the results, and having re-affirmed its previous guidance for revenues, overheads and pre-subscriber acquisition cost EBITDA for FY15, Dido Harding said of the telco’s performance: ‘We have made strong financial and operational progress in the first-half of the year with accelerating revenue growth, profits up 45% and operating cash flow up 120% … We expect to deliver revenue growth of at least 4% and strong growth in EBITDA for the full year. In the second quarter we delivered our strongest organic broadband, mobile and fibre net additions in four years as well as adding more TV customers than the rest of the market put together. We expect this growth to accelerate in the second half which means we will invest more in customer acquisition costs than we anticipated at the beginning of the year. This investment will provide us with a larger customer base to leverage over the medium term, further reinforcing our confidence in achieving our FY17 financial targets.’