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TalkTalk Telecom Q3 Headline Group Revenue Up 1%; To Temporarily Reduce Dividend

TalkTalk Telecom Group PLC (TALK.L) reported that its Headline Group revenue for the third quarter rose 1 percent from last year to 388 million pounds.

The company noted that net adds in the quarter were 37k, with strong-on-net base growth in both retail and wholesale.

For fiscal 2018, the company said that an acceleration in net adds has led it to raise the current forecast to 150k-160k for the full year. This investment in growth has resulted in it revising the company's EBITDA guidance to a range of 230 million pounds to 245 million pounds.

Looking ahead to fiscal 2019, the company said it expects growth in Headline Group revenue, net adds growth consistent with fiscal 2018, stabilising ARPU and significant cost reduction as it continues to radically simplify the business. The company expects EBITDA growth of 15 percent.

To reflect the next phase of growth, the company will temporarily reduce the dividend to 2.5 pence per annum to fund continued investment in growth and the company's share in full fibre investment. There will be a final dividend of 1.5 pence in fiscal 2018, consistent with this new dividend policy.

Fiscal 2019 will see an interim dividend of 1.0 pence and a final dividend of 1.5 pence. The company intends on returning to a normalised dividend of 7.5 pence when leverage is reduced to 2.0x EBITDA.

TalkTalk announced a placing of new ordinary shares of 0.1 pence each in the capital of the company to raise up to 200 million pounds, before expenses. The number of placing shares to be issued by the company will not exceed 19.99 per cent of the existing issued share capital of the company.

The Executive Chairman and other directors of the company have indicated their intention to participate in the Placing up to an aggregate amount of 40 million pounds.

TalkTalk also said it is in discussions with Infracapital to provide full fibre roll out across the UK.

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