TIDMTEP
RNS Number : 7589P
Telecom Plus PLC
22 November 2016
Embargoed until 0700 22 November 2016
Telecom Plus PLC
Half-Year Results for the Six Months ended 30 September 2016
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, today announces its half-year results for
the six months ended 30 September 2016.
Financial highlights:
-- Revenue down 0.9% to GBP291.3m (2015: GBP294.0m) due to
warmer weather and lower gas prices
-- Adjusted profit before tax up 11.4% to GBP25.1m (2015:
GBP22.5m); statutory GBP18.7m (2015: GBP15.2m)
-- Adjusted earnings per share up 10.3% to 25.6p (2015: 23.2p); statutory 17.8p (2015: 14.3p)
-- Interim dividend increased by 4.5% to 23p per share (2015: 22p)
-- Adjusted full-year pre-tax profits are expected to be towards
the upper-end of our indicated GBP55m to GBP59m range
Operating highlights:
-- Further organic growth in line with previous guidance
-- Total services supplied up by 52,037 for the period to 2,233,741 (2015: 2,146,935)
-- Customer ("Member") numbers for the period up by 5,450 to 604,063 (2015: 595,098)
-- Gap between introductory fixed term energy deals and standard tariffs starting to narrow
-- Over 1 million LED light bulbs installed free of charge under Project Daffodil
Commenting on today's results, Andrew Lindsay, Chief Executive,
said:
"The business continues to perform in line with our expectations
and I am pleased that the number of members and services we supply
both reached record levels during the period.
"We believe our route to market continues to give us a
significant long term competitive advantage, enabling us to target
high quality customers who would not otherwise be engaged in the
market, and to effectively communicate the savings, simplicity and
service provided by our unique integrated multi-utility
proposition. This is in stark contrast to other independent energy
suppliers who face an increasingly challenging environment.
"We welcome the recent significant narrowing of the gap between
the introductory energy deals offered to customers on price
comparison sites, and the price paid by the vast majority of
customers on standard variable tariffs; this will result in a
fairer energy market for consumers, and should lead to greater
confidence amongst our Partners and, in due course, a return
towards the higher levels of organic growth we have previously
achieved."
For more information, please contact:
Telecom Plus PLC
Andrew Lindsay, Chief
Executive 020 8955 5000
Nick Schoenfeld, Chief
Financial Officer
Peel Hunt
Dan Webster / Jock Maxwell
Macdonald 020 7418 8900
JPMorgan Cazenove
Hugo Baring / Chris
Wood 020 7742 4000
MHP Communications
Reg Hoare / Katie Hunt
/ Giles Robinson 020 3128 8156
Notes:
This announcement contains inside information.
Analyst presentation
Telecom Plus will host an analyst presentation at 8.45 for 9.00
a.m. today at Peel Hunt's offices, Moor House, 120 London Wall,
London, EC2Y 5ET. Please contact MHP Communications for details at
telecomplus@mhpc.com
About Telecom Plus PLC ('Telecom Plus'):
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 ("Members") and a network of over 45,000 part-time
authorised distributors ("Partners") in order to grow its market
share.
Telecom Plus holds a significant minority stake (20%) in Opus
Energy Group Limited, the leading independent energy supplier to
the SME and corporate business markets.
Telecom Plus is listed on the London Stock Exchange (Ticker: TEP
LN). For further information please visit:
www.utilitywarehouse.co.uk.
Interim Management Report
Financial and Operating Review
Results
Adjusted______ Statutory________
Half year to 30 2016 2015 Change 2016 2015 Change
September
Revenue 291,312 294,035 (0.9)% 291,312 294,035 (0.9)%
Profit before tax 25,063 22,495 11.4% 18,665 15,240 22.5%
Basic earnings
(per share) 25.6p 23.2p 10.3% 17.8p 14.3p 24.5%
Interim dividend
(per share) 23.0p 22.0p 4.5% 23.0p 22.0p 4.5%
In order to provide a clearer understanding of the underlying
trading performance of the Group, adjusted profit before tax and
adjusted basic EPS exclude: (i) share incentive scheme charges; and
(ii) the amortisation of intangible assets arising on entering into
the new energy supply arrangements with npower in December 2013.
The amortisation of intangible assets and share incentive scheme
charges have been excluded on the basis that they represent
non-cash accounting charges that do not impact the amount of
profits available for distribution to shareholders. These balances
can be derived directly from amounts shown separately on the face
of the condensed consolidated interim statement of comprehensive
income.
The performance of the business during the first half of the
financial year was pleasing. Adjusted profit before tax increased
by 11.4% to GBP25.1m (2015: GBP22.5m) on slightly lower revenues of
GBP291.3m (2015: GBP294.0m), and adjusted earnings per share
increased by 10.3% to 25.6p (2015: 23.2p). Statutory profit before
tax increased by 22.5% to GBP18.7m (2015: GBP15.2m), after
intangible amortisation of GBP5.6m (2015: GBP5.6m) and share
incentive scheme charges of GBP0.7m (2015: GBP1.6m).
The small reduction in revenue reflects lower average energy
charges due to unusually warm weather during the spring and summer
months (compared with seasonally normal weather last year), a
continuing improvement in household energy efficiency, and a modest
reduction in domestic standard variable gas prices from 1 April
2016, partially offset by continuing steady organic growth in the
number of customers and services we supply.
Gross margin for the period increased to 21.1% (2015: 19.5%).
This reflects both a changing sales mix, where energy (which has a
relatively low gross margin) accounted for a smaller proportion of
total revenue due to the factors referred to above, and a GBP4.2m
recovery of previously incurred costs relating to the smart meter
rollout programme under our energy supply agreement. We expect to
reinvest some of this recovery (of which 70% was credited to cost
of sales with the remaining 30% credited to administrative
expenses) in growth initiatives over the remainder of the year.
The loss in our Customer Acquisition segment increased by
GBP3.1m, largely reflecting costs associated with Project Daffodil,
our innovative free LED light bulb replacement service, which was
launched last autumn.
