In its latest trading update, TalkTalk (LSE:TALK) reported that despite revenues remaining on track, the broadband base remained 9,000 lower in the Q2.
Since the hack on the company’s data base in October 2015 that released the personal data of 160,000 people and sent pre-tax profits plummeting over 50% to £14m, TalkTalk have been working on reforms which featured a continuous cut to costs.
Revenues for the Telecommunication firm had slipped 0.4% alongside on-net revenues that declined 2% in the three months ending 30 June. There was however strong growth in corporate revenue from customers, which grew by 7.5%.
On-Net churn, which is the measure of customers who discontinue their subscription, stood at 1.36% compared with 1.5% seen the same time last year. In the aftermath of the hack, 100,000+ scrapped their subscriptions in the Q3 of 2015.
As the customer base on broadband fell 9,000 lower in the Q2, the TV customer base also took a hit as numbers fell by 23,000. There were signs of improvement however, as mobile customer volumes year-on-year increased by 48,000 as well as a 36,000 rise in fibre customers.
The company’s reforms are aimed at improving the services for existing customers as the group stated that it remains on track to deliver £35-40m worth of savings by the end of the fiscal year. Improvements are being made to fault diagnostics and a new simpler billing process to improve customer service.
TalkTalk reaffirmed shareholders that it expects revenue for the full year 2017 to ‘grow modestly’ with growth expected to be seen in its’ broadband base and business amounting to £320-360m.
In the immediate reaction to its’ update, the FTSE 250 company climbed 5% in the first hour growing up to 232.70p per share before declining later on to 225p.
A 2:09pm BST TalkTalk Telecom Group PLC traded at 219.30 -3.40 (-1.53%)
20/07/16
