TIDMTEP
RNS Number : 5675V
Telecom Plus PLC
19 April 2016
19 April 2016
Telecom Plus PLC
Trading Update and Notice of Results
Telecom Plus PLC (trading as the Utility Warehouse), which
supplies a wide range of utility services to both residential and
business customers, today issues a trading update for its financial
year ending 31 March 2016.
Highlights
-- Confident of achieving full-year adjusted pre-tax profits of
at least GBP54m in line with previous guidance
-- Total dividend guidance for the year of 46p remains unchanged
-- Continuing growth in customer and service numbers
-- Ranked #2 in major multi-industry customer satisfaction survey
Financial
We are pleased to confirm that notwithstanding the challenges
posed by continued falling energy prices, we are confident of
reporting adjusted pre-tax profits for the current financial year
of at least GBP54m, in line with previous guidance.
Cash flow remains strong, in line with management expectations,
and we have taken the opportunity to refinance on more favourable
terms.
Growth
In the face of continuing strong headwinds, we are pleased to
have delivered organic growth of 4.2% in service numbers during the
last 12 months, taking the total number of services we are
supplying through our Utility Warehouse brand to 2,181,704 (2015:
2,093,447); membership increased by 17,100 to 598,613.
Whilst this growth was below the level we originally
anticipated, it has been achieved against a background of a rising
gap between standard variable energy tariffs and the cheapest fixed
term introductory deals available over the course of last year.
This was caused by a combination of factors including further
deflation in wholesale commodity prices, rising policy costs
(including smart meters) and increasingly aggressive collective
switching initiatives. We are pleased to note that over the last
few weeks this gap has narrowed slightly, following recent
industry-wide price reductions to standard variable tariffs.
Our annual sales conference took place on 19/20 March, and was
attended by over 6,000 Partners and guests. The focus was on making
our 'Double Gold' bundle (where new Members switch their Energy,
Landline, Broadband and Mobile to us) easier for them to promote.
We also announced a new 'refer-a-friend' scheme.
Project Daffodil (the new benefit we announced in the autumn of
supplying and fitting low-energy LED light bulbs free of charge for
'Double Gold' Members) is gathering momentum, with over 300,000
bulbs already installed throughout the UK. Our Partners have
embraced this initiative, leading to a significant further
improvement in customer quality: the proportion of new Members they
are signing up who have switched all their services to us is now
running at over 50%. If this trend continues, we expect it to
deliver a modest increase in our service growth rate over the
course of the coming year.
Customer Satisfaction
We were delighted that our commitment to being the Nation's most
trusted utility supplier was publicly recognised in a recent survey
published by the UK Institute for Customer Service, when we
achieved second place just behind Amazon, and ahead of other
leading brands such as John Lewis, First Direct and M&S. No
other utility supplier was ranked in the Top 30.
Dividend
In line with previous guidance, the Company intends to pay a
total dividend per share for the year just ended of 46p,
representing an increase of 15% compared with the prior year. The
final dividend of 24p is expected to be paid on 29 July 2016,
subject to shareholder approval at the AGM which will be held on 22
July 2016.
Consistent with our progressive dividend policy, the total
dividend for next year is expected to reflect our growth in
adjusted earnings per share for the period.
Competition and Markets Authority ('CMA') investigation into the
Energy Industry
We welcome the CMA's draft proposals to remove the current
restrictions on discounts, bundling, and the number of tariffs each
supplier can offer. This will significantly increase our
flexibility to offer an attractive choice of packages as we expand
our existing range of services in future.
However, we were disappointed that the CMA did not propose more
radical initiatives to address the widespread practice within the
market by other suppliers of offering new customers attractive
introductory deals, at the expense of the vast majority of their
customer base who pay significantly higher prices on a standard
variable tariff; this was a missed opportunity to create a fairer
energy market for consumers, by protecting those who (for whatever
reasons) choose not to engage with the energy market on a regular
basis.
Outlook and Final Results Date
We have a clear strategy to deliver continued high quality
growth, albeit at modest levels for as long as the current
headwinds continue. Thereafter, and once the gap between standard
variable energy tariffs and cheaper introductory tariffs reduces to
a more normal level, we expect the investment we are making in
enhancing the quality of our membership base to generate healthy
returns, and growth to start returning towards the higher levels we
have historically achieved.
Over the course of the new financial year, we anticipate that
all the key operational and financial metrics for the business
(revenues, services, customers, adjusted earnings & dividends)
will continue to show further progress, and look forward to
providing more detailed guidance with the announcement of our full
year results on 14 June 2016.
For more information please contact:
Telecom Plus PLC
Andrew Lindsay, CEO 020 8955 5000
Nick Schoenfeld, CFO
Peel Hunt
Dan Webster / Jock Maxwell Macdonald 020 7418 8900
JP Morgan Cazenove
Christopher Wood / Hugo Baring 020 7742 4000
MHP Communications
Reg Hoare / Katie Hunt / Giles Robinson 020 3128 8100
About Telecom Plus PLC ('Telecom Plus'): www.utilitywarehouse.co.uk
Telecom Plus, which owns and operates the Utility Warehouse
brand, is the UK's only fully integrated provider of a wide range
of competitively priced utility services spanning both the
Communications and Energy markets.
Customers benefit from the convenience of a single monthly
statement, consistently good value across all their utilities and
exceptional levels of customer service. Telecom Plus does not
advertise, relying instead on 'word of mouth' recommendation by
existing satisfied customers and distributors in order to grow its
market share.
Telecom Plus also has a 20% shareholding in Opus Energy Group
Ltd, a successful, profitable and fast growing independent supplier
of Gas and Electricity to small, medium and large business
customers.
Telecom Plus is listed on the London Stock Exchange (Ticker: TEP
LN). For further information please visit:
www.telecomplus.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCAKFDQOBKDAQD
(END) Dow Jones Newswires
April 19, 2016 02:00 ET (06:00 GMT)
Telecom Plus (LSE:TEP)
Historical Stock Chart
From Apr 2024 to May 2024
Telecom Plus (LSE:TEP)
Historical Stock Chart
From May 2023 to May 2024