We maintained our track record for organic growth during the
half-year, with the number of customers and services increasing by
5,450 (2015: 13,585) and 52,037 (2015: 53,488) respectively, in
line with previous guidance. This took our total membership base to
604,063 (31 March 2016: 598,613) and the number of services we are
providing to 2,233,741 (31 March 2016: 2,181,704). The relatively
strong service growth demonstrates the appeal of Project Daffodil,
which is only available to members taking all their utilities from
us; as a result of this initiative, the proportion of our
membership base who are taking all five core services from us (gas,
electricity, home phone, broadband and mobile) has increased from
11.7% to 15.8% over the last 12 months.
The competitive environment remained challenging, with the
majority of energy suppliers continuing to offer heavily discounted
short-term fixed price tariffs to attract new customers; these
discounts reached record levels during the period, which led to a
small increase in our energy churn, although they have recently
started to narrow. In the broadband market all the major telecoms
companies continued to promote aggressive free and discounted
services to new customers, and we therefore welcome the recent
initiative by the Advertising Standards Authority to make
advertising these introductory broadband deals more transparent (by
requiring them to include all unavoidable charges, such as line
rental, within the headline price).
We remain committed to the position we adopted in March 2015 of
not offering discounts or benefits to new customers which are not
also available to existing loyal members. We believe this fairer
approach, where both new and existing Members pay exactly the same
prices for identical packages, combined with the wider range of
benefits and consistently good value we offer, will create
significantly greater shareholder value over the medium term
through lower churn and longer average customer lifetimes.
Our ongoing focus on the quality of our customer base and
investment in providing best-in-class customer service from our
UK-based call centre, mean that churn, bad debt and delinquency
levels have all remained low.
We continue to receive recognition from both Which? and
Moneywise for the quality of our customer service and the
consistently good value we offer, and we are pleased that our Net
Promoter Score remains high. These are valuable endorsements of the
commitment and hard work of all our employees and Partners, and
demonstrate the progress we continue to make towards our goal of
being the Nation's most trusted utility supplier.
Costs
Distribution expenses increased by GBP0.8m to GBP10.7m (2015:
GBP9.9m) due mainly to higher Partner incentive costs compared with
the same period last year, and an increase in the amount of
commission payable on our growing customer base.
Overall administrative expenses before amortisation rose by
GBP0.2m to GBP26.1m (2015: GBP25.9m) reflecting continued growth in
the number of services we are providing and planned higher IT
costs, partially offset by an improvement in our bad debt charge
which has fallen to around 1.2% of turnover (2015: 1.5%), and by
the recovery of previously incurred smart meter rollout costs
mentioned above. We continue to invest in growing head count
throughout the Company to ensure we maintain our current high
standards of customer service as the business grows, and to further
strengthen our senior management team.
Route to market
Interest in the business opportunity we offer remains high, with
the total number of Partners remaining broadly stable at around
45,000 during the period. On average, around 600-800 new Partners
join us each month, although these tend to be broadly offset by the
number of inactive Partners who allow their positions to lapse.
On 10 and 11 September we held motivational sales conferences in
Sheffield and Cheltenham respectively; both venues were
well-attended, with around 5,000 Partners joining us across the two
days. Important announcements included a mechanism to enable new
Partners to try our business opportunity on a risk-free basis, a
planned Partner trial of our forthcoming new Home Insurance
service, and the commercial launch of an upgraded 4G mobile
service; these were well received by those present.
We believe our route to market continues to give us a
significant competitive advantage, enabling us to target high
quality customers who would not otherwise be engaged in the market,
and to effectively communicate the savings, simplicity and service
provided by our unique integrated multi-utility proposition
(together with all the other benefits of being part of our discount
club) to prospective new Members.
Our Car Plan remains extremely popular, with approaching 900 of
our more dynamic Partners having taken delivery of a Utility
Warehouse branded BMW Mini; many of these now display the new
simplified branding we launched around 12 months ago.
Opus Energy Group Limited ("Opus")
Opus, the UK's leading independent supplier of energy to
business users in which we hold a 20% shareholding, continues to
make strong progress in building its market share, with the number
of electricity and gas sites it supplies rising to 243,072 (2015:
206,679) and 50,651 (2015: 39,372) respectively. This represents a
combined increase of 19.4% on the previous year.
Our share of Opus profits for the first half has fallen to
GBP832,000 (2015: GBP1,754,000) mainly due to the removal in July
2015 of the exemption from Climate Change Levy ('CCL') for business
customers supplied with European renewable power; underlying
margins remained broadly unchanged. Full year profits are expected
to be broadly in line with the results for last year, following
consistent organic growth in the number of services provided.
In response to press speculation, we issued an announcement on
18 August 2016 which confirmed that the Board of Opus was assessing
strategic options for the future of the business (which could
include a sale); we understand that this process remains
ongoing.
Partner, Customer and Service Numbers
H1 H1
FY 2017 FY2016 FY 2016
---------- ---------- ----------
Partners 45,189 45,808 46,542
Customers
Residential Club 574,780 568,986 565,061
Business Club 29,283 29,627 30,037
Total 604,063 598,613 595,098
Services
Electricity 546,315 542,430 539,070
Gas 442,572 440,872 440,548
Fixed Telephony
(calls) 312,373 306,087 303,832
Fixed Telephony
(line rental) 294,497 286,763 282,918
Broadband 265,809 256,777 251,120
Mobile 187,103 169,136 155,375
CashBack card 185,072 179,639 174,072
Total 2,233,741 2,181,704 2,146,935
Residential Club 2,149,374 2,096,730 2,061,369
Business Club 84,367 84,974 85,566
Total 2,233,741 2,181,704 2,146,935
The table above excludes the customer and service numbers of
TML.
Cash Flow and Dividend
Our operating cash flow fell to GBP15.8m (2015: GBP21.5m),
following an expected GBP10.3m working capital outflow in the
period. Capital expenditure of GBP2.6m (2015: GBP2.2m) was focused
on our continuing IT development plans. Notwithstanding the working
capital outflow, continued strong underlying cash generation meant
that net debt increased only marginally during the period to
GBP57.7m (31 March 2016: GBP56.3m); this net debt figure includes
the GBP21.5m of deferred consideration payable to npower next
month. At this level, the ratio of net debt to EBITDA (on a
12-month rolling basis) remains low at around 1.0x.
The Board has resolved to increase the interim dividend by 4.5%
to 23p per share (2015: 22p). This will be paid on 16 December 2016
to shareholders on the register on 2 December 2016, and the
Company's shares will go ex-dividend on Thursday 1 December
2016.
