Shares in Talk Talk, the UK internet and telecoms network, fell heavily on Wednesday after the company reported a first-half loss for its financial year and said its full-year earnings would be at the lower end of forecasts.
While the company said it was experiencing strong demand for its TV, internet and phone bundles, larger than expected costs for updating its mobile phone business led to first-half losses.
Meanwhile, continued cost runs to help drive growth going forward, meant the company would only achieve profits at the lower end of its target range (see below).
Comparable figures for the same period a year ago are in brackets:
- Headline core earnings at £95m (£144m)
- Statutory operating loss of £42m (£44m profit)
- Statutory revenue of £856m (£902m)
- Statutory loss before tax £75m (£30m profit)
- Net adds +46,000 with double-digit growth in both retail and wholesale bases (-29,000)
- Investment in growth to drive full-year headline core earnings towards lower end of £270m-£300m guidance
- H1 dividend of 2.5p (5.29p)
Tristia Harrison, chief executive (above), said: "When we simplified and reset the business in May we said our priorities were growth, cash and earnings, in that order. The first half performance shows we are delivering on that plan.
"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.
"Our clear value proposition is resonating strongly against an uncertain economic environment and underpins our plan to simplify and focus all our investment in delivering affordable, reliable fixed connectivity to both homes and businesses."
The loss, the outlook and the dividend all proved disappointing for investors in Talk Talk and they sold the stock down by 10.34% to 169.9p after an hour of trade on the London Stock Exchange.
Picture courtesy of Talk Talk corporate website