TIDMTALK
RNS Number : 3599C
TalkTalk Telecom Group PLC
14 June 2019
RNS Announcement
14 June 2019
For Immediate Release
TalkTalk Telecom Group PLC (the "Company")
Publication of Annual Report 2019 & Notice of Annual General
Meeting
The following documents have been made available to
shareholders:
-- Annual Report 2019
-- Notice of 2019 Annual General Meeting
-- Form of Proxy for the 2019 Annual General Meeting
In accordance with Listing Rule 9.6.1 a copy of each of these
documents has been uploaded to the National Storage Mechanism and
will be available for viewing shortly at:
http://www.morningstar.co.uk/uk/NSM
These documents are also available to view and download from the
Company's website at: http://www.talktalkgroup.com
Copies of the Annual Report 2019 and Notice of the 2019 Annual
General Meeting may also be obtained from:
Company Secretary
11 Evesham Street
London
W11 4AR
Extracts from the Annual Report 2019 in compliance with the
Disclosure and Transparency Rule 6.3.5 ("DTR 6.3.5")
The information below, which is extracted from the Annual Report
2019, is included solely for the purpose of complying with DTR
6.3.5. It should be read in conjunction with the Company's Full
Year results announcement for the 12 months to 31 March 2019 issued
on 23 May 2019 (at:
https://www.talktalkgroup.com/articles/talktalkgroup/2019/FY19-Preliminary-Results-presentation-
)
Together these constitute the material required by DTR 6.3.5 to
be communicated to the media in unedited full text through a
Regulatory Information Service. This material is not a substitute
for reading the full Annual Report 2019. All page numbers and
cross-references in the extracted information below refer to page
numbers in the Annual Report 2019.
For further information please contact:
Tim Morris, Company Secretary +44 (0)203 417 1000
Directors' Responsibilities
The Directors' responsibility statement below has been prepared
in conjunction with the Annual Report 2019, whereas this
dissemination document contains extracts from the Annual Report
2019 to comply with DTR 6.3.5.
Sir Charles Dunstone - Executive Chairman
Tristia Harrison - Chief Executive Officer
Kate Ferry - Chief Financial Officer
John Gildersleeve - Deputy Chairman
Ian West - Senior Independent Director
John Allwood - Non-Executive Director
Cath Keers - Non-Executive Director
Sir Howard Stringer - Non-Executive Director
Roger Taylor - Non-Executive Director
Nigel Langstaff - Non-Executive Director
Phil Jordan - Non-Executive Director
We confirm to the best of our knowledge:
1. The financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
2. The management report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
Principal risks and uncertainties
Effectively managing risks
The Board has identified the following principal risks and
uncertainties to the Group, which the Group seeks to proactively
manage and monitor on an ongoing basis. The details of these
principal risks, and the controls in place for mitigating them, are
outlined below in no particular order of severity. The principal
risks have been identified and assessed on a gross risk basis with
consideration to the impact on the Group's ability to deliver its
strategy and therefore its mission. In addition, a directional
arrow has been included alongside each risk to reflect the
movements in gross risk from the prior year.
The Group's risk management framework facilitates continuous and
ongoing discussion of risks and associated risk appetite to ensure
that appropriate focus is placed on mitigating principal risks and
significant net risks are included in the Group Risk Register for
review at each Board meeting. The Board will continue to assess the
principal risks and uncertainties faced by the Group and will
update the risks and mitigation plans accordingly.
Management have reviewed the potential impact of Brexit and have
concluded the impact will be limited. In addition, management have
considered a soft/no Brexit on the Going Concern and viability
assessments, together with any other impact on the Group's
financial statements.
