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November 16, 2016

TalkTalk profits jump one year after mega data breach

The company is still losing customers.

By Ellie Burns

Telecoms group TalkTalk is recovering from last year’s cyber attack as the company posted a surge in half-year profits.

The company said its relentless focus on retaining existing customers helped it increase pre-tax profits to £46m for the six months to 30 September, up from £14m a year earlier.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 44% to £130m, from £90m.

However, TalkTalk said it is still experiencing the impact of the hack after losing 98,000 retail broadband customers in the first half. It was largely offset by 69,000 new wholesale customers signing up.

Fine falls short of maximum that can be issued.

Fine falls short of maximum that can be issued.

TalkTalk chief executive Dido Harding said: “One year on from the cyber attack, we have maintained a relentless focus on looking after our existing customers and keeping up the pace across a wide range of operational improvements to make TalkTalk simpler and better for customers.”

Harding added that the group had made a significant improvement in churn and customer satisfaction.

Total revenues in the first half however fell 1.1% to £902m, but profits were helped as it made £17m in savings from a company overhaul.

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TalkTalk recently launched new fixed low- price plans, which the company says will offer customers simple, affordable and fair prices in an increasingly confusing market place.

Harding said: “By allowing our existing customers to switch to these new plans, we are delivering a value for money proposition to our customer base that is genuinely unique in the market, and are laying the foundations for a fundamental transformation of the TalkTalk brand.”

However, the company admitted that the move would hit profits, restating expectations for full-year EBITDA at the lower end of its £320m to £360m guidance range.

The company expects to return to retail subscriber growth and revenue growth in its next financial year.

Revenues for TalkTalk Business accounted for 30% of the group and have increased by 10.6% year on year.

Business demand for data services continues to soar as TalkTalk Business reported more than 4,200 net Ethernet lines connected.

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