TalkTalk profits halve in cyber attack fallout
Published 12/05/2016 | 10:33
Pre-tax profits have plunged to £14m in the year to April, as the company feels the effects of the cyber attack.
Pre-tax profits have plunged to £14m in the year to April, as the company feels the effects of the cyber attack
TalkTalk’s boss Dido Harding has insisted the budget broadband provider has “bounced back” from a vicious cyber attack, despite revealing that profits halved at the telecoms company last year.
The firm, which was targeted by hackers last October, saw pre-tax profits plunge to £14m in the year to March, from £32m a year earlier, as the the company counted the costs of the data breach.
Baroness Harding, who was forced to apologise after more than 100,000 customers had data stolen, is hoping to draw a line under the disaster, which cost the company up to £60m.
She said: “Customer sentiment towards TalkTalk has recovered. Our learnings from, and experience since, the cyber attack have helped to focus our plans.”
Sales at the FTSE 250 company came in ahead of expectations, rising 2.4pc to £1.84bn, as customers were offered sweeteners such as a free TV upgrade in the wake of the hack.
So far this year, TalkTalk has recorded its highest-ever levels of customer loyalty as measured by “churn” – the rate at which customers are leaving.
However, despite a low 1.3pc churn rate, the hack attack alone cost TalkTalk 95,000 customers over the year, meaning that in the 12 months to April, TalkTalk added just 4,000 customers to its phone and broadband service.
The telecoms group has now changed its strategy from undercutting rivals on price to improving its customer service, spending £19m over the period on an IT project to improve service and prevent billing errors.
Ms Harding said: “Our greater focus on customers has been a success, and we are seeing growing benefits from our simplification programme.”