Gross risk
Gross risk has increased
Gross risk has decreased
Gross risk remains broadly the same as the prior year
Strategic objectives
1 - A happy, stable, profitable Consumer base
2 - Business data provider of choice
3 - Leveraging our network
4 - Driving cost efficiencies
5 - One TalkTalk team
6 - Investing in Britain's Full Fibre future
Risk and Impact Mitigation
--------------------------------------------- ---------------------------------------------------
1 Customer trust and brand reputation
Gross risk remains broadly the same as the prior year
1 2 3 4
--------------------------------------------------------------------------------------------------
Customer confidence and trust TalkTalk remains confident of the role
are critical to TalkTalk's business for a well-regarded value operator in
and the Company's operating approach the market and is committed to improving
always seeks to do what is right the end-to-end customer experience.
for the customer. However, as TalkTalk introduced its FLPP in October
a value for money connectivity 2016 which continue to resonate strongly
provider in the market, there with customers and, combined with the
is a risk that TalkTalk is perceived ongoing transformation of customer services,
as a 'budget' provider, associated the Company has managed to maintain growth
with price rather than quality in the core business in FY19 which is
and service. expected to continue into FY20. The organisation
Business and industry challenges also continues to invest in network and
including cyber threats, scam systems to support the provision of reliable
calls or poor customer experience products to customers as well as ongoing
also present a risk to brand investment in and focus on security (see
reputation and trust. Data and cyber security risk). These
Failure to maintain trust, improve factors have contributed to a stable
brand reputation and offer a risk landscape with steady customer confidence
positive customer experience and improving customer satisfaction.
may result in negative impact In addition, TalkTalk continues to support
to customer satisfaction, increased customers in dealing with the industry-wide
churn, performance decline or issue of scam calls. Initiatives such
loss of investor confidence. as the 'Beat the Scammers' campaign and
Call Safe are designed to help customers
protect themselves from the threat of
scams.
TalkTalk will continue to focus on existing
as well as new customers, guided by the
four key principles we believe are critical
to being a value for money connectivity
provider - simplicity, affordability,
reliability and fairness.
--------------------------------------------- ---------------------------------------------------
2 People capability
Gross risk has increased
3 4 5
--------------------------------------------------------------------------------------------------
TalkTalk recognises employees TalkTalk has established values which
as a key asset and aspires to act as a cultural framework and are embedded
be a 'Great Place to Work' for through the business in recruitment and
all colleagues. We understand performance management processes.
the increasing challenges and Structured talent forecasting and assessment
importance in the market of defining processes are in place to ensure required
an effective operating model talent is proactively understood and
and attracting and retaining actions plans are in place to actively
the right talent to deliver organisational manage attrition risks and succession.
performance and future growth These processes also ensure a proactive
aspirations. review of the senior management level
Failure to attract and retain to ensure the right leadership is in
required talent and competencies place for motivating, inspiring and leading
within an effective organisational the workforce to deliver on the corporate
environment may negatively impact objectives.
our ability to deliver on performance A people scorecard is also in place for
targets and strategic objectives. ongoing monitoring and oversight of people
Also, in November 2018 TalkTalk risk and, where required, actions to
announced that the vast majority further mitigate risk exposures are identified
of its London roles will be moved and implemented. In addition, Group-wide
to a single main campus in the activities are carried out to assess
current Salford site by January the level of employee engagement and
2020 to reduce operational complexity insight gained is used to develop action
and deliver a more efficient plans to ensure a highly engaged and
focused business. This will lead motivated workforce is maintained.
to further challenges in attracting The move of roles from the London site
and retaining talent as roles to the Salford main campus is being governed
are moved from the London office through a cross-functional programme
to Salford. with close oversight from the Executive
Committee and Board.
