TalkTalk reports a 9.7% increase in full-year core earnings as fibre customer base expands

TalkTalk (LON: TALK) said on Thursday that its annual core earnings came in 9.7% higher to £260 million. The British broadband company attributed its success to its fibre customer base that grew considerably in the recently ended financial year. TalkTalk expressed confidence in its strong financial stature and maintained dividend at 2.5 pence a share on Thursday.

Shares of the company are a little under 5% down on Thursday. At 94.89 pence per share, TalkTalk is roughly 20% down year to date in the stock market after recovering from a low of 71.25 pence per share in March. Learn more about how to invest in the stock market.

TalkTalk refrains from providing financial guidance

CEO Tristia Harrison commented on the report on Thursday and said:

“Access to reliable, affordable connectivity has never been so important – and low prices matter now more than ever before. As the only scale, value provider, TalkTalk continues to be well-positioned to meet this demand.”

Due to the Coronavirus pandemic that has far infected a little under 300,000 people in the United Kingdom and caused more than 41,000 deaths, TalkTalk refrained from providing financial guidance for the current fiscal year.

Harrison, however, remained hawkish that the company will see stable core earnings this year despite a £15 million charge related to the ongoing pandemic. Its bad debt provision in the recently ended year stood at £3 million. Harrison also said:

“We are making sure that we plan cautiously as we get into the second part of the year as the various furlough schemes fall away.”

TalkTalk has so far not approached the British government for financial support.

TalkTalk adds 605,000 net new customers

In terms of full-year revenue, the London-headquartered company posted a 1.9% decline to £1.51 billion. TalkTalk added 605,000 net new customers in the financial year with £24.35 of on-net revenue per customer (average). Its on-net churn rate, the company added, remained unchanged at 1.2%.

In the year that ended on 31^st March, TalkTalk’s pre-tax profit came in at £146 million as compared to a £5 million loss in the previous year. The company attributed its profit to the sale of Fibrenation business in early 2020 for £206 million. The move was aimed at minimising debt and raising funds to build its own fibre network.

At the time of writing, the British broadband company has a market cap of £1.08 billion and a price to earnings ratio of 30.69.