In the absence of unforeseen circumstances, the Board confirms
its intention to propose a final dividend of 25p (2016: 24p) making
a total of 48p (2016: 46p) for the full year.
Tax
Our effective tax rate for the first half was 23.8% (2015:
25.2%); this remains higher than the underlying rate of corporation
tax due to the ongoing amortisation charge on our intangible
assets, which is not an allowable deduction for tax purposes. It
also reflects the inclusion of our share of the profits of Opus (in
which we have a 20% shareholding) which is shown on our
Consolidated Statement of Comprehensive Income net of tax.
Appointment of New Director
We are delighted to welcome Andrew Blowers as an independent
non-executive director, who is joining the board with immediate
effect. He is currently a non-executive Director of AA PLC, the
UK's largest breakdown service, and of CETA Insurance Limited a
specialist online insurance provider. His career spans over 25
years in the UK financial services industry. He was the founder and
CEO of Swiftcover.com and Chairman of IIC NV from 2004 to 2009 and
an executive director of Churchill Insurance before this.
Andrew's wealth of experience in the insurance industry will be
a major asset to the Telecom Plus board as we progressively
introduce a range of insurance services over the coming years, and
we look forward to working with him.
As at the date of this announcement, Andrew has no beneficial
interest in the ordinary shares of the Company.
There are no other disclosures required under Section 9.6.13 (1)
to (6) of the Listing Rules.
Future Opportunities
Our strategy is to build on our unique integrated multi-utility
service proposition to increase our penetration in each of the
markets in which we operate, and to increase the average number of
services we provide to each member. This will entail both
increasing the take up of our existing range of services, whilst
progressively introducing complementary new services.
Insurance
We will shortly be trialling a home insurance product with our
Partners, which will form part of the single monthly bill we
already produce for our members. We will be acting as appointed
representative rather than as principal in the supply of this new
service, which if successful, and subject to regulatory approval,
we would intend to roll out to our membership base during the
course of calendar year 2017. A successful launch of home insurance
is expected to be followed by a range of other insurance
services.
Water
The water supply market for business customers is on track to be
opened up to greater competition during 2017, and the government
has announced its intention to introduce legislation to also open
up the water supply market for domestic customers to competition
within the lifetime of this parliament. Although margins in this
area are expected to be low, we believe our unique integrated
approach to providing utilities will enable us to develop a
commercially attractive proposition to take advantage of these new
opportunities in due course.
Television
Although many other providers of telephony services have chosen
to move into the television market, we have no current plans to
emulate them, as we have thus far been unable to identify a way of
doing so that combines an attractive proposition for our members
with a satisfactory commercial return for shareholders.
Outlook
After falling by as much as 50% over the last three years,
wholesale energy prices have now started to rise again, with
significant double-digit percentage inflation in the cost of both
gas and electricity since the early summer. Furthermore,
non-commodity costs are also under significant upward pressure, due
to the rollout of smart meters, the renewal and extension of
distribution networks, capacity market auctions, renewable energy
programmes, and the replacement of generating plant that has
reached the end of its useful life.
As a result, the price of short-term deals available through
price comparison websites and via collective switching initiatives
has recently started to rise, reducing the gap between the bottom
of the market and the price paid by the vast majority of consumers
on standard variable tariffs. We welcome the narrowing of this gap
and anticipate that it will lead to a recovery in the confidence
that our Partners have in the competitiveness of our multi-utility
proposition, and to a return to faster organic growth in due
course.
There are widespread concerns that these higher wholesale energy
prices, combined with rising industry non-commodity costs, will put
significant pressure on the smaller balance sheets of some of the
independent energy suppliers who have entered the market over the
last few years, notwithstanding that standard variable prices are
also expected to start rising soon.
In contrast, our strong balance sheet, unique integrated
multi-utility business model, and long term wholesale supply
agreement with npower (which protects us from short-term
fluctuations in wholesale prices and any consequent higher
balancing costs), mean these factors do not present any downside
risk to the profit guidance we have given. Nor do we anticipate, as
a UK centric business supplying core household services (where any
increases in costs tend to be passed through into retail prices),
that "Brexit" will have any negative impact on our earnings or
growth.
We continue to rollout smart meters into our customers' homes,
with around 35,000 (largely dual-fuel) meters now installed. We
anticipate that this programme will begin to gather pace during the
second half, before accelerating strongly during the course of next
year. The financial benefits from this programme (excluding any
timing differences which may arise between when costs are incurred
and when they are recovered) will depend on the speed and
efficiency of our rollout relative to other suppliers.
The CMA enquiry into the energy market published their final
report in June 2016. We welcome the relaxation they announced to
the previous rules which prohibited any type of discount, and also
restricted each supplier to just four tariffs. However, we believe
they were wrong not to maintain the requirement that suppliers must
offer their cheapest tariffs to both new and existing customers,
and we continue to have concerns as to the practical implementation
of their proposed marketing database for disengaged households.
The likely outcome of the CMA changes (which is perhaps not
their intention) will be a significant reduction in the potential
savings available from switching, and thus a reduction in overall
switching volumes, particularly between energy-only suppliers who
are competing mainly on price. It is our view that trust in the
energy industry can only be damaged by allowing price comparison
sites, which consumers depend upon for information on the cheapest
tariffs available in the market, to be selective on which suppliers
and/or deals they include based solely on the amount of commission
they receive. In the meantime, we are developing a strategy to
leverage our unique route to market and multi-utility business
model in order to make the most of the opportunities created by
these changes.
We remain encouraged by the long term value that Project
Daffodil is delivering in terms of both customer satisfaction and
customer quality, albeit that it has not yet delivered the increase
in overall volumes that we had expected; we believe this is mainly
due to the recent challenging competitive environment. As the
number of households who have had their free LED light bulbs
installed increases (which should act as a trigger for them to
refer us to their friends), and as our Partners become more
confident in the overall competitiveness of our proposition, we
believe these higher anticipated volumes will start to
materialise.
We maintain our full year guidance for adjusted profits before
tax at GBP55m to GBP59m, although we now anticipate the outcome
will be towards the upper-end of this range. Overall we remain well
placed to benefit from the opportunities which lie ahead.
