TIDMTALK
RNS Number : 5368Q
TalkTalk Telecom Group PLC
19 June 2020
RNS Announcement
19 June 2020
For Immediate Release
TalkTalk Telecom Group PLC (the "Company")
Publication of Annual Report 2020 ('ARA') and Notice ('Notice')
of 2020 Annual General Meeting ('AGM')
The following documents have been made available to
shareholders:
-- ARA
-- Notice
-- Form of Proxy for the AGM
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:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
These documents are also available to view and download from the
Company's website at: http://www.talktalkgroup.com .
Copies of the ARA and Notice may also be obtained from:
Company Secretary
Soapworks
Ordsall Lane
Salford
M5 3TT
Covid-19 - Closed Meeting
Due to the Covid-19 pandemic and current social distancing
measures, the AGM will be run as a closed meeting and shareholders
will not be permitted to attend in person. The Company will ensure
that the legal requirements to hold the meeting will be satisfied
through the attendance of a minimum number of directors and the
format of the meeting will be purely functional. The AGM will
comprise of only the formal votes on each resolution set out in the
Notice, without any business update or Q&A. Further information
and details on voting can be found in the Notice.
Extracts from the ARA in compliance with the Disclosure and
Transparency Rule 6.3.5 ("DTR 6.3.5").
The information below, which is extracted from the ARA, 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 2020 issued on 11 June
2020 (at:
https://www.talktalkgroup.com/article/talktalkgroup/2020/TalkTalk-FY20-Preliminary-Results
).
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 ARA. All page numbers and cross-references in
the extracted information below refer to page numbers in the
ARA.
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 ARA, whereas this dissemination document
contains extracts from the ARA 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
Sir Howard Stringer - Non-Executive Director
Roger Taylor - Non-Executive Director
Nigel Langstaff - Non-Executive Director
Phil Jordan - Non-Executive Director
Paul Reynolds - 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
Every organisation faces risks of varying severity as an
inherent part of doing business. Some of these are within the
control of the organisation and others are not.
The Board has identified the following principal risks and
uncertainties to the Group. 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. This
ensures the appropriate focus is placed on mitigating principal
risks and significant net risks are assigned an Executive Committee
owner and 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.
COVID-19
The Board acknowledges that the COVID-19 pandemic poses a
variety of risks and uncertainties to all global businesses,
including TalkTalk, and have included a new specific Principal Risk
and Uncertainty this year. However, due to the uncertainty around
the scale, timing and impact of COVID-19, it is impossible at this
time to accurately quantify with certainty the risks associated
with the pandemic. The Chief Executive's Review on pages 5-8 and
Chief Financial Officer's statement on pages 16-19 outlines the
impacts seen on operational and financial performance so far.
Scenario planning is being worked through to understand how the
pandemic will impact TalkTalk in the short, medium and long term.
Specific COVID-19 commentary has been included in the individual
Principal Risks and Uncertainties where relevant.
Risk management framework
Strategic governance
Board
Audit Committee
Remuneration Committee
Nomination Committee
Compliance Committee and Security Committee
Operational and financial governance
Senior Management Team (Executive Committee)
First line of defence
Operational management
Second line of defence
Central support functions
Third line of defence
Audit and Risk function
Including Internal Audit, risk management and external
advisers
Strategic objectives
Find our strategy on page 12
1 Investing in the UK's Fibre future
2 Creating the Fibre first challenger for Consumers
3 Strengthening position as Business data provider of choice
4 Leveraging our scale and network to further enhance customer experience
5 Continuing to deliver cost efficiencies
6 Operating as one TalkTalk team
Gross risk
Gross risk has increased
Gross risk has decreased
Gross risk remains broadly the same
COVID-19
1 2 3 4 5 6 FY20 Gross risk has increased FY19 n/a
Risk and impact Mitigation
The COVID-19 pandemic is having
wide-ranging impacts on the
worldwide economy and could
impact the Group's employees,
operations, suppliers and customers, -- Three governance workstreams have
through lockdowns, disrupted been set up to manage our overall COVID-19
supply chains, social distancing response, led by members of our Executive
measures and wider impacts Committee;
on the UK economy. -- Measures have been implemented to
Further detail on the implications ensure the health and safety of our
to the Group are provided in workforce and customers whilst we continue
the Chief Executive Officer's our provision of critical services;
review on pages 5-8. -- We continue to focus on our network
Potential COVID-19 impacts: resilience, constantly monitoring our
-- Continuing strong demand network to forecast and respond to the
