TalkTalk sees shares surge as profits rise

 
Steve Dinneen
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TALKTALK continued a downward trend in terms of lost broadband customers, shedding 25,000 in the fourth-quarter.

The company has struggled to integrate an unwieldy customer base after buying Tiscali and AOL UK, generating high levels of complaints amid breakdowns in its billing system.

However, its shares surged 6.5 per cent as synergies from the acquisitions and a six per cent increase in average broadband customer spend helped lift profits 25 per cent to £276m on 4.7 per cent higher revenue of £1.8bn.

Chief executive Dido Harding said it was a strong all-round performance against a backdrop of major change. She said: “We are confident that we are now making major progress in improving the experience for our customers, which will lead to lower churn.

“All the major elements of our programme to integrate the former Tiscali business were completed by the year-end, and we achieved our target of £55m of synergies. During this process a number of customers suffered disruption. We have worked hard to mitigate the impact of this.”

TalkTalk, spun out of retailer Carphone Warehouse in March 2010, forecast broadly flat revenue for the current year, and said its core earnings margin would rise to up to 18 per cent from 15.6 per cent.