Wednesday, 10 May 2017

TalkTalk shares fall 12% after dividend cut

Broadband firm TalkTalk's shares plunged by 12% on opening after it cut its dividend as part of its efforts to invest in growing its customer base.
The dividend was cut for the year to March to 10.29p from 15.83p and will be lowered to 7.5p this year.

In addition, the FTSE 250 company presented a 17% leap in its headline EBITDA profit measure to £304m in the year to March.

But it said the figure would fall to between £270m and £300m in 2018 as it continued to focus on boosting growth in the business.

It reported statutory profit before tax of £70m for the past year - which saw chief executive Baroness Harding step down from the role in February to focus on public service after a challenging time for the firm.

She spent seven years in the top job at the company - leading a PR fightback for the firm amid the fallout from a massive data breach in October 2015 that cost TalkTalk more than £40m.

It was later fined £400,000 for security failings over the cyberattack, in which the personal data of 160,000 customers was accessed.

Tens of thousands of customers deserted the firm in the immediate aftermath of the hacking.

Sir Charles Dunstone, executive chairman of TalkTalk, said: "My focus for the company is growth, cash generation and profit - in that order.

"We will be smart about how we invest, focusing on our fixed network, avoiding other capital intensive distractions.

"In light of these new priorities, we have also decided to reset the dividend as we look to deliver growth and strong sustainable shareholder returns over the long term."

The company's stock, which is over 30% down over the past year, was trading 12% down in the first hour of trading on Wednesday.

SKY     News.