Cyber attack halves TalkTalk profits

Telecoms group TalkTalk said its profits halved last year after it suffered a high profile cyber-attack. But it claimed customers were now coming back because of the prompt action it took to regain trust.

The group said annual pre-tax profits fell to £14million in the year to March 31 from £32million last time as it took a £42million hit from last October’s security breach which saw customer data such as bank account numbers and sort codes being stolen. Revenues rose 2.4% to £1.83billion.

TalkTalk lost 101,000 subscribers in the quarter following the attack.

However, it said that customer churn, the turnover of people leaving the group, had improved during the last quarter and at 1.3% was its lowest ever figure.

It said its “open and honest” communications had been recognised by customers as being designed to help them protect themselves from potential fraud. It claimed that the vast majority of customers “believe we looked after them as a result”. Its unconditional free upgrade offer made to all customers through December had also helped it retain existing customers.

“The business bounced back strongly in the final quarter. This was testimony to the speed with which customer sentiment towards TalkTalk has recovered and the success of our greater focus on existing customers,” said chief executive Dido Harding. “There has never been a clearer space for a trusted value champion and our learnings from and experience since the cyber-attack have helped to focus our plans for the year ahead.”

It expects modest revenue growth in 2017 and earnings of between £320million and £360million.