TIDMTEP
RNS Number : 7848W
Telecom Plus PLC
28 April 2021
28 April 2021
Telecom Plus PLC
Trading Update and Notice of Results
Telecom Plus PLC (trading as Utility Warehouse), which supplies
a wide range of utility services focussed on domestic customers,
today issues a trading update for its financial year ended 31 March
2021.
Highlights
-- Revenues and profits expected to be in line with guidance
-- Growth in customer numbers of +0.8% (2020: 2.7%) and services
of +2.5% (2020: 6.2%), despite extended further periods of
lockdown
-- Resilient performance across all aspects of the business
despite the challenges of covid, albeit with additional costs that
would not otherwise have been incurred
-- Strong growth in the number of Partners joining the business
in the second half, generating faster customer growth
-- No change to previous dividend guidance of 57p (2020: 57p) per share for the year
Financial
We anticipate full year adjusted pre-tax profits will be in line
with expectations at around GBP56m (2020: GBP60.8m), reflecting the
impact of lower retail energy prices from 1 October 2020 (in line
with a reduction in the Ofgem price cap), higher regulatory costs,
and extra operating costs associated with covid.
Our balance sheet remains robust, with a year-end net debt
position of around GBP63m (excluding finance leases), and undrawn
facilities of GBP60m.
Trading
Customer numbers for the year increased by 0.8% to 657,411
(2020: 652,237) and core service numbers grew by 2.5% to 2,073,797
(2020: 2,022,716).
The combination of lockdowns and social distancing restrictions
that were in place for much of the year created a challenging
environment for Partners to grow their businesses. Against this
backdrop we were extremely pleased that so many succeeded in doing
so, particularly during the second half, when activity levels
amongst our Partners recovered on the back of increasing confidence
in the competitiveness of our proposition, and growing familiarity
with the new remote sign-up tools we introduced during the
spring.
Churn for the year was broadly stable at around 13%, with bad
debts increasing slightly, principally resulting from a reduction
in enforcement activity during the period due to covid
restrictions.
Our employees are still mostly working from home, using the
secure and robust technology infrastructure we have built. Whilst
this enabled the business to continue largely 'as usual' from a
customer perspective, we incurred additional financial costs which
led to a modest fall in overall productivity during the period; we
anticipate this will reverse over the coming months, with employees
progressively spending increasing amounts of their time at the
office.
Going forward, we see real value in adopting a hybrid structure,
with growing numbers of customer-facing roles being fulfilled by
colleagues who are employed on a permanent work-from-home basis.
This flexible approach will better enable us to meet the needs of
our customers, as demonstrated by the recent extension of our call
centre opening hours.
In terms of our sustainability programme, we have planted over
100,000 native broadleaf trees in the UW Woodland in the Brecon
Beacons, and look forward to publishing an updated Sustainability
Report with our annual results this summer.
Outlook
Our business remains well positioned to build shareholder value
over both the near term and the years ahead, with a diverse
portfolio of essential household services, a motivated distribution
channel, a unique integrated multi-utility business model, market
leading levels of customer retention, and a strong balance sheet.
These attributes have enabled us to build an exceptionally
high-quality customer base, and provide significant confidence over
our future earnings stream.
Our annual Partner 'Power Up' event took place on the weekend of
17/18 April. This was again held virtually, and we were pleased
that over 10,000 Partners registered to attend. The event featured
a number of simplifications and improvements to both our customer
and Partner propositions, making it both simpler and more rewarding
for Partners to promote our services.
We are extremely positive about the pent-up demand for the
flexible income opportunity that we offer our Partners. Prolonged
periods of working from home have led many to reconsider their
work-life choices, and we offer a meaningful near-term income
opportunity that requires no previous qualifications and has no
geographic limitations. This is expected to drive increased Partner
recruitment and activity in the months and years ahead.
We intend to capitalise on these favourable market dynamics by
investing further in both our customer and Partner propositions, as
demonstrated by the changes we made at our recent 'Power Up'
event.
As we emerge from lockdown, and the social distancing
restrictions on our Partners are eased, we anticipate organic
growth returning to pre-pandemic levels over the summer, then
accelerating from that point, supported by the additional
investment we are making in both our customer and Partner
propositions. We will provide guidance on our growth, profit and
dividend outlook for the coming year with our final results for the
year ended 31 March 2021, which we are planning to announce on 15
June 2021.
Dividend
The Company reiterates its previous dividend guidance to pay a
maintained total dividend for the year just ended of 57p (2020:
57p) per share.
Andrew Lindsay, CEO, said:
"Against the challenging backdrop of the past year, I am very
pleased with the resilient performance of the business, and proud
of the spirit that Team Purple - our 48,000 Partners - have
demonstrated throughout the period.
"We are emerging from the pandemic with considerable optimism
about the future: as millions prepare to return to their workplaces
after prolonged periods of working from home, the alternative
flexible income opportunity that we offer our Partners has never
held such appeal.
"We are hugely excited by the prospect of helping many more
people to get on in life and achieve their goals in partnership
with UW over the months and years ahead, and are investing in both
our customer and Partner propositions to meet the rising demand
that we anticipate."
For further information, please contact:
Telecom Plus PLC
Andrew Lindsay, CEO 020 8955 5000
Nick Schoenfeld, CFO
Peel Hunt
Dan Webster / Andrew Clark 020 7418 8900
Numis
Mark Lander / Simon Willis 020 7260 1000
MHP Communications
Reg Hoare / Catherine Chapman / Amy O'Sullivan 020 3128 8778
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 the
Communications, Energy and Insurance markets.
Customers benefit from the convenience of a single monthly
statement, consistently good value across all their utilities and
exceptional levels of service. Telecom Plus does not advertise,
relying instead on 'word of mouth' recommendation by existing
satisfied customers and Partners in order to grow its market
share.
Telecom Plus is listed on the London Stock Exchange (Ticker: TEP
LN). For further information please visit telecomplus.co.uk
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