TIDMTEP
RNS Number : 9170T
Telecom Plus PLC
10 October 2014
TELECOM PLUS PLC
Half Year Trading Statement
Telecom Plus PLC (trading as the Utility Warehouse), which
supplies a wide range of utility services (gas, electricity, fixed
line telephony, mobile telephony and broadband) to both residential
and business customers, is today issuing a trading update in
advance of its half year results for the period ended 30 September
2014.
Highlights:
-- Continuing strong organic growth
-- Performance in line with market expectations for the full year
-- Customer numbers up by 34,733 to 565,372
-- Service numbers up by 126,537 to 2,033,697
-- Appointment of new Finance Director
Trading update
As we reported in our Interim Management Statement on 15 July
2014, the first quarter of the financial year saw strong organic
growth in both customer (+16,739) and service (+56,574) numbers. We
are delighted that this momentum accelerated during the second
quarter, with customer numbers up by 17,994 and service numbers up
by 69,963 representing annualised growth rates of 13% and 14%
respectively.
Combining these figures, our customer numbers for the half-year
rose by 34,733 (2014: 33,908) demonstrating a continuation of the
strong organic growth we achieved last year. This takes our total
customer base to 565,372 (31 March 2014: 530,639), and keeps us on
track to achieve our growth target of around 70,000 customers for
the full year.
It is particularly satisfying to have achieved this strong
organic growth during a period when smaller independent suppliers
have enjoyed such a significant short-term pricing advantage due to
a combination of falling wholesale energy prices and their not
being required to make a full contribution towards certain social
and environmental charges. We anticipate that this gap will narrow
over the coming year.
Underlying churn has continued to fall, reflecting the steady
and continuing improvement in the quality of our customer base.
This has been underpinned by our ongoing focus on delivering
exceptional customer service.
We remain committed to delivering the best value in the market
through a unique combination of savings, simplicity and service,
and are delighted that the sustained progress we have made in
achieving this continues to be endorsed by Which? who has recently
recognised us once again as the UK's Best Phone and Broadband
Provider. In addition we have been recognised by Moneywise in their
latest survey as the UK's Best Energy Provider for both Value for
Money and Customer Service, building on the Most Trusted Broadband
Supplier and Best Broadband Customer Service awards we received
from them in the Spring.
We anticipate that our half yearly report will show adjusted
pre-tax profit and earnings per share that are significantly ahead
of the figures for the comparable period last year, leaving the
Board comfortable (subject to unforeseen circumstances) with full
year market expectations that adjusted pre-tax profit will increase
by almost 50% to GBP63m. Shareholders can also expect a 19%
increase in our interim dividend payment to 19p per share,
reflecting the Board's confidence in the outlook for the full year,
and the Board confirms that shareholders can look forward to
continuing progressive growth in the level of our dividend
payments.
Cash flow
Cash generation during the period has remained strong. For the
full year, our net debt is expected to increase by about GBP10
million in line with previous guidance as we complete the GBP20
million refurbishment of our new headquarters office building.
Operating update
Partner recruitment remains steady, with the total number of
Partners increasing by over 2,000 during the last six months to a
new record of 46,570, boosted by an introductory offer that we ran
during April.
On 14 and 15 September we held motivational sales conferences in
Aintree and Cheltenham. Both venues were packed to capacity, with a
total attendance of around 5,000 Partners spread across the two
days. The atmosphere was extremely positive reflecting recent
strong levels of activity within the channel (both in relation to
customer gathering and recruitment of new Partners), and we took
advantage of the high turnout to launch a number of incremental
improvements to the way new Partners are trained. These changes are
designed to harness their initial high levels of enthusiasm, and
help ensure their new business gets off to the best possible
start.
We continue to make good progress with the refurbishment of our
new 130,000 sq ft headquarters office building in north-west
London, and anticipate taking occupation early in the New Year.
This is expected to provide sufficient accommodation to meet our
growing business needs for the foreseeable future.
Regulatory Update
The CMA has recently commenced its enquiry into the retail
energy markets. While this is creating additional short-term work
as we comply with their extensive requests for data, we believe
that as one of the leading 'challenger' brands it is unlikely any
remedies they might impose in due course will have a material
adverse impact on our business - if anything, the reverse is more
likely to be the case. And although the energy market currently
faces considerable political uncertainty, the structure of our
long-term supply arrangements with npower should insulate us from
any gross margin pressure in the event an energy price freeze is
implemented following the forthcoming general election.
We have not yet started to see any material benefit from the
changes to supplier licences following Ofgem's Retail Market Review
last year, in particular the anticipated narrowing of the gap
between suppliers' standard variable and discounted introductory
fixed term tariffs. It is unclear whether this is due to customers
failing to read and understand their bills, or simply reflects the
fact that many customers only receive a bill on a quarterly or
annual basis, but we would expect Ofgem to take further action in
due course unless the desired changes in customer behaviour start
to become more evident.
Appointment of new Finance Director
We are pleased to announce that Nick Schoenfeld will join the
Board as Chief Financial Officer in the New Year.
Since 2006, Nick has been Group Finance Director of Hanover
Acceptances, a substantial diversified private company with
holdings in the food manufacturing, real estate, and agri-business
sectors. He was previously employed at Kingfisher plc, where he was
responsible for the group's financial planning and analysis
functions. Prior to this, he held senior strategic and development
roles within Castorama and the Walt Disney Company, having started
his career as a management consultant at the Boston Consulting
Group. Nick also has an MBA from the Harvard Business School, and
is a member of the supervisory board of Refresco Gerber B.V, the
leading European bottler of soft drinks and fruit juices for
retailers and branded players.
No information is required to be disclosed pursuant to Listing
Rule 9.6.13R.
Notice of Half Year Results
Our half year results for the six months ended 30 September 2014
will be announced on Wednesday 19 November 2014.
Commenting on current trading, Andrew Lindsay, Chief Executive
said:
"I am pleased with the continued healthy organic growth we have
seen in customer and service numbers during the first half of the
year; we are confident that we can build upon this strong
performance and look forward to announcing record half yearly
results in November."
"I am delighted to be welcoming Nick to the Board of Telecom
Plus in the New Year, and look forward to leveraging his financial
and strategic expertise in the consumer-focused arena to build on
the existing strong momentum within the business"
"With a UK market share of less than 2%, and a unique approach
to the way we attract and look after our customers, we face the
future with considerable confidence."
For more information please contact:
Telecom Plus PLC
Andrew Lindsay, Chief Executive 020 8955 5000
Peel Hunt
Richard Kauffer / Dan Webster 020 7418 8900
MHP Communications
Reg Hoare / Katie Hunt / Giles Robinson 020 3128 8100
About Telecom Plus PLC:
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 bill,
consistently good value across all their utilities and exceptional
levels of customer service. The Company does not advertise, relying
instead on "word of mouth" recommendation by existing satisfied
customers in order to grow its market share.
Telecom Plus holds a significant minority stake (20%) in Opus
Energy plc, the leading independent energy supplier to the SME and
corporate business markets. It also has a wholly owned subsidiary
called TML purchased in 2002, which supplies predominantly fixed
line telephony to small and medium sized business customers through
a network of authorised resellers and dealers.
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
TSTFSDFDUFLSELS
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