# TalkTalk Telecom Group PLC Strong growth momentum; acceleration in net adds

- Link: https://www.directorstalkinterviews.com/talktalk-telecom-group-plc-strong-growth-momentum-acceleration-net-adds/412739945
- Published: 2017-11-15T07:02:18+00:00
- Author: Giles Arbor

**TalkTalk Telecom Group PLC** (LON:TALK) today announced it’s interim results for
the 6 months to 30 September 2017 (H1FY18).

**Highlights**

· Net adds +46k (H1FY17: -29k) with double-digit growth in both Retail and Wholesale
bases; opportunity to step up investment in growth to deliver further strong net
adds progress in H2

· Return to on-net revenue growth in Q2 (+1.3%)

· Continued reduction in churn to 1.3% (H2 FY17: 1.5%)

· 1.6m customers now on FLPP (31 March 2017: 1.0m) – over 50% of Retail base

· Strong growth in fibre (+161k) and TV (+19k); sustained growth in Ethernet base(
+4.3k)

· Simple and compelling new mobile proposition to be launched in Q3

· Continue to explore co-investment opportunities in FTTP; begun build of further
40,000 homes in York

· Investment in growth to drive FY Headline EBITDA(1,2) towards lower end of £270m-
£300m guidance

**H1FY18 Financial Highlights**

· Headline EBITDA(1,2) £95m, excluding MVNO loss (H1FY17: £144m excluding MVNO loss)

· Statutory operating loss £42m (H1FY17: £44m profit)

· Headline Revenue(1,2) -1.8% excluding Carrier (H1FY17: -3.4%; H2FY17: -3.1%)

· Statutory Revenue £856m (H1FY17: £902m)

· On-net revenue -1.1%; Corporate (ex-Carrier) +2.2%; Data +10.7 %, Legacy Voice-
8.2%

· Headline(1,2) operating cash flow £46m (H1FY17: £-28m)

· Statutory loss before tax £75m (H1FY17: profit £30m); statutory EPS -7.5p (H1FY17:
2.2p)

· H1 dividend 2.50p (H1FY17: 5.29p); H1 Headline net debt/EBITDA(1,3) 2.88x (H1FY17:
2.51x)

**Tristia Harrison, Chief Executive of TalkTalk Group commented:** “When we simplified
and reset the business in May we said our priorities were growth, cash and EBITDA,
in that order. The first half performance shows we are delivering on that plan. 
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. Our clear value proposition is resonating
strongly against an uncertain economic environment and underpins our plan to simplify
and focus all our investment in delivering affordable, reliable fixed connectivity
to both homes and businesses”.

“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 low price plans;
fibre take up and affordable propositions in both our residential and B2B markets.
Our revised strategy of focusing the business on fewer, clearer priorities is re-
establishing TalkTalk as the value provider of choice in the UK fixed connectivity
market.”

(1) Headline measures represent trading results before adjusting items which are
defined in note 1 to the interim condensed consolidated financial statements. The
directors believe the presentation of the Group results in this way is relevant 
to an understanding of our financial performance, as adjusting items are identified
by virtue of their size, nature or incidence. Further details regarding Headline
measures are disclosed in note 1 to the interim condensed financial statements. 
Reconciliations between Headline measures and statutory reported measures are shown
in notes 6, 9 and 10 to the interim condensed financial statements.

(2) Headline EBITDA excludes losses from MVNO proposition during the period of £
7m (H1FY17: £14m). Headline Revenue excludes revenues from MVNO proposition of £
28m (H1FY17: £33m).

(3) As calculated for the purposes of the Group’s borrowings, see note 1 to the 
interim condensed consolidated financial statements.

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