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TalkTalk sees profits halved as security breach takes its toll

Loss of 100,000 customers, and thousands of personal details, weighs heavy on the broadband and comms provider

TalkTalk has reported a halving of its full-year, pre-tax profits, on a yearly basis, with its October 2015 massive data loss still clearly affecting the business.

Last year’s cyber attack cost the broadband provider 100,000 customers, and between £40m and £45m in costs. As a consequence, pre-tax profits were down to £14m, from £32m, although revenues grew slightly from £1.79bn to £1.83bn.

The October 2015 security breach saw over 150,000 of TalkTalk customers’ details compromised, and led to extensive criticism of CEO Dido Harding over her response to the attack.

In year-end results, TalkTalk claimed it was now well on the road to recovery, and added that its “open and honest” communications had been recognised by customers.

It also said its decision to focus on marketing to existing users meant the post-breach churn was not as bad as feared, while its unconditional free upgrade offer had driven high levels of engagement, with nearly 500,000 users taking up the offer.

Harding said in the final quarter of its financial year, trading at TalkTalk had almost returned to normal, with the company recording its “lowest ever churn” and a “stabilised” broadband base.

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