TalkTalk eyes return to full year revenue growth

Telecoms operator TalkTalk said it is on track to return to revenue growth in the full year as revenue fell by 2 per cent to £828m in the half year.

The group, which started its own YouView TV service in September, said underlying core earnings for the six months to September 30th 2012 climbed 6.2% to £155m. Revenue was boosted by strong growth in new data products. On-net revenue rose to £573m from £524m in the same period last year.

Gross profit increased to £453m from £435m while gross margin increased to 54.7% from 51.5% as broadband only customers were replaced by higher value on-net broadband and voice, the group explained.

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Chief Executive Dido Harding commented: "These results show real trading momentum and are a strong platform from which to build towards our medium term growth targets. We have successfully launched our TV proposition and have installed 29,000 customers to date. Customer feedback has been positive and we are growing the base according to plan, at 1,000 per day."

"Meanwhile, our mobile handset proposition is growing meaningfully in the contract handset market. The demand we are seeing for additional products from our increasingly profitable and stable customer base, the progress we are making in TalkTalk Business, and the savings we expect from the next phase of simplifying the business, underpin our confidence in delivering our targeted 2% CAGR in revenues and 25% EBITDA margin in the medium term."

The interim dividend has been raised to 3.45p from 2.6p before.

CJ