Talktalk Telecom Group Plc (LON:TALK) today updated investors with half-yearly results for the six months ended September 30 and with the latest developments of last month’s cyber-attack.
The company followed up on last week’s announcement that the hack was less serious than initially feared with an estimate that the one-off financial impact of the ordeal could total up to £35 million.
“That’s covering the response to the incident, the incremental calls into our call centres, obviously the additional IT and technology costs, and then the fact that over the last three weeks until yesterday our online sales sites have been down, so there will be lost revenue as a result,” chief executive Dido Harding said for the BBC.
On Friday, the firm revealed that the number of customers whose data was accessed was about 157,000, a figure much lower than the four million initially feared. Furthermore, the company said only about 16,000 bank account numbers were accessed, while only 28,000 credit- and debit-card numbers were accessed, and these were ‘orphaned’, meaning that they offer no compromising information.
The company cautioned today that it is too early to assess the wider impact of the cyber-attack, although “early data on churn and retention activity in the days since the attack is encouraging”. TalkTalk announced that it is offering all subscribers the option to upgrade services for free, in recognition of the “unavoidable uncertainty” endured by its customers.
Despite the incident, TalkTalk said it is on track to deliver FY results in line with market expectations pre-hack and it “remains well positioned to deliver strong and sustainable long term growth”.
The firm reported half-yearly revenue of £912 million, up 4.7 percent on an annual basis, though headline pre-tax earnings were down 18 percent to £90 million. Operating cash flow dropped 14 percent to £38 million.
Most notably, the company raised its interim dividend by 15 percent to 5.29p and said it expects the final dividend to grow by 15 percent as well, as earnings grow.
“We have delivered H1 results in line with our plan and revenue growth accelerated strongly through the second quarter,” chief executive Dido Harding said. “We have a robust plan to deliver a significant step-up in profits in H2, underpinned by the benefits of our transformation programme coming through strongly.”
Investors welcomed TalkTalk’s updates, with the firm’s share price surging 11.92 percent to 243.20p as of 12:50 GMT today. The company’s stock is still some 17 percent in the red since the hack on October 21.
Richard Holway, chairman of TechMarketView, argued following the attack that TalkTalk might need to rebrand in order to limit the reputational damage caused by the attack. He also noted the telecom could soon become a takeover target from rivals.
TalkTalk has been heavily criticised for failing to prevent what was apparently an amateur-level hack. Two UK boys, aged 15 and 16 years, respectively, were briefly held over the hack.
Meanwhile, MPs have said that an inquiry into the cyber-attack would be launched to examine why customer bank details were at risk and how hackers were able to access them.
As of 13:27 GMT, Wednesday, 11 November, Talktalk Telecom Group PLC share price is 217.30p.
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