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TalkTalk predicts £15mln hit from coronavirus, flat earnings for current year

The forecasts accompanied figures for the group's previous financial year, which saw earnings rise amid a surge in broadband and phone line demand during the coronavirus lockdown

Talktalk Telecom Group PLC - TalkTalk predicts £15mln hit from coronavirus, flat earnings for current year

TalkTalk Telecom Group PLC (LON:TALK) has predicted that its business will suffer a £15mln hit from the coronavirus in its current financial year alongside “stable” headline earnings (EBITDA).

For the year ended 31 March, the FTSE 250 group reported a headline EBITDA of £260mln, up from £237mln in the prior year, while revenues fell to £1.57bn from £1.63bn in 2019.

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The company said that its fibre broadband base had increased by 34% during the year, while a revenue decline from declines in voice usage and its legacy copper wire internet base had been offset by cost reductions.

TalkTalk also declared a final dividend of 1.5p, the same as the prior year, with a total dividend for the period of 2.5p.

Over the year, the company said the lockdown measures during the coronavirus quarantine had resulted in “material increases” in daytime internet traffic and voice usage, however, it added that its business will “not be completely immune from the longer-lasting macroeconomic impacts of the virus”.

As a result, the company did not provide formal guidance for the coming year, however, it said its headline EBITDA will be stable assuming the £15mln impact form coronavirus and also said it will maintain its 2.5p dividend.

“Access to reliable, affordable connectivity has never been so important - and low prices matter now more than ever before. As the only scale, value provider, TalkTalk continues to be well positioned to meet this demand”, said TalkTalk chief executive Tristia Harrison.

“Looking ahead to [the 2021 financial year], we remain in a robust operational and financial position, with levers in our control to manage costs further”, the CEO added.

The shares fell 4% to 95.4p in early trading on Thursday.

Quick facts: Talktalk Telecom Group PLC

Price: 99 GBX

LSE:TALK
Market: LSE
Market Cap: £1.13 billion
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