Talk Talk shares fall as operator warns on profits

Talk Talk has warned it will miss its own profit guidance and analyst expectations as it was hit by new accounting standards and investment in its fibre network.

The mobile and broadband provider said it expects earnings before interest, tax, depreciation and amortisation (Ebitda) will fall between £245m and £250m for the 2019 financial year.

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This is £10m-£15m short of the average expectation of polled analysts, the company said.

Shares dropped nearly ten per cent to 101p as markets opened this morning, before trimming losses to stand 7.6 per cent down at 103.1p by 9am.

Earnings will also be lower after the firm switched the way it reports certain revenues with IFRS 15 accounting standards.

But the figures still represent a strong uptick from the 2018 financial year when the company's earnings lay at £197m.

Looking ahead, Talk Talk said it expects the financial year beginning in April to meet market expectations of around £271m Ebitda. It hopes to capitalise on customer momentum and cost savings, which including a new headquarters.

Chief executive Tristia Harrison said: "We continue to see strong trading momentum in the business, with customer growth ahead of expectations. The third quarter was the eighth consecutive quarter of rising customer numbers and we saw record demand for fibre.

"The underlying business is on track. The change to earnings guidance is due to IFRS 15 timing adjustments and investment in growth."

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Talkt Talk added a further 44,000 customers in the quarter, hitting double digits in both consumer and company sales. It now has nearly 4.3m customers.

To date, the company has signed up 148,000 broadband customers, putting it in a good position to smash its 150,000 target for the full financial year.