- Organic customer growth of 14.1%
- Full year dividend up 3p to 83p
- Shares up 19% over the past year
Shares in Telecom Plus (TEP) were up over 2% to £19.20 in morning trading as the multi-utility supplier reported an adjusted pre-tax profit of £116.9 million, up 21.5% for the full year ending 31 March 2024, slightly above market expectations.
The company said it continued to perform strongly against the backdrop of a ‘normalised’ energy market and passed a million customers in the fourth quarter.
The ‘asset light’ business expects customer numbers to continue to grow saying ‘we are confident of delivering organic net customer growth between 12% to 14% in full year 2025.’
The company, which offers insurance, broadband and energy services under the Utility Warehouse brand said over the medium term it is confident of doubling the business to two million customers.
The company also reported a 38% increase in the number of insurance policies to 139,109 for the full year ending 31 March 2024.
POSITIVE NEWS FOR SHAREHOLDERS
Shareholders were rewarded for the uptick in full year adjusted pre-tax profit with a rise of 3p in the full year dividend to 83p.
Year-to-date the shares are up 22%.
Co-CEO, Stuart Burnett told Shares the company has helped customers throughout the cost-of-living crisis not only through competitive pricing but by giving households the opportunity of an additional income by recommending Utility Warehouse to their friends and family.
Partner numbers increased by 14.1% to 68,251 for the year ending 31 March 2024 compared to 59,824 in 2023.
Burnett said the company’s ‘unique multi-service model’ has helped to provide market-leading savings as families across the UK still face inflationary pressures and energy prices remain high.
Adjusted pre-tax profit for the full year 2025 is expected to be between £124 million to £128 million with excess capital returned to shareholders through a combination of dividends and share buybacks.
EXPERT VIEW
Research firm Megabuyte analyst Shekhan Ali notes: ‘The latest results from Telecom Plus flag more positive noises, with the business highlighting strength in a multi-utility offering not only in the face of a cost-of-living crisis but also in a tough regulatory backdrop for energy (capped pricing and profit per customer metrics), in particular, balancing margin constraints in energy with high margin services in mobile, broadband and cashback card.
On the cash front, the operating outflow certainly isn’t a positive story with an outflow representing a massive drain on cash, but may be rationalised due to the timing of payments, although, more likely being the high cost of growth – with the dividend doing its job in taming investor sentiment as they reacted positively to the update.’
