CPW Carphone

LONDON—TalkTalk Telecom Group PLC shares soared Wednesday after the U.K. telecommunications group increased its half-year dividend, despite detailing a cost hit of over $50 million for last month's cyberattack.

The company said it is on track to meet its fiscal 2016 expectations set before the cyberattack, which the company said could cost up to £ 35 million ($53.1 million), including a revenue impact from the loss of online sales.

TalkTalk revealed the potential cost of the security breach, that sent its stock reeling, as it swung to a half-year loss due to higher costs. For the six months ended Sept. 30, the company recorded a net loss of £ 7 million, compared with net profit of £ 15 million in the year-earlier period.

Revenue rose 5.9% in the second quarter, up from 3.5% growth in the previous three months. It posted 4.7% revenue growth in the first half.

"We have delivered half-year results in line with our plan and revenue growth accelerated strongly through the second quarter. We have a robust plan to deliver a significant step-up in profits in the second half," Chief Executive Dido Harding said.

The company raised its interim dividend by 15% to 5.3 pence.

At 1105 GMT, shares rose 10.3% to 240 pence, valuing the company at £ 2.08 billion.

TalkTalk's update reflects the company's resilience despite the fallout from the cyberattack, said Barclays analyst Maurice Patrick. The broker cut its target price to 400 pence from 500 pence, but reiterated an overweight rating.

"The recent de-rating since the cyberattack has resulted in TalkTalk now looking inexpensive versus peers," Mr. Patrick said, adding the company should see a material upside from its mobile operations as it builds out bundled telephony and media offers.

Last week, TalkTalk said 4% of its customers had their personal details accessed in October's cyberattack, claiming the extent of the incident is smaller than it originally thought.

At first, the company said the breach of its website was "significant and sustained," adding that in the "worst-case scenario," information on all of its 4 million customers may have been accessed.

Four people have been arrested following the attack, including teenagers.

London-based TalkTalk has been attacked by hackers a few times. In February, TalkTalk said that criminals breached its security systems and obtained customers' personal data by impersonating sales staff. And in August, the company said that criminals obtained data by attacking the computer servers of cellphone retailer Carphone Warehouse, now Dixons Carphone PLC.

Write to Simon Zekaria at simon.zekaria@wsj.com and Razak Musah Baba at Razak.Baba@wsj.com

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(END) Dow Jones Newswires

November 11, 2015 07:55 ET (12:55 GMT)

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