TalkTalk boss Tristia Harrison: Swinging into a loss does not mean we're changing our plans

 
Oliver Gill
Follow Oliver
BRITAIN-CRIME-HACKING-COMPUTERS-TALK TALK
TalkTalk said it was reaping the rewards of a corporate shake-up in May (Source: Getty)

TalkTalk investors today scrambled for cover as the telecoms provider revealed profits had dried up.

Boss Tristia Harrison poured cold water on concerns the FTSE 250 firm may have to cancel its dividend as half-year figures swung into the red.

Shares dived by almost a fifth as markets opened, before regaining ground and ending the day six per cent lower.

Operating losses for the half-year to September were £42m. TalkTalk generated £44m of profit in the same period last year.

Harrison told City A.M. that while TalkTalk took the painful decision to cut its dividend earlier in the year, yesterday’s loss-making activities would not mean investor payouts would be cancelled.

“We made the [dividend] decision that we made in May and it will remain as it currently is today. We super-focussed on growing the business,” she said.

Jefferies equity analyst Jerry Dellis said during a question and answer session management “were reluctant to give any colour at all” on the impact of sticking by its current dividend policy on its banking arrangements. TalkTalk has two partially drawn down revolving credit facilities totalling £740m.

“Absolutely not,” was the response from Harrison to question on whether TalkTalk could be in danger of breaching covenants.

Read more: TalkTalk's Dunstone: I'm personally feeling the pain of dividend cut

Growth

TalkTalk’s broadband base grew for the third successive quarter and it managed to hold onto customers better than it had been doing a year ago. The firm added 26,000 net new customers during the second quarter, with customers responding positively to fixed low-price plans.

Harrison added: “If you look at where we were 12 months ago, it is a proper turnaround. The business was in decline 12 months ago. It is much easier to drive profit growth with declining profit than the other way round, and that’s sort of what we are seeing today.”

The firm also reached out to one of its friends for help, drafting in the ex-finance director of former parent company Carphone Warehouse Nigel Langstaff as a non-exec director.

The firm generated losses per share of 0.5p, down from earnings of 5p in 2016. Interim dividends fell from 5.29p to 2.5p.

Read more: TalkTalk shares plummet as divi is slashed

Related articles