Principal Risks and Uncertainties
Background
The Group faces various risk factors, both internal and
external, which could have a material impact on long-term
performance. However, the Group's underlying business model is
considered relatively low-risk, with no need for management to take
any disproportionate risks in order to preserve or generate
shareholder value.
The Group continues to develop and operate a consistent and
systematic risk management process, which involves risk ranking,
prioritisation and subsequent evaluation, with a view to ensuring
all significant risks have been identified, prioritised and (where
possible) eliminated, and that systems of control are in place to
manage any remaining risks.
A formal document is prepared by the executive directors and
senior management team on a regular basis detailing the key risks
faced by the Group and the operational controls in place to
mitigate those risks; this document is then reviewed by the Audit
Committee. No new principal risks have been identified during the
period, and save as set out below, nor has the magnitude of any
risks previously identified significantly changed during the
period.
Business model
The principal risks outlined below should be viewed in the
context of the Group's business model as a reseller of utility
services (gas, electricity, fixed line telephony, mobile telephony
and broadband) under the Utility Warehouse and TML brands. As a
reseller, the Group does not own any of the network infrastructure
required to deliver these services to its membership base. This
means that while the Group is heavily reliant on third party
providers, it is insulated from all the direct risks associated
with owning and/or operating such capital intensive infrastructure
itself.
The Group's services are promoted using 'word of mouth' by a
large network of independent Partners, who are paid solely on a
commission basis. This means that the Group has minimal fixed costs
associated with acquiring new Members.
The principal specific risks arising from the Group's business
model, and the measures taken to mitigate those risks, are set out
below.
Reputational risk
The Group's reputation amongst its Members, suppliers and
Partners is believed to be fundamental to the future success of the
Group. Failure to meet expectations in terms of the services
provided by the Group, the way the Group does business or in the
Group's financial performance could have a material negative impact
on the Group's performance.
In relation to the service provided to its membership base,
reputational risk is principally mitigated through the Group's
recruitment processes, a focus on closely monitoring staff
performance, including the use of direct feedback surveys from
Members (Net Promoter Score), and through the provision of rigorous
staff training.
Responsibility for maintaining effective relationships with
suppliers and Partners rests primarily with the appropriate member
of the Group's senior management team with responsibility for the
relevant area. Any material changes to supplier agreements and
Partner commission arrangements which could impact the Group's
relationships are generally negotiated by the executive Directors
and ultimately approved by the full Board.
Information technology risk
The Group is dependent on its proprietary billing and membership
management software for the successful operation of its business
model. This software is developed and maintained in accordance with
the changing needs of the business by a team of highly skilled,
generally long-standing, motivated and experienced individuals. The
Group relies on this software and any failure in its operation
could negatively impact service to Members and potentially be
damaging to the Group's brand.
All significant changes which are made to the billing and
membership management software are tested as extensively as
reasonably practicable before launch and are ultimately approved by
the Chief Technology Officer and Billing departments in
consultation with the Chief Executive as appropriate.
Back-ups of both the software and underlying billing and
membership data are made on a regular basis and securely stored
off-site. The Group also maintains a disaster recovery facility in
a warm standby state in the event of a failure of the main system,
designed to ensure that a near-seamless service to Members can be
maintained.
The Group has full strategic control over the source code behind
its billing and membership management system, thereby removing any
risk of future software development not being able to meet the
precise requirements of the Group.
Data security risk
The Group processes sensitive personal and commercial data
during the course of its business. The Group looks to protect
customer and corporate information and data and to keep its
infrastructure secure. A significant breach of cyber security could
result in the Group facing prosecution and fines, loss of
commercially sensitive information, financial losses from fraud and
theft, lost productivity from not being able to process orders and
invoices, and unplanned costs to restore and improve the Group's
security. This could damage the Group's brand which might take an
extended period of time to rebuild. Ultimately, individuals'
welfare could be put at risk in the event that the Group was not
able to provide services or personal data was misappropriated. The
Group uses high specification firewalling, network segmentation,
and multifaceted network and endpoint anti-viral mitigation
systems; external consultants are also used to conduct penetration
testing of the Group's internal and external IT infrastructure.
Legislative and regulatory risk
The Group is subject to varying laws and regulations, including
possible adverse effects from European regulatory intervention. The
energy markets in the UK and Continental Europe are subject to
comprehensive operating requirements as defined by the relevant
sector regulators and/or government departments. Amendments to the
regulatory regime could have an impact on the Group's ability to
achieve its financial goals and any failure to comply may result in
the Group being fined and lead to reputational damage which could
impact the Group's brand. Furthermore, the Group is obliged to
comply with retail supply procedures, amendments to which could
have an impact on operating costs.
The Group is a licenced gas and electricity supplier, and
therefore has a direct regulatory relationship with Ofgem. If the
Group fails to comply with its licence obligations, it could be
subject to fines or to the removal of its respective licences.
Proposed regulatory changes such as the new requirements in
relation to smart energy meters (with the potential for additional
costs if existing meters must be replaced prior to the end of their
planned lives) and social tariffs, and changes to the current
decommissioning regime, could all have a potentially significant
impact on the sector, although such additional costs are not
expected to affect the net margins earned by energy suppliers in
the longer term (as any such extra costs are likely to be reflected
in higher retail charges).
In general, the majority of the Group's services are supplied
into highly regulated markets, and this could restrict the
operational flexibility of the Group's business. In order to
mitigate this risk, the Group seeks to maintain appropriate
relations with both Ofgem and Ofcom (the UK regulators for the
energy and communications markets respectively), the Department for
Business, Energy and Industrial Strategy ('BEIS'), and the
Financial Conduct Authority ('FCA'). The Group engages with
officials from all these organisations on a periodic basis to
ensure they are aware of the Group's views when they are consulting
on proposed regulatory changes or if there are competition issues
the Group needs to raise with them.
It should be noted that the regulatory environment for the
various markets in which the Group operates is generally focussed
on promoting competition; it therefore seems reasonable to expect
that most potential changes will broadly be beneficial to the
Group, given the Group's relatively small size compared to the
former monopoly incumbents with whom it competes, although these
changes, and their actual impact, will always remain uncertain.
