Communications group confident of overcoming £15m COVID-19 hit
TalkTalk, the Salford-based communications group, said it is confident of overcoming the £15m hit from coronavirus it highlighted last month.
The group warned investors that the COVID-19 lockdown would impact its figures, mainly through trading restrictions and the cancellation of live sports.
But in a first quarter trading update to June 30, today, it said while its £15m estimate remains conservative based on current bad debt trends in both its consumer and B2B markets, it has been offset by incremental and ongoing cost savings of a similar amount, with all key cost areas significantly lower year-on-year.
June and July has seen trading recovery and significant ARPU (average revenue per user) improvement.
The group expects ARPU to continue to improve through the remainder of the year, driven by growth of fibre and ethernet products.
It revealed that, excluding the COVID-19 impacts and voice usage, quarter four to quarter one revenue and ARPU would have been flat.
The group’s B2B ethernet trading has recovered to pre-COVID-19 levels, while it has also secured a number of meaningful B2B contract wins in the period.
Chief executive Tristia Harrison said: “As the UK’s internet usage continues to soar, our role as the UK’s only scale affordable provider of fibre broadband has become even more important.
“Given this, we see a positive outlook to H1 and are confident in our full year plan to deliver stable to growing Headline EBITDA with strong cash conversion.
“As with many businesses, we have seen a short-term COVID-19 impact, primarily due to lockdown trading restrictions and cancellation of live sports.
“Revenue, fibre net adds and ARPU trends have all improved in June and July as lockdown restrictions have eased.
“Encouragingly, customer payment trends are in line with the pre-COVID-19 period and we continue to see an ever-increasing demand for our higher speed fibre and ethernet products.”
She added: “We are also pleased to have launched our new ‘Business Grade Homeworker’ packages for consumers and businesses, as the country adapts to working from home for the long-term.
“It is early days, but sales are strong.
“In addition, we are launching our full fibre services with Openreach and continuing to sell on the CityFibre Holdings network at scale.
“The last few months have shown that the Government’s ambition to reach UK-wide full fibre penetration by 2025 is more essential than ever before.”