for the Group's services, but ongoing demand, maintaining stability
potential for a reduction in and minimising any congestion;
revenue/margin given the wider -- The service of our vulnerable customers
UK economic impacts; has been prioritised and our digital
-- Lower new customer connections, service channels have been enhanced
but also lower customer churn; for all customers;
-- Adverse impact on trading -- The change delivery plan is being
cash generation; closely reviewed and monitored by the
-- Financial and operational Executive Committee to manage any COVID-19
constraints could impact the impacts;
delivery of change; -- We have worked closely with our supply
-- Increase in bad debts, especially chain to ensure we have adequate inventory
with small to medium enterprises coverage for our operations;
due to financial distress; -- Our well established information
-- Reduction in operating costs security controls have been enhanced
primarily due to non-availability and our Security Operations Centre has
of third party customer service reduced the thresholds of existing monitoring;
providers and changes to marketing and
activity; and -- We continue to closely monitor and
-- An increase in volume and forecast the financial impacts of COVID-19
scale of financially motivated to identify and manage any further risks
cyber attacks. and opportunities.
------------------------------------- -----------------------------------------------
Customer trust and brand reputation
1 2 3 4 FY20 Gross risk remains broadly the same FY19 Gross risk
remains broadly the same
Risk and impact Mitigation
TalkTalk remains confident of the role
for a well-regarded value operator in
the market and is committed to improving
the end-to-end customer experience across
all touchpoints.
TalkTalk introduced their Fixed Low
Price Plans (FLPP) in 2016 which continue
to resonate strongly with customers
and combined with the ongoing transformation
of customer services, the Group has
maintained the core business during
the year with further attractive customer
offerings. The organisation also continues
to invest in the network and systems
to support the provision of reliable
Customer confidence and trust products to customers as well as ongoing
are critical to TalkTalk's investment in and focus on security
business, and the Group's operating (see Data and Cyber Security Risk).
approach always seeks to do These factors have contributed to a
what is right for the customer. stable risk landscape with steady customer
However, as a value for money confidence and improving customer satisfaction.
connectivity provider in the In addition, TalkTalk continues to support
market, there is a risk that customers in dealing with the industry-wide
TalkTalk is perceived as a issue of scam calls. Initiatives such
'budget' provider, associated as the 'Beat the Scammers' campaign
with price rather than quality and Call Safe which are designed to
and service. help customers protect themselves from
Business and industry challenges the threat of scams. TalkTalk has also
including cyber threats, scam signed up to the Ofcom fairness charter
calls or poor customer experience which focuses on price transparency
also present a risk to brand and supporting vulnerable customers.
reputation and trust. TalkTalk will continue to focus on existing
Damage to customer trust and as well as new customers, guided by
our reputation could materially the four key principles we believe are
adversely impact our business, critical to being a value for money
attracting new customer, churn, connectivity provider - simplicity,
operations and financial condition. affordability, reliability and fairness.
------------------------------------ ------------------------------------------------
Competitive landscape
1 2 3 4 5 FY20 Gross risk remains broadly the same FY19 Gross risk
remains broadly the same
Risk and impact Mitigation
A clear pricing and promotional strategy
is in place with ongoing monitoring
of our pricing position and value proposition.
The strategy is reviewed to ensure it
remains competitive and continues to
support our position as a value for
money provider against the changing
competitor activity landscape. TalkTalk
Fixed Low Price Plans (FLPP) continue
to see strong customer take-up and TalkTalk
has outperformed the market on Fibre
and Ethernet growth, which is expected
to continue in the new financial year
TalkTalk is established as and further attractive customer offerings
a value for money connectivity are planned. FLPP offers both new and
provider in a highly competitive existing customers the opportunity to
market. lock in their price for the term of
Over the last year, significant their contract guaranteeing no mid-contract
competitor activity has continued price rises. The introduction of the
from both existing and new new industry leading Wi-Fi Hub in 2018
entrants to the market. The is still driving great improvements
future acceleration of FTTP in the customer experience and the Great
rollout may also drive more Connection Guarantee gives new customers
new entrants to the market confidence in switching to TalkTalk
which will further increase as they can leave within 30 days if
the competitive landscape. they are not happy with their new Fibre
However, at present, the competitive connection.