Political and consumer concern over energy prices and fuel
poverty may lead to further reviews of the energy market which
could result in further consumer protection legislation being
introduced through energy supply licences. The Government could
also choose to introduce adverse measures such as a windfall tax on
the Group or price controls for certain customer segments. In
addition, political and regulatory developments affecting the
energy and telecoms markets within which the Group operates may
have a material adverse effect on the Group's business, results of
operations and overall financial condition.
Financing risk
The Group has debt service obligations which may place operating
and financial restrictions on the Group. This debt could have
adverse consequences insofar as it: (a) requires the Group to
dedicate a proportion of its cash flows from operations to fund
payments in respect of the debt, thereby reducing the flexibility
of the Group to utilise its cash to invest in and/or grow the
business; (b) increases the Group's vulnerability to adverse
general economic and/or industry conditions; (c) may limit the
Group's flexibility in planning for, or reacting to, changes in its
business or the industry in which it operates; (d) may limit the
Group's ability to raise additional debt in the long term; and (e)
could restrict the Group from making larger strategic acquisitions
or exploiting business opportunities.
Each of these prospective adverse consequences (or a combination
of some or all of them) could result in the potential growth of the
Group being at a slower rate than may otherwise be achieved.
Fraud and bad debt risk
The Group has a universal supply obligation in relation to the
provision of energy to domestic customers. This means that although
the Group is entitled to request a reasonable deposit from
potential new Members who are not considered creditworthy, the
Group is obliged to supply domestic energy to everyone who submits
a properly completed application form. Where Members subsequently
fail to pay for the energy they have used ('Delinquent Members'),
there is likely to be a considerable delay before the Group is able
to control its exposure to future bad debt from them by either
installing a pre-payment meter or disconnecting their supply, and
the costs associated with preventing such Delinquent Members from
increasing their indebtedness are not always fully recovered.
Fraud and bad debt within the telephony industry may arise from
Members using the services, or being provided with a mobile
handset, without intending to pay their supplier. The amounts
involved are generally relatively small as the Group has
sophisticated call traffic monitoring systems to identify material
occurrences of usage fraud. The Group is able to immediately
eliminate any further usage bad debt exposure by disconnecting any
telephony service that demonstrates a suspicious usage profile, or
falls into arrears on payments.
More generally, the Group is also exposed to payment card fraud,
where Members use stolen cards to obtain credit (e.g. on their
CashBack card) or goods (e.g. Smartphones and Tablets) from the
Group; the Group regularly reviews and refines its fraud protection
systems to reduce its potential exposure to such risks.
Wholesale prices risk
The Group does not own or operate any utility network
infrastructure itself, choosing instead to purchase the capacity
needed from third parties. The advantage of this approach is that
the Group is protected from technological risk, capacity risk or
the risk of obsolescence, as it can purchase the amount of each
service required to meet its Members' needs.
Whilst there is a theoretical risk that in some of the areas in
which the Group operates it may be unable to secure access to the
necessary infrastructure on commercially attractive terms, in
practice the pricing of access to such infrastructure is either
regulated (as in the energy market) or subject to significant
competitive pressures (as in telephony and broadband). The profile
of the Group's Members, the significant quantities of each service
they consume in aggregate, and our clearly differentiated route to
market has historically proven attractive to infrastructure owners,
who compete aggressively to secure a share of the Group's growing
business.
The supply of energy has different risks associated with it. The
wholesale price can be extremely volatile, and Member demand can be
subject to considerable short term fluctuations depending on the
weather. The Group has a long-standing supply relationship with
npower under which the latter assumes the substantive risks and
rewards of hedging and buying energy for the Group's Members, and
where the price paid by the Group is set by reference to the
average of the standard variable tariffs charged by the 'Big 6' to
their domestic customers less an agreed discount; this may not be
competitive against the wholesale prices paid by new and/or other
independent suppliers. However, if the Group did not have the
benefit of this long term supply agreement it would be exposed to
the pricing risk of securing access to the necessary energy on the
open market and the costs of balancing.
Competitive risk
The Group operates in highly competitive markets and significant
service innovations or increased price competition could impact
future profit margins. In order to maintain its competitive
position, there is a consistent focus on ways of improving
operational efficiency. New service innovations are monitored
closely by senior management and the Group is generally able to
respond within an acceptable timeframe by offering any new services
using the infrastructure of its existing suppliers. The Group
offers a unique multi-utility proposition. The increasing
proportion of Members who are benefiting from a genuine
multi-utility solution, that is unavailable from any other known
supplier, materially reduces any competitive threat.
The Directors anticipate that the Group will face continued
competition in the future as new companies enter the market and
alternative technologies and services become available. The Group's
services and expertise may be rendered obsolete or uneconomic by
technological advances or novel approaches developed by one or more
of the Group's competitors. In the event that smaller independent
energy suppliers were to experience financial difficulties as a
result of increasing wholesale prices for instance, it is possible
that customers could also have a loss of confidence in the Group,
given that it is also an independent energy supplier. The existing
approaches of the Group's competitors or new approaches or
technologies developed by such competitors may be more effective or
affordable than those available to the Group. There can be no
assurance that the Group will be able to compete successfully with
existing or potential competitors or that competitive factors will
not have a material adverse effect on the Group's business,
financial condition or results of operations. However, as the
Group's membership base continues to rise, competition amongst
suppliers of services to the Group is expected to increase. This
has already been evidenced by various volume-related growth
incentives which have been agreed with the Group's three largest
wholesale suppliers. This should also ensure that the Group has
direct access to new technologies and services available to the
market.
Infrastructure risk
The provision of services to the Group's Members is reliant on
the efficient operation of third party physical infrastructure.
There is a risk of disruption to the supply of services to Members
through any failure in the infrastructure e.g. gas shortages, power
cuts or damage to communications networks. However, as the
infrastructure is generally shared with other suppliers, any
material disruption to the supply of services is likely to impact a
large part of the market as a whole and it is unlikely that the
Group would be disproportionately affected. In the event of any
prolonged disruption isolated to the Group's principal supplier
within a particular market, services required by Members could in
due course be sourced from another provider.
Energy industry estimation risk
A significant degree of judgement and estimation is required in
order to determine the actual level of energy used by Members and
hence that should be recognised by the Group as sales. There is an
inherent risk that the estimation routines used by the Group do not
in all instances fully reflect the actual usage of Members.
However, this risk is mitigated by the relatively high proportion
of Members who provide meter readings on a periodic basis, and the
rapid anticipated growth in the installed base of smart meters over
the next four years.
