Final Results

Telecom Plus PLC
09 June 2004



                                TELECOM plus PLC

              Preliminary results for the year ended 31 March 2004

Telecom plus plc, the UK's leading integrated multi-utility (gas, electricity,
telephony, internet), announces preliminary results for the year ended 31 March
2004.

Financial and business highlights:

   •Turnover up 41% to £81.8m (2003: £58.0m)

   •Profits before tax up 90% to £10.6m (2003: £5.6m)

   •Final dividend of 5.5p, total of 10.00p for the full year (2003: 5.75p)

   •Earnings per share of 12.2p (2003: 6.8p)

   •Subscriber base increased 33% to 178,000 (2003: 134,000)

   •Number of services provided increased 39% to 312,000 (2003: 225,000)


Peter Nutting, Chairman, said:

'We have now successfully transformed ourselves from an alternative supplier of
fixed-line telephony services into the UK's first low-cost integrated
multi-utility offering gas, electricity, fixed telephony, mobile telephony and
internet services.

'We are particularly encouraged by the initial response to our introduction of
the Utility Warehouse Discount Club concept during October 2003 (a refinement of
the new brand we had launched a year earlier), which has led to a marked
increase in the average number of services being taken by each new member.

'The combination of our unique multi-service utility proposition, the successful
introduction of our new 'Club' concept and the exceptional value we are
providing to our customers give us great confidence in our ability to deliver
sustained growth over the coming years.'

For press enquiries, please contact:

Charles Wigoder                                   Neil Boom/Sophie Betts
Telecom plus PLC                                  Gresham PR Ltd.
020 8955 5000 020 7404 9000



CHAIRMAN'S STATEMENT

I am pleased to report a further strong set of results, reflecting significant
progress across all areas of our business. We have now successfully transformed
ourselves from an alternative supplier of fixed-line telephony services into the
UK's first low-cost integrated multi-utility offering gas, electricity, fixed
telephony, mobile telephony and internet services.

Pre-tax profits for the year rose by 90% to £10.6m (2003: £5.6m) on turnover
which was ahead 41% to £81.8m (2003: £58.0m). This reflected another strong
performance from our Virtual Network business where operating profits increased
by 65% to £13.8m (2003: £8.4m), partially offset by a higher investment within
our Distribution business of £3.5m (2003: £3.1m).

We ended the financial year with 178,000 customers (2003: 134,000), subscribing
for over 312,000 services (2003: 225,000), an increase in services provided of
almost 40% during the year. We are particularly encouraged by the initial
response to our introduction of the Utility Warehouse Discount Club concept
during October 2003 (a refinement of the new brand we had launched a year
earlier), which has led to a marked increase in the average number of services
being taken by each new member.

The supply of gas and electricity is beginning to represent a material
proportion of group turnover, accounting for 19% of our Virtual Network business
during the year (2003: 11%). Due to the strong demand for energy from new
customers, we anticipate this will increase further to around 30% of group
turnover during the current year.

The two investments which we made during 2002, TML (our wholly owned subsidiary)
and Oxford Power Holdings (trading as Opus, and in which we hold a 15.8% equity
interest), continue to perform in line with expectations. TML generated a
contribution of around £1.2m to group profits (after goodwill amortisation of
£0.5m), and Opus has recently achieved profitability at the Operating Profit
Level (before direct costs relating to growing their customer base).

Confidence within our distribution channel remains high, with a steady increase
in the number of new distributors joining the business. During the last quarter
alone, more than 1,500 new distributors joined the Company, taking the total at
the year end to almost 13,000 (2003: 10,000). I would like to thank all of them
for their important contribution to the continuing growth and success of the
Company.

We continue to invest heavily in our call centre facilities. This has produced a
significant improvement in the levels of service provided to our customers, with
over 90% of all calls being answered within 15 seconds. This is a testament to
the commitment and hard work of everyone involved in this important area of our
activities.

In view of our solid balance sheet and continued cash generation, your Board is
recommending a 69% increase in the final dividend to 5.5p (2003: 3.25p) making a
total of 10p (2003: 5.75p) for the full year. This will be paid on 16 July 2004
to shareholders on the register on the 25 June 2004. The final dividend is
subject to approval by shareholders at the Company's Annual General Meeting
which is to be held on 15 July 2004. We remain committed to the continued
profitable long term growth of the business and to maintaining a progressive
dividend policy that reflects the Company's anticipated growth in earnings.



Outlook

Our recent decision to introduce free fixed-line calls between Club members has
already resulted in a substantial uplift in Club membership, both from amongst
our existing customers (who had not previously joined the Club), as well as from
many new customers who are being referred to the Club in steadily increasing
numbers by existing members. We believe this kind of promotional activity is
ideally suited to the distribution channel we use, and that the costs of
providing these free calls will be substantially off-set by the increased growth
and resultant economies of scale within our Virtual Network business.

