Revenues down but profits up at TalkTalk

Broadband provider TalkTalk saw a rise in pre-tax profits despite a fall in revenue for the half year ended 30 September.

Revenue fell 4.8% from £887m to £884m, but profit before tax rose from £17m to £41m on a like-for-like basis.

Profit was largely boosted by a significant reduction in cost of sales, from £450m to £409m.

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Dido Harding, chief executive of TalkTalk, said: "These results prove we are delivering on our strategy. Earnings are up 36% half on half and this growth, combined with our enhanced dividend policy, has driven an increase in the dividend of more than 50%.

"We are ahead of plan on our unbundled exchange roll out and making significant progress towards our £40-50m operating efficiency target. In the short term, we fully expect to achieve the upper end of our margin and earnings targets for this year.

"Looking further ahead, we remain confident that the combination of our attractive market positioning, ongoing operational improvements and compelling developments in our product offering leaves us well placed to achieve our medium term objectives of 20% EBITDA margins and 2% revenue CAGR."

Cash at the end of the period rose from a loss of £14m in 2010 to a profit of £28m this year.

NR