Gas Leakage within the national gas distribution network
The operational management of the national gas distribution
network is outside the control of the Group. There is a risk that
the level of leakage in future could be higher than those
historically experienced, and above the level currently
expected.
Key man risk
The Group is dependent on its key management for the successful
development and operation of its business. In the event that any or
all of the members of the key management team were to leave the
business, it could have a material adverse effect on the Group's
operations.
Single site risk
The Group operates from one principal site and, in the event of
significant damage to that site through fire or other issues, the
operations of the Group could be adversely affected.
Acquisition Risk
The Group may invest in other businesses, taking a minority,
majority or 100% equity shareholding, or through a joint venture
partnership. Such investments may not deliver the anticipated
returns, and may require additional funding in future.
Going concern
Recent developments in the Group's business activities, together
with the factors likely to affect its future development,
performance and financial position are set out above.
Under the Group's energy supply arrangements, npower continues
to be responsible for funding the principal working capital
requirements relating to the supply of energy to the Group's
Members. This includes funding the Budget Plans of Members who pay
for their energy in equal monthly installments and pre-funding the
payment of certain energy network charges.
The Group has from Barclays Bank PLC and Lloyds Bank PLC total
revolving credit facilities of GBP150m for the period to 14
December 2020, of which only GBP51.5m was drawn down at the period
end.
The Group has considerable financial resources together with a
large and diverse retail and small business membership base and
long term contracts with a number of key suppliers. As a
consequence, the directors believe that the Group is well placed to
manage its business risks.
On this basis the directors have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future. The interim financial
statements have therefore been prepared on a going concern basis in
accordance with the FRC's Going Concern and Liquidity Risk:
Guidance for Directors of UK Companies 2009 issued in October
2009.
Directors' responsibilities
The Directors are responsible for the preparation of the
condensed set of financial statements and interim management report
comprising this set of Half-Yearly Results for the six months ended
30 September 2016, each of whom accordingly confirms that to the
best of his knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 "Interim Financial Reporting" and
provides a true and fair view of the assets, liabilities, financial
position and profit of the Group as a whole;
-- the interim management report includes a fair review of the
information required by the Financial Statements Disclosure
Guidance and Transparency Rules (DTR) 4.2.7R (indication of
important events during the first six months and their impact on
the financial statements and description of principal risks and
uncertainties for the remaining six months of the year); and
-- the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosures of related party
transactions and changes therein).
The Directors of Telecom Plus PLC are:
Charles Wigoder Executive Chairman
Julian Schild Non-Executive Deputy Chairman
Andrew Lindsay Chief Executive
Nick Schoenfeld Chief Financial Officer
Melvin Lawson Non-Executive Director
Beatrice Hollond Non-Executive Director
Given on behalf of the Board
ANDREW LINDSAY NICK SCHOENFELD
Chief Executive Chief Financial
Officer
21 November 2016
Independent Review Report to Telecom Plus PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2016 which comprises the condensed
consolidated interim statement of comprehensive income, the
condensed consolidated interim statement of financial position, the
condensed consolidated interim statement of cash flows, the
condensed consolidated interim statement of changes in
shareholders' equity and the related explanatory notes. We have
read the other information contained in the half-yearly financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company for our review work, for this report, or for the
conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
The annual financial statements of the group are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2016 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU and the DTR of the UK
FCA.
David Neale
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
Canary Wharf
London EC14 5GL
United Kingdom
21 November 2016
Condensed Consolidated Interim Statement of Comprehensive
Income
Note 6 months 6 months Year
ended ended ended
30 September 30 September 31
March
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 291,312 294,035 744,732
Cost of sales (229,782) (236,813) (620,858)
--------------- --------------- ------------
Gross profit 61,530 57,222 123,874
Distribution expenses (10,702) (9,923) (21,424)
Share incentive scheme
(charges) / credits (48) 20 (36)
------------------------- ----- --------------- --------------- ------------
Total distribution
expenses (10,750) (9,903) (21,460)
Administrative expenses (26,126) (25,882) (52,355)
Share incentive scheme
charges (736) (1,661) (2,479)
Amortisation of
intangible
assets 5 (5,614) (5,614) (11,228)
------------------------- ----- --------------- --------------- ------------
Total administrative
expenses (32,476) (33,157) (66,062)
Other income 214 201 397
--------------- --------------- ------------
Operating profit 18,518 14,363 36,749
Financial income 60 54 126
Financial expense (745) (931) (1,801)
--------------- --------------- ------------
Net financial expense (685) (877) (1,675)
Share of profit of
associate 832 1,754 5,609
--------------- --------------- ------------
Profit before taxation 18,665 15,240 40,683
Taxation (4,445) (3,838) (8,909)
--------------- --------------- ------------
Profit and total
comprehensive
income for the period
attributable to owners
of the parent 14,220 11,402 31,774
--------------- --------------- ------------
Basic earnings per share 9 17.8p 14.3p 39.8p
Diluted earnings per
share 9 17.7p 14.2p 39.6p
Interim dividend per
share 23.0p 22.0p
Condensed Consolidated Interim Balance Sheet
Note
As at As at As at
31
30 September 30 September March
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and
equipment 33,115 32,870 33,063
Investment property 4 9,268 9,401 9,211
Intangible assets 5 193,319 203,978 198,364
Goodwill 3,742 3,742 3,742
Investment in associate 7,417 7,160 11,604
Other non-current receivables 14,131 14,027 13,800
Total non-current assets 260,992 271,178 269,784
--------------- ----------------- ------------
Current assets
Inventories 2,921 1,266 2,762
Trade and other receivables 26,156 24,240 27,749
Prepayments and accrued
income 61,513 64,811 97,233
Cash 15,326 23,520 35,343
