Talk Talk shares slipped just under two per cent this morning, after the British telecoms firm reported a slip in revenue in the three months to 30 June, as Brits switched traditional phone calls for video chats during lockdown.
The internet firm reported an eight per cent slump in headline revenue to £358m, down from £387m in the same period last year.
Shares slipped 1.72 per cent to 78.14 per cent at 9.40am ahead of its annual general meeting today.
Talk Talk pointed towards trading restrictions and the cancellation of live sports during the pandemic for the drop, adding that ongoing industry-wide declines in voice call usage was exacerbated by lockdown, as Brits turned to Zoom and other video-streaming platforms to stay in touch.
The group said it expects a coronavirus impact of around £15m for the year, based on current bad debt trends in both
its consumer and business to business markets.
However, Talk Talk said it managed to offset revenue decline through incremental savings costs, with key cost areas significantly lower year-on-year.
The company said average revenue per user [Arpu] has improved over the last two months, with the company expecting a slight return to pre-Covid levels through the remainder of the year, driven by growth of its Fibre and Ethernet products.
Talk Talk added 67,000 new customers over the period, with that figure set to hike over the next few months as the company lures more users to its fast-speed internet.
Tristia Harrison, chief executive of Talk Talk, said: “As the UK’s internet usage continues to soar, our role as the UK’s only scale affordable provider of Fibre broadband has become even more important.
“Given this, we see a positive outlook… and are confident in our full year plan to deliver stable to growing headline [earnings before taxes, depreciation, and amortization], with strong cash conversion.
“As with many businesses, we have seen a short-term Covid-19 impact primarily due to lockdown trading restrictions and the cancellation of live sports. Encouragingly customer payment trends are in line with the pre-Covid-19 period and we continue to see an ever-increasing demand for our higher speed Fibre and Ethernet products.”
Harrison added that the group has introduced a home worker package and is in talks with employers about subsidy deals, as internet companies seek to jump on the shake-up to working routines.
Harrison said: “We have managed well with the majority of our people at home. I cannot see a situation where it returns to normal.”
She added: “Come autumn when kids are back at school people may crave some office contact, but I think that will be to pop in for a meeting and mostly avoid the cost of the commute. We see that as an opportunity.”