TalkTalk raises dividend as CEO reveals cyber-attack costs


Telecoms group TalkTalk has put the cost of last month’s cyber-attack at up to £35m but confounded market expectations by raising its dividend, sending its shares soaring by 12 per cent.

Some analysts had feared that the dividend might be axed but instead it was raised by 15 per cent to 5.29p, which the company’s chief executive, Dido Harding, said underlined the group’s confidence in its future, reports The Guardian.

TalkTalk shares raced ahead to 245p but are still below the 290p level at which they were trading before the cyber-attack last month.

Harding told the BBC that the one-off costs covered the response to the attack, inquires to its call centres and additional IT and technology costs, as well as lost revenue from its online sales sites being down over the past three weeks.

She added: “We of course saw an immediate spike in customers cancelling their direct debit, but actually after a few days we saw many of those customers reinstating their direct debits again, so time will tell, but the early signs are that customers think we are doing the right thing.”

TalkTalk is offering all customers a free upgrade. The firm, which had four million customers in the UK before the attack, said it was still too early to assess the impact on customer numbers, but estimates that it will cost the firm £30-35m.

Customers who were affected directly are free to leave Talk Talk without financial penalty. Harding said the company was writing to all its customers outlining what it is doing to keep their data safe.

It emerged last week that almost 157,000 TalkTalk customers had their personal details hacked, including 15,656 whose bank account numbers and sort codes were hacked. The total amounts to 4 per cent of its 4 million customers.

TalkTalk has faced growing criticism after it warned that the stolen customer data may not have been securely encrypted. Harding said last month that she had personally been contacted by someone purporting to be the hacker, who made a ransom demand.

Revenues rose 4.7 per cent to £912m in the six months to 30 September. Earnings before interest, tax, depreciation and amortisation fell to £90m from £110m.

The cyber-attack was the second time in the past 12 months that TalkTalk customers have been affected by data breaches.