Telecoms giant Talk Talk posted a pre-tax profit significantly ahead of the previous year, sending the share price soaring in earling trading.
Profit before tax for the year was £127m, compared to £57m the previous year, while revenue for the year came in at £1,687m, in line with forecasts and down 4.0% compared to £1,765m the previous year, principally driven by the continued reduction in the non-broadband customer base.
Broadband revenue was broadly flat year on year at £1,242m (2011: £1,247m) reflecting the increasing ARPU throughout the year offsetting the reduction in the total base in the second and third quarters of the year.
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EBITDA (earnings before interest, tax, depreciation and amortisation) was £299m, compared to £228m the previous year. Meanwhile, the EBITDA margin hit its target of 20% "significant ahead of schedule". Cost of sales fell from £877m to £803m and is set to remain flat in 2013.
Headline earnings per share rose 33.3% from 13.5p to 18p. The final dividend was raised to 6.4p, taking the full year dividend to 9p per share (2011: 5.6p) ahead of expectations of 8.19p.
Dido Harding, Chief Executive, said: "Our focus on improving customer service has driven a real improvement in customer numbers and we are on track to deliver total customer growth in the current quarter. Our strategy has delivered a materially more profitable and stable customer base and a leaner, more efficient cost structure, giving us a strong platform from which to invest in growth opportunities such as YouView.
"We are underscoring our confidence in the long term prospects for the business by raising our medium term EBITDA margin target to 25% and a commitment to grow the FY13 and FY14 dividend by at least 15% per annum, while at the same time investing in growth.
"We see significant opportunities ahead of us to grow both revenues and profitability."
Over the next five years the company plans it increase its network capacity by over 100 times and will optimise its network for video content, security and access to cloud services.
The share price soared 14.85% to 152.40p by 09:25.
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