--------------------------------------------- ---------------------------------------------------
3 Competitive landscape
Gross risk remains broadly the same as the prior year
1 2 3 4 6
--------------------------------------------------------------------------------------------------
TalkTalk is established as a A clear pricing strategy is in place
value for money connectivity with ongoing monitoring of pricing position
provider in the growing quad and value proposition. The strategy is
play market. The value proposition reviewed to ensure it remains competitive
is a key part of the business and continues to support our position
model and to date has provided as a value for money provider against
competitor differentiation. Over the changing competitor activity landscape.
the last year significant competitor TalkTalk FLPP continue to see strong
activity has continued with similar customer take-up. FLPP offers both new
intensity to the prior year. and existing customers the opportunity
The competitive landscape therefore to lock in their price for the term of
remains largely unchanged with their contract guaranteeing no mid-contract
varying degrees of activity in price rises. The introduction of FLPP,
most product channels. The risk along with the focus on continuous improvement
that this competitive backdrop in connectivity, has seen a return to
makes it difficult for TalkTalk growth across both residential and Business
to maintain its value credentials customer bases. The introduction of the
remains consistent with the prior new industry leading Wi-Fi Hub in FY19
year. is driving great improvements in customer
experience and the Great Connection Guarantee
gives new customers confidence in switching
to TalkTalk as they can leave within
30 days if they are not happy with their
new Fibre connection.
In addition, competitor pricing activity
continues to be monitored to understand
customer and market impact and plans
are revisited accordingly if necessary.
TalkTalk uses customer communications
to promote its simple, affordable, reliable
and fair messages and is committed to
helping customers understand the best
positioned package to meet their needs.
--------------------------------------------- ---------------------------------------------------
4 Changing market structure
Gross risk remains broadly the same as the prior year
1 2 4 6
--------------------------------------------------------------------------------------------------
The Government and Ofcom are TalkTalk continues to be a vocal advocate
committed to promoting investment of competition and is well placed to
in Full Fibre networks through benefit from an increasing trend towards
infrastructure competition in a more pro-competition regulatory framework.
the UK telecommunications market. This poses a significant risk to incumbent
BT Group agreed to the legal players in the market, whilst presenting
separation of Openreach in March potentially valuable opportunities
2017 and implementation is in for challengers. The business is actively
progress under close scrutiny engaging with the necessary external
by Ofcom. Uncertainty remains stakeholders, particularly Ofcom and
about the extent to which this the Government, to share views and
will drive network investment attempt to deliver the best market
and service quality. and customer outcomes, as well as to
Ofcom's Wholesale Local Access proactively understand and respond
Market Review (WLAMR) has led to the opportunities and challenges
to: presented by structural market changes.
-- requirements for Openreach TalkTalk is well placed to benefit
to make it cheaper and simpler from the transition to Full Fibre networks.
for competitors to use its existing We are actively engaged with Openreach
infrastructure when building on product and service developments,
networks; including FTTP roll-out plans, in order
-- caps on wholesale broadband to pursue favourable outcomes for TalkTalk.
prices, including a reduction Through the creation of FibreNation,
in superfast broadband prices; we also continue to make good progress
and on our strategy to invest in an independent
-- higher service standards network that reaches three million
for Openreach installations homes and businesses.
and repairs.
The Government has also sought
to incentivise network competition,
through the FTIR, which included
a range of measures designed
to make it quicker, simpler
and cheaper for a range of companies
to build Full Fibre networks.
The FTIR complemented existing
Government policy, including
the Local Full Fibre Networks
Programme and the work of the
Government's Barrier Busting
Unit.
Ofcom is currently concluding
the BCMR and beginning the Access
Review. Together these reviews
will govern the future regulatory
landscape, including how regulation
will evolve as greater network
competition emerges.
------------------------------------------- --- ------------------------------------------------
5 Regulatory compliance
Gross risk has increased
1 2
--------------------------------------------------------------------------------------------------
The telecommunications sector The Group's Regulatory Compliance Committee,
is highly regulated, with compliance a subcommittee of the Board, has continued
over key customer-focused regulations to convene throughout the year to monitor
monitored by the governing body, the mitigation of operational risks
Ofcom. Another of the key governing which could give rise to customer complaints
bodies relevant to the Company and regulatory breaches. The Group
is the Information Commissioner's Legal Counsel and Company Secretary
Office (ICO). The regulations has chaired weekly compliance meetings
and laws that TalkTalk must throughout the year, attended by senior
comply with, including Ofcom management.
