TalkTalk shares plummeted 18 per cent at one point today after the broadband provider slashed it full-year dividend in half and issued a warning over its profits. The stock clawed back some of the fall to sit 10.8 per cent lower at 162.7 pence by mid-morning. The company's final dividend has been cut from 10.58p to 5p, and the FTSE 250 firm said next year's earnings would be between £270 million and £300 million, with this year's falling short of expectations at £304 million. TalkTalk shares plummeted 17 per cent this morning after a dividend cut. Pre-tax profits jumped to £70 million from £14 million last year however, after suffering a £60million hit to its books stemming from hack of 160,000 customers' details two years ago. The debacle was branded a 'car crash' by the then information commissioner Christopher Graham, who said it should send a warning shot to the industry. The attack led to tens of thousands of customers deserting the firm and cost it £60 million. TalkTalk's customer base has returned to growth though, expanding by 22,000 in the fourth quarter, while the proportion of customers leaving the provider over the period dropped to 1.4 per cent from 1.64 per cent over the period. Total revenue slipped 3 per cent to £1.8 billion in the 12 months to the end of March this year, but the group said more than one million customers had signed up to new plans. Executive chairman Sir Charles Dunstone said his focus for the company was 'growth, cash generation and profit - in that order'. He added: 'We will be smart about how we invest, focusing on our fixed network, avoiding other capital intensive distractions. 'In light of these new priorities, we have also decided to reset the dividend as we look to deliver growth and strong sustainable shareholder returns over the long term.' Charles Dunstone is executive chairman of Talk Talk. The results come as Tristia Harrison replaces Dido Harding as chief executive in a shake-up that has also seen Dunstone step up from chairman to executive chairman. Harrison said: 'The last 12 months have seen the business lay down solid foundations from which to drive sustainable base and revenue growth in both our retail and B2B businesses.' 'Talk Talk's 8 per cent-plus dividend yield at yesterday's close looked like it was in 'too good to be true' territory, especially as earnings cover for the pay-out was less than one times,' noted Russ Mould, investment director at AJ Bell. 'But, the cut in the 2018 dividend to 7.5p is deeper than expected and that explains why the shares are receiving such harsh treatment this morning. However, executive chairman Sir Charles Dunstone and new chief executive officer Tristia Harrison have done the right thing, freeing up cash to invest in the business and tackle the company's debts.' 'The shares still yield more than 4.5 per cent after today's share price plunge and the proposed reduction in the dividend to 7.5p next year,' he continued. 'That figure may catch the eye of income-hunters, especially as the company has arranged new debt facilities, the new management team is already reviewing the mobile telecoms strategy so it is less cash hungry and Talk Talk can point to a return to growth in its customer base in the fourth quarter, to suggest it may be getting over the reputational damage done by 2015's cyber-attack.' Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
BT 's shares fell 18 % on Wednesday , 10 May after it slashed its full - year dividends in half and issued a warning over its profits . The telecoms firm managed to recover some of this loss to sit 10.8 % lower at 162.7p ( $ 2.1 ) by mid - morning . TalkTalk 's final price per share has been cut from 10.58p to 5p . The company has fallen short of this year 's earnings target of £ 250 m , with next year 's earnings expected to be between £ 270 m and £ 300 m .