Debt-troubled UK broadband ISP TalkTalk recently published their group accounts for the year to 29th February 2024, which reveals that their on-net customer base (fibre FTTP/C and broadband) fell again to 3.6 million (down from 3.94m in 2023). But their Ethernet (leased lines etc.) base grew to 75,000 (up from 69,400).
The accounts cover the period BEFORE the group’s recent move to accept a refinancing package worth roughly £400m (here and here), which saved TalkTalk from the immediate risk of a default. The deal essentially extended the group’s debt maturities to September 2027 and buys them more time to fix the foundations, which won’t be an easy task (here).
The refinancing deal came after the Group had already spent much of the past few years wrestling with their suffocating debts, which in 2023 culminated in a move to demerge the group into three separate businesses (TalkTalk Consumer, TalkTalk Business Direct and the wholesale centric PlatformX Communications – here), while also cutting costs (e.g. marketing) and monetising some assets (e.g. selling IP addresses).
The hope was that such a demerger would make it easier to sell off individual parts of the business (selling the whole group has proven tricky) and the first piece to go was technically TalkTalk Business Direct, which ended up being sold to the company’s own shareholders for £95m after struggling to attract much interest (here). But so far there have been no further deals, while reports suggest that a proposed deal with Australian banking giant Macquarie for a stake in PlatformX (PXC) fell through.
The latest results, which were published toward the end of October 2024, help to underline the group’s challenges, even if they don’t yet fully reflect the very latest situation. In particular, it is noted that their fibre base declined by c.300k net adds to total 3.01 million (2023: 3.35m) and fibre (FTTC/P) penetration of their customer base now stands at 84% (2023: 85%).
However, the proportion of their overall broadband base on Fibre-to-the-Premises (FTTP) lines has grown to 15% (2023: 9%), while 22% of their FTTP base is now served by alternative networks including CityFibre, CommunityFibre, FreedomFibre and also Virgin Media (O2) – the rest come from Openreach. The ISP also reported having peak network usage of over 10Tbps (Terabits per second).
Summary of the TalkTalk Group’s Key Results to 29th Feb 2024
➤ Churn 1.9% (2023: 1.7%)
➤ Total employees of 1,824 (as at 29th Feb 2024)
➤ Capital expenditure grew to £126m (2023: £118m), mainly due to investing in the roll-out of FTTP and the backhaul network
➤ Ethernet base 75,000 (2023: 69,400)
➤ TalkTalk Business Direct had c.90,000 business customers
➤ On-net ARPU £25.74 (2023: £24.45)
➤ Fibre base declined by c.300k net adds to total 3.01 million (2023: 3.35m)
➤ On-net customer base (fibre and broadband) fell to 3.6 million (2023: 3.94m)
➤ Net debt grew to £986m (2023: £892m), rising to £1.763bn when including leases (2023: £1.604bn)
➤ Total statutory operating profit fell to £7m (2023: £36m)
➤ Headline EBITDA fell to £260m (2023: £297m)
➤ Statutory revenue grew to £1,472m (2023: £1,457m)