- Full-year results to be 'materially' ahead of expectations
- Annualised customer growth rate of 24%
- First-half results to come on 22 November
Multi-utility supplier Telecom Plus (TEP) helped arrest a recent slide in its share price in some style as it guided for full-year results to be materially above expectations.
The company which offers insurance, broadband and energy services under the Utility Warehouse brand, gained 17% to £20.15 as the upgrade accompanied a buoyant trading update for the six months to 30 September 2022.
Organic growth accelerated in the period, with new customers driven to Utility Warehouse as they looked to save on their bills. An annualised growth rate in customer numbers of 24%, with a total customer base of 814,684, is in line with the internal target to add one million additional customers in the next four to five years.
The better-than-expected performance for the 12 months to 30 April 2023 is being driven by both this stronger customer growth, a reduction in the cost of multi-service discounts during the second half and what the company describes as ‘an improved outlook for energy affordability’ resulting from the newly announced £2,500 price guarantee.
‘UNIQUE’ POSITIONING
Co-CEOs Andrew Lindsay and Stuart Burnett commented: ‘Our unique multi-service proposition enables us to offer households savings on their energy bill of up to £125 a year below the new energy price guarantee, sustainably and profitably, underpinning our long-term strong competitive position.
‘At a time when cost of living pressures continue to rise, we are uniquely positioned to offer households what they need now more than ever: savings on their essential bills and an extra income from recommending these savings to their friends and family.’
First-half results are expected on 22 November. AJ Bell investment director Russ Mould commented: ‘The utilities market has been a tough place in 2022 if you’re not one of the big operators but Telecom Plus has managed to forge a path to growth, helped by weaker rivals falling by the wayside.
‘The company’s Utility Warehouse brand has chimed with hard-pressed households - offering bundled energy, broadband and insurance services at attractive prices (at least in relative terms).
‘Buying energy in the wholesale market could still be a challenge in the coming months with a cold winter expected but Telecom Plus has demonstrated its ability to survive and thrive so far this year, helping to give investors at least some confidence in the forward outlook.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author (Tom Sieber) and editor (James Crux) of this article own shares in AJ Bell.