Total current assets 105,916 113,837 163,087
Total assets 366,908 385,015 432,871
--------------- ----------------- ------------
Current liabilities
Short term borrowings 6 - (9,895) -
Deferred consideration (21,500) - (21,500)
Trade and other payables (25,405) (22,028) (26,580)
Current tax payable (4,737) (1,456) (936)
Deferred tax (586) (289) (839)
Accrued expenses and
deferred income (68,641) (76,028) (114,583)
Total current liabilities (120,869) (109,696) (164,438)
--------------- ----------------- ------------
Non-current liabilities
Long term borrowings 6 (51,525) (59,369) (70,152)
Deferred consideration - (21,500) -
JSOP creditor - (2,476) -
--------------- ----------------- ------------
Total non-current liabilities (51,525) (83,345) (70,152)
Total assets less total
liabilities 194,514 191,974 198,281
--------------- ----------------- ------------
Equity
Share capital 4,019 4,014 4,016
Share premium 138,160 137,550 137,729
Treasury shares (760) (760) (760)
JSOP reserve (1,150) (2,275) (1,150)
Retained earnings 54,245 53,445 58,446
Total equity 194,514 191,974 198,281
--------------- ----------------- ------------
Condensed Consolidated Interim Cash Flow Statement
Note
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Operating activities
Profit before taxation 18,665 15,240 40,683
Adjustments for:
Share of profit of associate (832) (1,754) (5,609)
Net financial expense 685 877 1,675
Depreciation of property, plant
and equipment 1,936 1,712 3,596
Profit on disposal of fixed
assets (8) - (12)
Amortisation of intangible
assets 5,614 5,614 11,228
Amortisation of debt arrangement
fees 114 191 985
Increase in inventories (159) (373) (1,869)
Decrease in trade and other
receivables 36,980 43,907 8,202
Increase / (decrease) in trade
and other payables (47,116) (41,810) 1,206
Share incentive scheme charges 784 1,641 2,515
Corporation tax paid (900) (3,732) (8,755)
--------------- ---------------- ------------
Net cash flow from operating
activities 15,763 21,513 53,845
--------------- ---------------- ------------
Investing activities
Purchase of property, plant
and equipment (2,052) (2,183) (4,080)
Purchase of intangible assets (569) - -
Disposal of property, plant
and equipment 14 - 22
Distribution from associated
company 5,074 5,474 5,474
Purchase of shares in associated
company (55) (36) (626)
Interest received 62 57 115
--------------- ---------------- ------------
Cash flow from investing activities 2,474 3,312 905
--------------- ---------------- ------------
Financing activities
Dividends paid 7 (19,205) (16,734) (34,331)
Interest paid (742) (1,422) (2,202)
Drawdown of long term borrowing
facilities - - 71,241
Repayment of borrowing facilities (18,741) - (70,000)
Fees associated with borrowing
facilities - - (1,147)
Issue of new ordinary shares 8 434 315 496
Cash flow from financing activities (38,254) (17,841) (35,943)
--------------- ---------------- ------------
Increase/(decrease) in cash
and cash equivalents (20,017) 6,984 18,807
Net cash and cash equivalents
at the beginning of the period 35,343 16,536 16,536
--------------- ---------------- ------------
Net cash and cash equivalents
at the end of the period 15,326 23,520 35,343
--------------- ---------------- ------------
Condensed Consolidated Interim Statement of Changes in
Equity
Share Share Treasury JSOP Retained
Capital Premium Shares Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April
2015 4,011 137,238 (760) (2,275) 58,106 196,320
Profit and
total
comprehensive
income
for the
period - - - - 11,402 11,402
Dividends - - - - (16,734) (16,734)
Credit arising
on
share options - - - - 671 671
Issue of new
ordinary
shares 3 312 - - - 315
Balance at 30
September
2015 4,014 137,550 (760) (2,275) 53,445 191,974
Balance at 1
October
2015 4,014 137,550 (760) (2,275) 53,445 191,974
Profit and
total
comprehensive
income
for the
period - - - - 20,372 20,372
Dividends - - - - (17,597) (17,597)
Credit arising
on
share options - - - - 553 553
Credit on
exercise
of JSOP - - - 1,125 1,673 2,798
Issue of new
ordinary
shares 2 179 - - - 181
Balance at 31
March
2016 4,016 137,729 (760) (1,150) 58,446 198,281
Balance at 1
April
2016 4,016 137,729 (760) (1,150) 58,446 198,281
Profit and
total
comprehensive
income
for the
period - - - - 14,220 14,220
Dividends - - - - (19,205) (19,205)
Credit arising
on
share options - - - - 784 784
Issue of new
ordinary
shares 3 431 - - - 434
Balance at 30
September
2016 4,019 138,160 (760) (1,150) 54,245 194,514
-------- -------------------- --------- -------------- --------- ---------
Notes to the condensed interim financial statements
1. General
information
The condensed consolidated interim financial statements
presented in this half-year report ("the Half-Year
Results") have been prepared in accordance with IAS
34. The principal accounting policies adopted in
the preparation of the condensed consolidated financial
statements are unchanged from those used in the annual
report for the year ended 31 March 2016 and are consistent
with those that the company expects to apply in its
financial statements for the year ended 31 March
2017.
There are no new standards or amendments to standards
that are mandatory for the first time for the financial
year beginning 1 April 2016 that have an impact on
the Group financial statements.
The condensed consolidated financial statements for
the year ended 31 March 2016 presented in this half-year
report do not constitute the company's statutory
accounts for that period. The condensed consolidated
financial statements for that period have been derived
from the Annual Report and Accounts of Telecom Plus
Plc. The Annual Report and Accounts of Telecom Plus
Plc for the year ended 31 March 2016 were audited
and have been filed with the Registrar of Companies.
The Independent Auditors' Report on the Annual Report
and Accounts of Telecom Plus Plc for the year ended
31 March 2016 was unqualified and did not draw attention
to any matters by way of emphasis and did not contain
statements under s498(2) or (3) of the Companies
Act 2006. The financial information for the periods
ended 30 September 2016 and 30 September 2015 is
unaudited but has been subject to a review by the
company's auditors.
Seasonality of business: in respect of the energy
supplied by the Group, approximately two thirds is
consumed by customers in the second half of the financial
year.
The Half-Year Results were approved for issue by
the Board of Directors on 21 November 2016.
2. Judgements and estimates
The preparation of the condensed consolidated interim
financial statements requires management to make
judgements, estimates and assumptions that affect
the application of policies and reported amounts
of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on
historical experience and various other factors that
are believed to be reasonable under the circumstances,
the results of which form the basis of making judgments
about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate
is revised and in future periods if applicable.
