TalkTalk increases 2014 interim dividend by 15.9%

DividendMax Ltd.

TalkTalk increases 2014 interim dividend by 15.9%

H1 EBITDA £76m in line with expectations, reflecting an additional £86m investment in growth

Strong and accelerating TV growth (+167,000 net adds in Q2); now expect y/e base of nearly 1m

Continuing growth in broadband net adds (+5,000) and ARPU drive Q2 revenue growth of 1.9%

Raising FY revenue growth guidance to at least 3% from 2%

Raising medium term revenue growth target to 4% CAGR (FY14-FY17) from 2%

Targeting 25% EBITDA margin by FY17

H1 Financial Highlights

Total revenue up 1.8% to £843m (H1 FY13: £828m)

On-net revenue up 6.8% to £612m (H1 FY13: £573m); Corporate revenue up 1.3%

Headline EBITDA £76m (H1 FY13: £147m) after £86m investment in scaling new products

Headline EPS 0.8p (H1 FY13: 7.8p);

Interim Dividend 4.00p (H1 FY13: 3.45p)

Q2 Operating Highlights

Q2 on-net ARPU up 2.8% to £26.08 (Q2 FY13: £25.37)

56,000 fully unbundled net adds; total net adds 5,000

167,000 TV customers added, base now 557,000; Essentials TV launched

34,000 Mobile customers added; 47,000 Fibre customers added

On-net churn 1.7% (Q1: 1.4%)

Continued improvement in call volumes and Ofcom complaints

Corporate revenue +2.5% including 26% growth in Data revenues


Dido Harding, Chief Executive of TalkTalk commented:

"We are delighted with the progress we have made in the first half. We have the fastest growing TV business in the UK and we now expect to have nearly 1m TV customers by the end of FY14. 

Other new products and TalkTalk Business have also performed well and we delivered our third successive quarter of accelerating revenue growth, allowing us to raise our guidance for full year revenue growth from 2% to at least 3%. We are increasingly confident about the opportunity that we have to deliver sustainable growth by bringing affordable connectivity and innovative new products to Britain's consumers and businesses. As a result we are also raising our guidance for medium term revenue growth, from 2% to 4%.

Our financial performance in the first half reflects the investment we are making in growth. Sustainable revenue growth, a scale TV business and our proven ability to simplify the business to improve our customers' experience will create a more profitable business, and we are now confident of our ability to deliver a 25% EBITDA margin by FY17. "

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