General Conditions and data There are clear lines of accountability
legislation, are designed to both in first-line operations and in
support customers. our second-line assurance function
Recent changes to the regulatory and there has been continued focus
landscape have increased the on embedding processes and controls
obligations on the business. to maintain compliance to industry
Changes include the General regulations including focus on delivering
Data Protection Regulation (GDPR), improvements in our complaint handling
revisions to Ofcom's General processes and reducing complaint volumes.
Conditions, an amended broadband Plans are also in place to deliver
speed code and the implementation the significant volume of regulatory
of a system of automatic compensation. changes which come into force over
Failure to comply with regulatory the next twelve months.
obligations may result in negative TalkTalk has established structured
customer impact and/or significant programmes to deliver changes resulting
regulatory fines. from Ofcom's end-to-end review of its
General Conditions. The progress of
this activity will be governed by the
existing Compliance Committee and meetings
to ensure effective delivery.
------------------------------------------- --- ------------------------------------------------
6 Data and cyber security
Gross risk remains broadly the same as the prior year
1 2 3
--------------------------------------------------------------------------------------------------
Security of customer, commercial In FY19 TalkTalk has continued to invest
and colleague data poses increasing in and focus on actively implementing
reputational and financial risk an ongoing programme to build security
to all businesses and the gross capability. Investment is also planned
risk remains high. In particular, to continue in FY20 and beyond. TalkTalk's
emerging developments in cyber security strategy is centred around
and data related threats and four strategic themes:
crime consistent with prior -- Secure by Design;
years present a significant -- Secure in Operations;
challenge in terms of securing -- Secure Third Parties; and
data and systems against attack. -- Secure Culture.
TalkTalk receives most of its The strategy is underpinned by the
revenue through card transactions NIST Cyber Security Framework and is
and like many businesses utilises positioned to continuously improve
third parties as part of doing the security maturity of the organisation,
business. TalkTalk recognises as well as maintaining and updating
that failure to successfully ongoing activities (such as monitoring
secure data and systems against activities, vulnerability scanning,
attack may have a material impact penetration testing and the data loss
on brand reputation and financial prevention solution) to ensure they
performance. Other associated remain fit for purpose.
costs may also be incurred, Over the last three years significant
including potential regulatory investment has been made in building
fines. out a bigger security function and
capability including successfully establishing
an in-house Security Operations Centre
(SOC), which launched late 2017. During
2018, further projects were delivered
to improve and mature our security
control environment and security capabilities.
These activities and investments are
supporting the management of security
risks and evolving security threats.
In addition, a robust governance structure
remains in place with a PLC Security
Committee meeting every two months.
This is a subcommittee of the Board,
chaired by a Non-Executive Board member,
with the CEO and other senior executive
representation. Furthermore, there
is a monthly Security Committee that
is made up of senior management across
all of key areas of the business to
discuss the latest security threats
and risks, approve changes and manage
exceptions to security policies, and
ensure that security projects are managed
effectively.
------------------------------------------- --- ------------------------------------------------
7 Resilience and business continuity
Gross risk remains broadly the same as the prior year
1 2 3 5 6
--------------------------------------------------------------------------------------------------
TalkTalk is reliant on its infrastructure Network resilience is assessed and
as well as key third party suppliers monitored on a regular basis and again,
and partners in order to deliver over the last year, TalkTalk has continued
quality products and services to deliver network analysis, improvements
to its customers. Network, system and simplification at pace supporting
or third party failure could greater resilience. Continuous monitoring
result in significant disruption of network availability is also in
to services or business processes, place to ensure any issues are identified
which may have a negative impact in a timely manner and resilience testing
on customers and therefore damage takes place. Where an incident does
customer loyalty or result in occur, a robust incident response process
complaints. It is therefore is in place and exercised to ensure
important to establish resilience effective response, followed by a problem
in the network and systems and management review that is linked to
also to require resilience from service improvement. The Group recognises
our third parties and partners. that network resilience is also reliant
The approach adopted for supporting on the dependency on Openreach for
infrastructure and associated the last mile and as such Ofcom focus
resilience, including use of on Openreach processes, systems and
third parties, is regularly controls should help mitigate the risk.
