Shares in TalkTalk plunged as much as 17% early on Wednesday (10 May), after the broadband provider issued a profit warning and cut its full-year dividend.

In the year to the end of March, total revenues slid 3% year-on-year to £1.78bn ($2.3bn), while headline earnings before interest, tax, depreciation and amortisation (EBITDA) rose 17% to £304m. Both figures, however, fell short of expectations and EBITDA were lower than a figure in the £320m-£360m range the company had anticipated.

Statutory profit before tax, however, surged to £70m from the prior year's £14m, with statutory earnings per share up to 6.1p from 0.2p.

Founder and newly-appointed executive chairman Charles Dunstone, who took back the reins of the company when former chief executive Dido Harding resigned after a seven-year stint, said the company will cut its dividend by 27% to 7.5p in the current year.

The decision, Dunstone said, was motivated by the need to focus on growth and cash generation to offset an expected decline in profit in the coming year.

"My focus for the company is growth, cash generation and profit – in that order. We will be smart about how we invest, focusing on our fixed network, avoiding other capital intensive distractions," he said.

"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."

TalkTalk's founder, however, said new price plans and higher customer retention rate suggested the company was moving in the right direction and he expected dividend growth to resume once the business returns to earnings growth.

Tristia Harrison, who replaced Harding as CEO, added the past 12 months have seen the business lay down solid foundations for revenue growth in both the retail and B2B businesses.

"This will allow us to build upon our core strength as a value for money fixed line connectivity provider as we focus on delivering growth and improving our customers' experience," she said.