Half-year loss takes a toll on TalkTalk stock

Shares in TalkTalk slumped after the telecoms group dived to a half-year loss and trimmed its earnings outlook as it took a hit from efforts to secure more customers.

The FTSE 250 firm was down more than 10% in early morning trading on the London Stock Exchange as it booked a loss of £75 million for the six months to the end of September, down from a £30m profit last year.

Revenues dipped 5% to £828m for the half-year, with headline earnings dropping 34% to £95m in response to the firm’s investment drive.

It also flagged that annual earnings would come in at the lower end of its target of £270m to £300m, as it pushes through further investment to capture a greater share of the market.

The group cut its dividend to 2.5p for the first half of the year, down from 5.29p in 2016.

TalkTalk CEO Tristia Harrison said: “When we simplified and reset the business in May we said our priorities were growth, cash and Ebitda (earnings before interest, taxes, depreciation, and amortisation), in that order.

“We have now delivered a third consecutive quarter of growth in our broadband base, with both retail and wholesale bases growing; returned to on-net revenue growth; and delivered lower churn than a year ago.

“We expect to step up our planned investment in growth in the second half as we take advantage of the strong demand we are seeing for our fixed lowprice plans, fibre take-up and affordable propositions in both our residential and B2B markets.”

TalkTalk pulled in 46,000 more customers in the half-year after seeing a 29,000 drop over the period in 2016.

The group secured double-digit customer growth across its retail and wholesale businesses, with customer demand for its fixed low-price plans driving the strongest share of the switching market in three years.

Shares closed down 5.96% at 178.20p.

TalkTalk’s shares plunged on the update.