reviewed to ensure an optimal Other prioritised critical processes,
model is maintained which drives systems and third parties are identified,
resilience and efficiency. There and business owners are assigned accountability
is a risk that changes to approach for assessing resilience and implementing
may not be delivered effectively business continuity plans to enable
resulting in negative impact continuity of operations in the event
to operations. of an incident. TalkTalk also continues
It is also noted that in the to invest in supporting appropriate
event of an incident, TalkTalk resilience on critical systems which
must be able to respond in an will be a key focus for FY20 on a risk-based
efficient and effective manner approach. For third parties, the relationship
in order to minimise impact owners are assigned accountability
on customers and performance. for requiring critical third parties
to have adequate business continuity
plans in place and obtaining third
party assurance where appropriate that
their plans have been reviewed and
tested on a regular basis.
------------------------------------------- --- ------------------------------------------------
8 Financial
Gross risk has increased
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------
As with many organisations, The Group Treasury function is responsible
TalkTalk must actively manage for managing the Group's liquid resources
liquidity risk. Other key financial and managing compliance with the terms
risks include the availability of funding agreements. Policies and
of long term funding, the ability operating procedures are in place and
to comply with covenants and these are regularly reviewed to ensure
other terms of funding arrangements, they remain appropriate for the business.
and foreign exchange and interest In addition, the Executive Committee
rate risk. and the Board oversee the liquidity,
In addition, there are a number funding position and covenant compliance
of new accounting standards of the Group on a regular basis and
that either have been adopted are required to provide approval on
in FY19, being IFRS 9 'Financial major and significant funding decisions.
Instruments' and IFRS 15 'Revenue The Group Treasury function is also
from Contracts with Customers', responsible for managing foreign exchange
or will be adopted in FY20, and interest rate risks in line with
being IFRS 16 'Leases'. the Group's policy.
TalkTalk has established projects to
deliver the required changes to accounting
standards and the status of these projects
is tracked as part of the Group's Change
Management Framework.
------------------------------------------- --- ------------------------------------------------
9 Change delivery and execution
Gross risk has increased
1 2 3 5 6
--------------------------------------------------------------------------------------------------
Delivery of performance and A formal change framework is in place
strategic objectives and development for delivery of change projects which
of the business are reliant helps ensure appropriate processes
on the ability to successfully and governance are in place to drive
deliver innovation and other successful project delivery. The framework
operational changes required is intended to ensure a desired level
to support growth and performance. of quality is reached throughout the
Failure to effectively deliver lifecycle of each project and has continued
significant change programmes to support successful delivery of key
and associated benefits critical change programmes in FY19.
to TalkTalk's strategy would The Group Change function remains a
result in an inability to deliver key effective control for facilitating
performance objectives and limit prioritisation discussions to ensure
TalkTalk's competitive position people and financial resources are
in the market. appropriately engaged, allocated and
focused. Performance measures for key
change projects are defined and monitored
and regularly reviewed by Group Change.
Monitoring and oversight of key change
projects occur at both the business
unit leadership team level and by the
Executive Committee on a regular basis,
enabling real time consideration of
the potential impact of other operational
and strategic activities on change
projects.
In addition, as part of the organisational
reset, TalkTalk has aimed for further
simplification by concentrating on
fewer, more focused initiatives to
support delivery of simplified, clear
strategic objectives. This inherently
limits delivery and execution risk.
------------------------------------------- --- ------------------------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NOACKQDNBBKDOAD
(END) Dow Jones Newswires
June 14, 2019 08:41 ET (12:41 GMT)
Talktalk Telecom (LSE:TALK)
Historical Stock Chart
From Apr 2024 to May 2024
Talktalk Telecom (LSE:TALK)
Historical Stock Chart
From May 2023 to May 2024