activity remains largely unchanged In addition, competitor pricing activity
with varying degrees of activity continues to be monitored to understand
in most product channels. Therefore, customer and market impact and plans
the risk that this competitive are revisited accordingly if necessary.
backdrop makes it difficult TalkTalk uses customer communications
for TalkTalk to maintain its to promote our simple, affordable, reliable
value position differentiation and fair message and is committed to
remains consistent with prior helping customers understand the best
year. positioned package to meet their needs.
------------------------------------- -----------------------------------------------
People capability
4 5 6 FY20 Gross risk remains broadly the same FY19 Gross risk has
increased
Risk and impact Mitigation
TalkTalk has established values which
act as a cultural framework and are
embedded through the business in recruitment
and performance management processes.
Structured talent forecasting and assessment
processes are in place to ensure required
talent is proactively understood and
actions plans are in place to actively
manage attrition risks and succession.
These processes also ensure a proactive
TalkTalk recognises employees review of the senior management level
as a key asset and aspires to ensure the right leadership is in
to be a 'Great Place to Work' place for motivating, inspiring and
for all colleagues. We understand leading the workforce to deliver on
the increasing challenges and the corporate objectives.
importance in the market of A people scorecard is in place for ongoing
defining an effective operating monitoring and oversight of people risk
model and attracting and retaining and, where required, actions to further
the right talent to deliver mitigate risk exposures are identified
organisational performance and implemented. In addition, Group-wide
and future growth aspirations. activities are carried out to assess
Throughout the year, the vast the level of employee engagement and
majority of our London roles insight gained is used to develop action
were successfully moved to plans to ensure a highly engaged and
a single main campus in the motivated workforce is maintained.
current Salford site to reduce Due to COVID-19, further measures have
operational complexity and been implemented to ensure the health
deliver a more efficient focused and safety of our workforce and customers
business. whilst we continue our provision of
The main focus continues to critical services. A specific charter
be attracting and retaining is in place which, along with enhanced
the required talent and competencies technical capabilities, has enabled
in a competitive local employment nearly all of our workforce to successfully
environment. Failure to do work from home. We are closely monitoring
so may negatively impact our any potential impacts on our workforce
ability to deliver on performance through regular surveys with specific
targets and strategic objectives. questions around our COVID-19 response.
COVID-19 has resulted in nearly Although the gross risk has been reduced
all our workforce working remotely as we successfully completed the relocation
which could lead to business of London roles to our main Salford
continuity, health and safety campus this is offset by the new COVID-19
issues. risks.
------------------------------------- ---------------------------------------------
Changing market structure
1 2 3 5 FY20 Gross risk remains broadly the same FY19 Gross risk
remains broadly the same
Risk and impact Mitigation
The Government and Ofcom are
committed to promoting investment
in Full Fibre networks through
infrastructure competition
in the UK telecommunications
market.
Government has sought to incentivise
network competition, through
the Future of Telecoms Infrastructure
Review (FTIR), which included
a range of measures to designed
to make it quicker, simpler
and cheaper for a range of
companies to build Full Fibre
networks. The FTIR complemented TalkTalk continues to be a vocal advocate
existing Government policy, of competition and is well placed to
including the Local Full Fibre benefit from an increasing trend towards
Networks Programme and the a more pro-competition regulatory framework.
work of Government's Barrier This poses a risk to incumbent players
Busting Unit. in the market, whilst presenting potentially
Since then, alternative networks valuable opportunities for challengers.
have secured significant investment The business is actively engaging with
and have extensive FTTP build the necessary external stakeholders,
ambitions, primarily across particularly Ofcom and Government, to
urban areas in the UK. share views and attempt to deliver the
The Conservative Party made best market and customer outcomes, as
a manifesto commitment to speed well as to proactively understand and
up nationwide gigabit capable respond to the opportunities and challenges
networks, with a target date presented by structural market changes.
of 2025. We expect to see further TalkTalk is well placed to benefit from
details for a plan to subside the transition to Full Fibre networks.
rural network build in the We are actively engaged with Openreach
coming months, with GBP5bn on product and service developments,
of funding available. including FTTP roll-out plans, in order
In light of Government's ambitions, to pursue favourable outcomes for TalkTalk.
