Should TalkTalk shareholders brace for a cut to dividends?

Mark Sands
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TalkTalk is to announce preliminary full year results on 10 May. (Source: Getty)

Telecoms business TalkTalk could be set to reveal a cut to dividend payouts as the firm prepares to announce its preliminary full year results.

The figures will come as long-time chief executive Dido Harding stands down. Harding will be replaced by managing director Tristia Harrison, while founder Sir Charles Dunstone will become executive chairman in May.

And according to the Sunday Times, analysts are warning that Dunstone may need to slash dividends in order to cut TalkTalk prices and build its customer base.

Last year, the telecoms firm handed shareholders £140m, with £40m going to 31 per cent shareholder Dunstone.

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The firm has been struggling with poor customer service ratings, but a dividend cut could still be prevented, with TalkTalk potentially in line for a windfall from its share of compensation from BT over the use of Openreach infrastructure.

Harding has been an outspoken critic of BT, which she has accused providing poor service and overcharging wholesale customers.

According to Yahoo Finance, analyst consensus suggests TalkTalk could report revenues of £1.8bn next week, down almost two per cent.

TalkTalk has been contacted for comment.

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