Revenues at internet provider rise to £387m as demand grows for streamed TV

Revenues at Salford based internet provider TalkTalk have increased by 1.3% to £387m.

The firm said in a trading update that the move to MediaCity from London has helped it to cut costs by up to £30m.

Growing demand for streamed TV shows is helping to push up demand for faster, more reliable and more expensive fibre internet.

The demand is pushing up the amount TalkTalk makes for every customer, with the average consumer now spending £24.72 a year.

The company is also seeking to cut costs, moving to a self-service model for customer service and has saved up to £30m a year by moving its head office out of London.

It added that the full year outlook remains unchanged, with strong EBITDA growth driven by Fibre penetration and cost savings

Chief executive Tristia Harrison said: “Q1 is in line with our plan. Revenue and Consumer ARPU rose year on year, underpinned by very strong demand for faster, more reliable Fibre products.

“Up to 75% of new Consumer customers are now taking Fibre and we’re seeing more customers than ever choose the faster of our fibre products.

“In addition, our ongoing simplification and cost reductions continue to drive improvement in profitability, and we remain on track to deliver EBITDA in line with expectations for the year.”

Cost savings are on track with lower wholesale costs due to commercial discounts, ongoing cost to serve reductions as the firm moves to a self-service model.

There were significant cost savings from the move of the head office to Salford.

There were savings of £25m-£30m, with £16m-£20m next year.

The firm’s guidance of strong EBITDA growth for next year remains unchanged, underpinned by accelerated fibre penetration and cost reduction plans.

The company has been affected by poor ratings for customer service and has been looking to rebuild trust after a major cyber-attack that resulted in it being fined £400,000.

Russ Mould, investment director at Manchester investment company AJ Bell, said: “For a company with such a troubled history as TalkTalk, saying that earnings guidance is unchanged is cracking news for its shareholders.

“They can breathe a sigh of relief that there aren’t new problems to depress the share price and that the business is getting on with the day job.

“And to its credit, customer churn rates are low, and it has nearly doubled the number of net customer additions to its fibre products.”