Ofcom has proposed a considerably TalkTalk signed a wholesale agreement
different regulatory structure with CityFibre to connect customers
for the next review period onto their network in their roll-out
than the one which has been areas at a competitive price. This agreement
in place in the last decade, demonstrates how TalkTalk can benefit
with prices set above costs from increased network competition.
in urban areas to encourage We continue to discuss potential commercial
FTTP build by altnets, and arrangements with other FTTP network
a process of cross-subsidy owners.
proposed in rural areas to TalkTalk is currently engaging with
support Openreach FTTP rollout. Ofcom on its Wholesale Fixed Telecoms
These proposals, which are Market Review proposals, and will respond
due to come into effect from in due course to these proposals in
April 2021, are currently under order to attempt to achieve the most
consultation. appropriate outcomes from the review.
-------------------------------------- ---------------------------------------------
Regulatory compliance
1 2 3 FY20 Gross risk remains broadly the same FY19 Gross risk has
increased
Risk and impact Mitigation
The Group's Regulatory Compliance Committee,
The telecommunications sector a subcommittee of the Board, has continued
is highly regulated, with compliance to convene throughout the year to monitor
over key customer-focused regulations the mitigation of operational risks
monitored by the governing which could give rise to customer complaints
body, Ofcom. Another of the and regulatory breaches. The Group Legal
key governing bodies relevant Counsel and Company Secretary has chaired
to the Company is the Information weekly compliance meetings throughout
Commissioner's Office (ICO). the year, attended by senior management.
The regulations and laws that There are clear lines of accountability
TalkTalk must comply with, both in first-line operations and in
including Ofcom General Conditions our second-line assurance function and
and data legislation, are designed there has been continued focus on embedding
to support customers. processes and controls to maintain compliance
Although previous regulatory to industry regulations including focus
change risks around addressing on delivering improvements in our complaint
the General Data Protection handling processes and reducing complaint
Regulation (GDPR) and the automatic volumes.
compensation scheme have reduced Plans are also in place to deliver further
year on year, the need to implement regulatory changes which come into force
the enhanced consumer protection over the next twelve months to eighteen
requirements in the European months.
Electronic Communications Code TalkTalk has established structured
leads to a stable overall risk programmes to deliver changes resulting
assessment. from Ofcom's end-to-end review of its
Failure to comply with regulatory General Conditions. The progress of
obligations may result in negative this activity will be governed by the
customer impact and/or significant existing Compliance Committee to ensure
regulatory fines. effective delivery.
-------------------------------------- ----------------------------------------------
Data and cyber security
2 3 4 FY20 Gross risk has increased FY19 Gross risk remains broadly
the same
Risk and impact Mitigation
TalkTalk has continued to invest in
and focus on actively implementing an
ongoing programme to build and mature
its security capability, including to
address the increasing risks around
key third party vendors. Investment
is also planned to continue in the new
financial year and beyond leveraging
an updated Security Strategy centred
around five focus areas:
-- Governance, Risk and Compliance;
-- Protective Controls;
-- Vulnerability & Patch Management;
-- Visibility & Response Capabilities;
and
-- Network Resilience.
The strategy is underpinned by the widely
adopted NIST Cyber Security Framework
and is leveraged to continuously improve
the security maturity of the organisation.
This includes an annual security maturity
controls assessment by an independent
third party to validate the controls
that we've implemented and to provide
recommendations on the security roadmap
to help us prioritise our work.
Over the last four years significant
investment has been made in building
out a bigger security function and capability
including successfully establishing
Security of customer, commercial an in-house 24x7 Security Operations
and colleague data poses increasing Centre, which launched late 2017. During
reputational and financial subsequent years, further projects were
risk to all businesses and delivered to improve and mature our
the gross risk remains high. security control environment and capabilities.
