Bloomberg News

TalkTalk Soars Most Ever on Raised Margin Forecast: London Mover

May 17, 2012

TalkTalk Telecom Group Plc Chief Executive Officer Dido Harding

TalkTalk Telecom Group Plc Chief Executive Officer Dido Harding said, “We’ve made more progress on unbundling our customers than we expected.” Photographer: Chris Ratcliffe/Bloomberg

TalkTalk Telecom Group Plc (TALK) advanced the most ever in London trading after raising its margin forecast on transferring customers to its own network faster than it predicted.

TalkTalk, the British broadband provider split off from Carphone Warehouse Group Plc, soared 20 percent, the steepest gain since the shares started trading in March 2010. The stock closed at 159 pence, for a 12-month gain of 30 percent.

The company has reached its 20 percent margin target for earnings before interest, taxes, depreciation, and amortization, set out 18 months ago, and raised its forecast to 25 percent for the mid-term, London-based TalkTalk said today.

“We’ve made more progress on unbundling our customers than we expected,” Chief Executive Officer Dido Harding said in an interview, referring to the transfer of customers from the network of BT Group Plc (BT/A) to that of TalkTalk. “But we won’t be as quick” on the new target.

The company is nearing completion of the transfer of clients from BT’s network and has cut one-third of its headcount within a year as customer broadband additions fall. TalkTalk is also preparing to unveil the repeatedly delayed YouView Internet TV joint venture to boost demand for its offers.

“I’m not that fussed about the date of the launch,” said Harding, a former J Sainsbury Plc (SBRY) executive. TalkTalk will start its TV campaign in September after the Olympic Games, she said.

“Is it working perfectly yet? No, it’s not,” Harding said of the proposed catch-up service. The programming design and layout may resemble the BBC’s iPlayer service, she said.

To contact the reporter on this story: Jonathan Browning in London at jbrowning9@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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