Investor schizophrenia rules
Shares in Britain’s broadband and mobile operator TalkTalk continued their roller coaster ride today [November 14th 2012] after plunging nearly 6 per cent in early trading, offsetting major gains yesterday.
The company, chaired by Carphone Warehouse boss Charles Dunstone, had reached a record high last night after revealing solid first half results and revealing how its new mobile division had added 32,000 users over the period, taking its customer base to 117,000. It also has has more than 4 million broadband subscribers.Despite being hit last year hit with a £3 million fine for shoddy service and forced to pay out £2.5 million to customers who were billed despite cancelling their packages, it still managed a 4 per cent rise in gross profit to £453 million in the six months to 30 September 2012.
The news sent TalkTalk’s shares to a record high of 220 pence at close yesterday [November 13th 2012], but today the gloss was taken off when the stock plummeted to around the 209 pence mark just before midday.
Meanwhile Dunstone’s other company Carphone Warehouse was today similarly reporting a 5 per cent like-for-like increase for the same trading period as TalkTalk.
Profit before tax was up 30 per cent to £8.6 million thanks to strong postpay momentum, with the company on track to deliver full year pre-tax profits of £130 million to £150 million.
The retailer has also been building up its portfolio of Wireless World stores and will have 280 stores in the UK by Xmas  with elements due to be rolled out to the rest of Carphone’s 500 UK store portfolio.
Exceptional charges are expected in the second half of 2012, however, with provisional estimates of one-off pre-tax cash costs of between £20 million and £25 million.
The news sent Carphone’s shares up nearly 5 per cent to 184 pence in early trading, though the price is still a far cry from the 354 pence it commanded this time last year .