TalkTalk profits halve after cyber attack

Profits fell to £14 million compared to £32 million a year earlier

Hazel Sheffield
Thursday 12 May 2016 09:48
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Chief executive of TalkTalk, Dido Harding, said she did not know the extent of unencrypted data
Chief executive of TalkTalk, Dido Harding, said she did not know the extent of unencrypted data

TalkTalk profits have more than halved after an attack on its systems last October resulted in 160,000 customers' credit card and bank card details being exposed.

Profits fell to £14 million compared to £32 million a year earlier.

The "significant and sustained cyber attack" cost TalkTalk £42 million and resulted in the loss of 101,000 subscribers in the third quarter of 2015 as users fled to other networks.

Dido Harding, TalkTalk chief executive, told the BBC that TalkTalk was working to regain trust.

“We have significantly increased our spending on security. We take this extremely seriously," she said.

She added that customer losses had stabilised since the attack, which she was as "testimony to the fact that our customers really appreciated our open and honest approach".

In November, TalkTalk offered all of its customers a free upgrade to compensate for the cyber attack.

That resulted in improved results for the fourth quarter, when TalkTalk added 148,000 subscribers.

TalkTalk's customer “churn” - the turnover of customers - has been the lowest in TalkTalk's history, which suggests customers are satisfied with the company's service.

Joshua Raymond of CFD and FX broker XTB.com, said this was a very positive sign and proof that a line had been drawn under the hacking. "What's crucial to see now for shareholders is a consistent level of growth in new subscribers quarter on quarter and a return to stability in earnings at the firm," he said.

There have been six arrests in connection with the hacking, all of them individuals under the age of 21.

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