Profit growth boosts TalkTalk forecasts

UK ISP TalkTalk is standing by full year earnings forecasts and outlined plans for EBITDA growth in the medium-term, after growing profits by £3 million (€3.5 million) in its 1H11.
 
The Web firm’s profits hit £50 million during the period – covering the six months to end-September - as revenues grew almost £100 million to £887 million year-on-year due to higher ARPU of £24.70.
 
EBITDA grew from £103 million in 1H10 to £121 million, and the firm now aims to grow the margin from 13.6% at end-September to 20% in the medium-term through the launch of new services including quad-play bundles, and by shaving £40 million to £50 million from operating costs.
 
Chief executive Dido Harding said the firm’s unbundled next generation network is key to delivering new services, and outlined plans to add 700 new exchanges to boost penetration from 81% of its customers at present, to 93%.
 
Integration of Tiscali customers – acquired when TalkTalk bought the rival provider in July 2009 – is on-track to be completed by the year-end, Harding added. “Our integration programme is delivering higher than expected synergy benefits and we are now raising our synergies target to £55 million.”
 
The integration process hit problems a fortnight ago when regulator Ofcom ruled TalkTalk – which de-merged from Carphone Warehouse in March - had billed customers for services that had been cancelled, FT.com notes.
 
Regardless, TalkTalk is standing by full-year guidance of a 6% to 8% increase in revenues, and EBITDA margin of 14.5% to 15.5%.

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