In particular, cyber and data These activities and investments are
related threats and crime is supporting continuous improvement of
consistent with prior years security and the management of security
but this year we note an increased threats and risks
risk around key third party In addition, a robust governance structure
vendors that presents a significant remains in place with a PLC Security
challenge in terms of securing Committee meeting every two months.
data and systems against attack. This is a subcommittee of the Board,
TalkTalk receives most of its chaired by a Non-Executive Board member,
revenue through card transactions with the CEO and other senior executive
and like many businesses utilises representation. Furthermore, there is
third parties as part of doing a monthly Security Committee that is
business. TalkTalk recognises made up of senior management across
that failure to successfully all of key areas of the business to
secure data and systems against discuss the latest security threats
attack may have a material and risks, approve changes and manage
impact on brand reputation exceptions to security policies, and
and financial performance. ensure that security projects are managed
Other associated costs may effectively.
also be incurred, including In response to COVID-19, we have enhanced
potential regulatory fines. our well established information security
COVID-19 could see an increase controls and our Security Operations
in volume and scale of financially Centre has reduced the thresholds of
motivated cyber attacks. existing monitoring.
------------------------------------ -----------------------------------------------
Resilience and business continuity
1 2 3 4 6 FY20 Gross risk has increased FY19 Gross risk remains broadly
the same
Risk and impact Mitigation
Network resilience is assessed and monitored
TalkTalk is reliant on its on a regular basis and again, over the
infrastructure as well as key last year, TalkTalk has continued to
third party suppliers and partners deliver network analysis, improvements
in order to deliver quality and simplification at pace supporting
products and services to its greater resilience. Continuous monitoring
customers. Network, system of network availability is also in place
or third party failure could to ensure any issues are identified
result in significant disruption in a timely manner and resilience testing
to services or business processes, takes place. Where an incident does
which may have a negative impact occur, a robust incident response process
on customers and therefore is in place and exercised to ensure
damage customer loyalty or effective response, followed by a problem
result in complaints. It is management review that is linked to
therefore important to establish service improvement. The Group recognises
resilience in the network, that network resilience is also reliant
systems and also require resilience on Openreach for the last mile.
from our third parties and Other prioritised critical processes,
partners. systems and third parties are identified,
The approach adopted for supporting and business owners are assigned accountability
infrastructure and associated for assessing resilience and implementing
resilience, including use of business continuity plans to enable
third parties, is regularly continuity of operations in the event
reviewed to ensure an optimal of an incident. TalkTalk also continues
model is maintained which drives to invest in supporting appropriate
resilience and efficiency. resilience on critical systems which
There is a risk that changes will be a key focus for FY21 on a risk-based
to approach may not be delivered approach. For third parties, the relationship
effectively resulting in negative owners are assigned accountability for
impact to operations. requiring critical third parties to
It is also noted that in the have adequate business continuity plans
event of an incident, TalkTalk in place and obtaining third party assurance
must be able to respond in where appropriate that their plans have
an efficient and effective been reviewed and tested on a regular
manner in order to minimise basis.
impact on customers and performance. Due to COVID-19, further measures have
Due to COVID-19, there has been implemented to ensure the health
been a significant uplift in and safety of our workforce and customers
daytime data and voice traffic, whilst we successfully continue our
although peak traffic is still provision of critical services.
within usual demand. There We continue to focus on our network
is also an increased risk of resilience constantly monitoring our
business continuity issues network to forecast and respond to the
due to our workforce working ongoing demand, successfully maintaining
remotely. stability and minimising any congestion.
------------------------------------- ------------------------------------------------
Financial
1 2 3 4 5 6 FY20 Gross risk remains broadly the same FY19 Gross
risk has increased
Risk and impact Mitigation
The Group Treasury function is responsible
for managing the Group's liquid resources
and managing compliance with the terms
of funding agreements. Policies and
operating procedures are in place and
these are regularly reviewed to ensure
they remain appropriate for the business.
In addition, the Executive Committee
and the Board oversee the liquidity,
funding position and covenant compliance
of the Group on a regular basis and
are required to provide approval on
major funding decisions. The Group's
main financing facilities are typically
renewed 18 to 24 months before expiry
with new facilities based on the Group's
forecast cash flow requirements and
liquidity needs to ensure the Group
has sufficient available cash. The Group
Treasury function is also responsible
for managing foreign exchange and interest
rate risks in line with the Group's
policy.
