TalkTalk under pressure from growing debts as Sir Charles Dunstone seeks £3bn sale

The budget broadband provider TalkTalk has been warned by its auditor that presenting its accounts on a going concern basis is increasingly risky as it comes under pressure from its £1.1bn debt pile. They conclude that in a reasonable worst case scenario, TalkTalk would only be able to meet the covenants on its debt by excluding more “exceptional items” from everyday costs, such as acquiring and retaining customers. Highlighting an increased level of risk to TalkTalk’s status as a going concern they added: “We have identified a key audit matter related to going concern as a result of the judgements required to conclude there is not a material uncertainty related to going concern.” Deloitte said there was a “high level of estimation” in how revenues were recognised, and “a high level of management judgement” in the decision to account for the £31m costs of switching customers from copper to fibre broadband as exceptional. TalkTalk, Britain’s fourth-largest broadband provider with four million customers, is controlled by the investment fund Toscafund following a buyout that ended its run as a public company last year.