In preparing these condensed consolidated interim
financial statements, the significant judgements
made by management in applying the group's accounting
policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated
financial statements as at and for the year ended
31 March 2016.
3. Operating
segments
For management reporting purposes, the Group is currently
organised into two operating divisions: Customer Management
and Customer Acquisition. These divisions form the
basis on which the Group reports its segment information.
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2016 2015 2016
(unaudited) (unaudited) (audited)
Segment Segment Segment
Revenue Result Revenue Result Revenue Result
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Customer
Management 282,673 27,379 286,262 20,080 727,936 51,305
Customer
Acquisition 8,639 (8,861) 7,773 (5,717) 16,796 (14,556)
Total 291,312 18,518 294,035 14,363 744,732 36,749
-------- --------------- --------- -------------- --------- ----------
As at
30 September
2015
As at As at
30 September 31 March
2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Customer
Management 359,535 377,310 422,896
Customer
Acquisition 7,373 7,705 9,975
Total Assets 366,908 385,015 432,871
--------------- -------------- ----------
Customer
Management (169,457) (190,551) (231,553)
Customer
Acquisition (2,937) (2,490) (3,037)
Total
Liabilities (172,394) (193,041) (234,590)
--------------- -------------- ----------
4. Investment property
Investment properties are properties which are held either to
earn rental income or for capital appreciation or for both.
Investment properties are stated at cost less accumulated
depreciation.
Rental income from investment properties is accounted for on an
accruals basis. The Company vacated its former head office, Southon
House, in the prior year and the property is now held as an
investment property.
An independent valuation of Southon House was conducted at 30
September 2015 in accordance with RICS Valuation - Professional
Standards UK January 2014 (revised April 2015) guidelines. The
independent market value of Southon House was determined to be
GBP10.2 million. The directors believe that there have not been any
material changes in circumstances that would lead to a significant
change in the market valuation of Southon House since 30 September
2015.
5. Intangible assets
Energy
Supply IT Software
Contract Development Total
GBP'000 GBP'000 GBP'000
Cost
At 31 March 2016 224,563 - 224,563
Additions - 569 569
---------- -------------- ---------
At 30 September 2016 224,563 569 225,132
Amortisation
At 31 March 2016 (26,199) - (26,199)
Charge for the period (5,614) - (5,614)
---------- -------------- ---------
At 30 September 2016 (31,813) - (31,813)
Net book amount at 30 September
2016 (unaudited) 192,750 569 193,319
---------- -------------- ---------
Net book amount at 31 March
2016 (audited) 198,364 - 198,364
---------- -------------- ---------
Net book amount at 30 September
2015 (unaudited) 203,978 - 203,978
---------- -------------- ---------
The Energy Supply Contract intangible asset relates to the
entering into of the energy supply arrangements with npower on
improved commercial terms through the acquisition of Electricity
Plus Supply Limited and Gas Plus Supply Limited from Npower Limited
having effect from 1 December 2013. The intangible asset is being
amortised evenly over the 20 year life of the energy supply
agreement.
The IT Software Development intangible asset relates to the
capitalisation of certain costs associated with the development of
new IT systems.
6. Interest bearing loans and borrowings
6 months 6 months
ended ended Year
30 September 30 September ended
2016 2015 31 March
(unaudited) (unaudited) 2016
(audited)
GBP'000 GBP'000 GBP'000
Bank loans 52,500 70,000 71,241
Unamortised loan
arrangement fees (975) (736) (1,089)
Working capital facilities - - -
-------------- -------------- ------------
51,525 69,264 70,152
-------------- -------------- ------------
Due within one year - 10,000 -
Due after one year 51,525 60,000 71,241
-------------- -------------- ------------
51,525 70,000 71,241
-------------- -------------- ------------
7. Dividends
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Final dividend for
the year ended 31
March 2016 of 24p
per share 19,205 - -
Final dividend for
the year ended 31
March 2015 of 21p
per share - 16,734 16,734
Interim dividend for
the year ended 31
March 2016 of 22p
per share (2015: 19p) - - 17,597
----------------- --------------- ------------
An interim dividend of 23.0p per share will be paid on 16
December 2016 to shareholders on the register at close of business
on 2 December 2016. The estimated amount of this dividend to be
paid is approximately GBP18.4m and, in accordance with IFRS
accounting requirements, has not been recognised in these
accounts.
8. Share capital
During the period the Company issued 66,433 new ordinary shares
to satisfy the exercise of employee and distributor share
options.
9. Earnings per share
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2016 2015 2016
(unaudited) (unaudited) (audited)
The calculation of the basic GBP'000 GBP'000 GBP'000
and diluted earnings per share
is based on the following
data:
Earnings for the purpose of
basic and diluted earnings
per share 14,220 11,402 31,774
Share incentive scheme charges
/ (credits) (net of tax) 637 1,502 2,278
Amortisation of intangible
assets 5,614 5,614 11,228
--------------- --------------- ------------
Earnings excluding share incentive
scheme charges for the purpose
of adjusted basic and diluted
earnings per share 20,471 18,518 45,280
--------------- --------------- ------------
Number Number Number
('000) ('000) ('000)
Weighted average number of
ordinary shares for the purpose
of basic earnings per share 80,024 79,679 79,789
Effect of dilutive potential
ordinary shares (share incentive
awards) 370 619 363
--------------- --------------- ------------
Weighted average number of
ordinary shares for the purpose
of diluted earnings per share 80,394 80,298 80,152
--------------- --------------- ------------
Adjusted basic earnings per
share[1] 25.6p 23.2p 56.7p
--------------- --------------- ------------
Basic earnings per share 17.8p 14.3p 39.8p
--------------- --------------- ------------
Adjusted diluted earnings
per share1 25.5p 23.1p 56.5p
--------------- --------------- ------------
Diluted earnings per share 17.7p 14.2p 39.6p
--------------- --------------- ------------
[1] In order to provide a clearer understanding of the
underlying trading performance of the Group, adjusted basic EPS
excludes: (i) share incentive scheme charges; and (ii) the
amortisation of intangible assets arising on entering into the new
energy supply arrangements with npower in December 2013. The
amortisation of intangible assets and share incentive scheme
charges have been excluded on the basis that they represent
non-cash accounting charges. These balances can be derived directly
from amounts shown separately on the face of the condensed
consolidated interim statement of comprehensive income.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKDDQOBDDCDB
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