The Group has recently renewed all of
its committed financing facilities which
has ensured a longer average tenor and
As with many organisations, provided it with a lower cost of financing
TalkTalk must actively manage going forward. In addition, the sale
its liquidity risk, ensuring of the Fibre Assets Business generated
the availability of sufficient over GBP200m of consideration providing
long term funding and the Group's greater headroom in the Group's facilities.
compliance with associated Whilst these developments have reduced
covenants and other terms of the liquidity risk of the Group, given
the funding arrangements. In the uncertainty arising from COVID-19,
addition the Group must manage the gross risk has been held stable
other financial risks such until the effects of the pandemic are
as foreign exchange, interest known with greater certainty or have
rate and credit risk. materially passed.
---------------------------------- --------------------------------------------
Change delivery and execution
1 2 3 4 6 FY20 Gross risk remains broadly the same FY19 Gross risk
has increased
Risk and impact Mitigation
A formal change framework is in place
for delivery of change projects which
helps ensure appropriate process and
governance is in place to drive successful
project delivery. The framework is intended
to ensure a desired level of quality
is reached throughout the lifecycle
of each project and has continued to
support successful delivery of key change
programmes.
The Group Change function remains a
key effective control for facilitating
prioritisation discussions to ensure
people and financial resources are 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
Delivery of performance and occurs at both the business unit leadership
strategic objectives and development team level and by the Executive Committee
of the business is reliant on a regular basis, enabling real-time
on the ability to successfully consideration of the potential impact
deliver innovation and other of other operational and strategic activities
operational changes required on change projects.
to support growth and performance. The gross risk has been reduced due
Failure to effectively deliver to the organisational re-set in which
significant change programmes TalkTalk has aimed for further simplification
and associated benefits critical by concentrating on fewer, more focused
to TalkTalk's strategy would initiatives to support delivery of simplified,
result in an inability to deliver clear strategic objectives. However,
performance objectives and this reduction is somewhat off-set by
limit TalkTalk's competitive the potential impacts of COVID-19 on
position in the market. the delivery of change due to financial
COVID-19 impacts could result and operational constraints. The change
in financial and operational plan is being closely reviewed and monitored
constraints impacting the delivery by the Executive Committee to manage
of change. any COVID-19 impacts.
------------------------------------- -------------------------------------------------
Emerging Risks
As with other companies, TalkTalk faces emerging risks and
uncertainties that could potentially be significant to our
long-term strategy but cannot be fully defined or managed at
present.
The Executive Committee meets regularly to review both the
currently identified risks and emerging risks which inform our
strategic planning process and is reviewed by the Board. For
example, emerging risks around the long-term implications of Brexit
and climate change have been identified and are being
monitored.
Brexit
The UK Government has been considering how Brexit will impact
the future of telecoms regulation in the UK and final decisions
will be subject to terms of the UK's future relationship with the
EU. It is assessed that the Group has limited direct exposure to
Brexit as it only provides services within the UK, has limited
non-UK suppliers and contingency plans are in place for identified
risks. Whilst a no-deal Brexit will likely affect business/consumer
confidence and potentially drive customer churn across the wider
market, the Group considers demand for our products would continue
and as the largest value provider in the UK it may further enhance
our relevance to customers.
However, the longer-term potential implications of a new
relationship with the EU will depend on the outcome of the current
trade negotiations and cannot be reliably identified at
present.
In response, we continue to monitor and work closely with the
Government and Ofcom and have attended several Government-led
forums and hence, are well placed for early identification of any
related risks.
Climate Change
Long-term climate change and environmental impacts may result in
risks due to changes in UK market behaviours and government actions
which cannot be fully defined. For example:
-- Increased severity and frequency of extreme weather could
significantly impact our operations and our ability to service our
customers on-site; and
-- Customer demand for more environmentally responsible products
and government policy changes around end-of-life product
obligations could lead to significant changes and costs to our
operations.
Our response includes reducing our CO per gigabit of bandwidth
by 80% since 2010 and changing company car policy whereby all
provided fleet vehicles must be petrol, hybrid or electric. We also
used a 'cradle to cradle' lifecycle approach to developing our
award-winning Wi-Fi Hub, examining how the product was created,
ensuring that it was built to last, before being either re-used
and/or recycled efficiently - see page 38 for further details.
We continue to actively review our operations to identify
further improvements to protect the environment.
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END
NOAGPUCWQUPUGGB
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June 19, 2020 07:37 ET (11:37 GMT)
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