Salford’s TalkTalk adds customers but profit hit

Tristia Harrison

Salford-based broadband giant TalkTalk Telecom Group said on Friday it added 44,000 customers in its third quarter, taking its base to 4.29 million, while average revenue per user was £24.70, down from £25.18 a year ago.

In a third-quarter trading update TalkTalk also said attracting more customers and changing its accounting standard would cost it up to £15 million in its current financial year, resulting in earnings falling short of analysts’ expectations. 

TalkTalk said full-year underlying earnings would be in the range £245 million to £250 million, up from £197 million in the previous year but below an analysts’ consensus of £259 million.

TalkTalk shares fell about 5%.

TalkTalk CEO Tristia Harrison said: “We continue to see strong trading momentum in the business, with customer growth ahead of expectations.

“Q3 was the eighth consecutive quarter of rising customer numbers and we saw record demand for fibre. 

“The underlying business is on track.

“The change to earnings guidance is due to IFRS 15 timing adjustments and investment in growth.

“Year on year, we have increased revenue by growing the base and stabilising ARPU, which combined with lower costs is driving improved earnings.

“Our significant customer momentum, combined with the benefits of our reorganisation and HQ move, gives us confidence in strong earnings growth for FY20.”