The combination of our unique multi-service utility proposition, the successful
introduction of our new 'Club' concept and the exceptional value we are
providing to our customers give us great confidence in our ability to deliver
sustained growth over the coming years.

Margins in fixed telephony, mobile telephony, internet and electricity all
remain extremely satisfactory, however our gas supply business is suffering from
severe margin pressure as a result of the sharp increase in wholesale prices
which have not yet been fully reflected in end-user tariffs.

Although there are many competitors in each of our principal markets, the
barriers to entry preventing others from emulating our integrated business model
remain high. My Board colleagues and I continue to look forward with
considerable optimism.

Peter Nutting
Chairman 8 June 2004




                    Consolidated Profit & Loss Account
                          Year ended 31 March 2004


                                   Note           2004         2003
                                              ----------   ----------
                                                 £'000        £'000

          Turnover                              81,828       58,036

          Cost of sales                        (56,590)     (39,739)
                                              ----------   ----------

          Gross profit                          25,238       18,297

          Sales and marketing costs             (6,207)      (4,543)

          Administrative expenses               (8,751)      (8,514)
                                              ----------   ----------

          Operating profit                      10,280        5,240

          Interest receivable                      372          464

          Interest payable                         (20)        (116)
                                              ----------   ----------

          Profit on ordinary
          activities before taxation            10,632        5,588

          Tax on profit on
          ordinary activities                   (3,178)      (1,607)
                                              ----------   ----------

          Profit after taxation                  7,454        3,981

          Dividends                     2       (6,159)      (3,424)
                                              ----------   ----------

          Retained profit for
          the year                               1,295          557
                                              ==========   ==========

          Basic earnings per            3         12.2p         6.8p
          share

          Diluted earnings per          3         11.9p         6.6p
          share

          Dividend per share                     10.00p        5.75p

The Group has no recognised gains or losses other than the profit for the
period.




                           Consolidated Balance Sheet
                              As at 31 March 2004


                                   2004                       2003
                                  -------                    -------
                         £'000             £'000    £'000             £'000

  FIXED ASSETS
  Tangible assets        1,903                      1,946
  Intangible assets      3,742                      4,198
  Investments            1,038                      1,038
                         -------                     ------
                                           6,683                      7,182
  CURRENT ASSETS
  Stocks                 1,146                        590
  Debtors
  (due within one year)  9,164                      7,994
  Debtors (due after     2,666                      2,822
  one year)
  Cash                   9,857                      6,056
                         -------                     ------
                        22,833                     17,462

  CREDITORS
  Amounts falling due
  within one year       (16,502)                   (13,418)
                         -------                     ------

  NET CURRENT ASSETS                       6,331                      4,044
                                            ------                     ------

  TOTAL ASSETS LESS
  CURRENT LIABILITIES                     13,014                     11,226

  CREDITORS
  Amounts falling due
  after more than one 
  year (convertible debt
  instruments)                                 -                       (350)
                                            ------                     ------
                                          13,014                     10,876
                                            ======                     ======

  CAPITAL AND RESERVES
  Called up share                          3,076                      3,002
  capital
  Share premium account                    6,625                      5,856
  Profit and loss                          3,313                      2,018
  account
  
                                            ------                     ------
  SHAREHOLDERS' FUNDS                     13,014                     10,876
                                            ======                     ======


Approved by the board on 8 June 2004




                         Consolidated Cash Flow Statement
                              Year ended 31 March 2004


                                                           2004       2003
                                                        ---------   --------
                                                          £'000      £'000
   Reconciliation of operating profit
   to cash flow from operating activities
   Operating profit                                      10,280      5,240
   Goodwill amortisation                                    456        360
   Depreciation                                             487        503
   (Profit) on disposal of fixed assets                     (28)         -
   (Increase)/Decrease in stocks                           (556)       737
   (Increase) in debtors                                 (1,014)    (2,332)
   Increase in creditors                                    481        818
   Amortisation of loan stock issue costs                    24         25
                                                        ---------   --------
   Net cash flow from operating activities               10,130      5,351
                                                        =========   ========

   CASH FLOW STATEMENT

   Net cash flow from operating activities               10,130      5,351
   Returns on investments and
   servicing of finance                                     346        319
   Capital expenditure                                     (416)      (363)
   Acquisitions                                               -     (5,461)
   Corporation tax paid                                  (2,109)    (1,952)
   Dividends paid                                        (4,717)    (2,903)
                                                        ---------   --------

   Net cash flow before management of liquid
   resources and financing                                3,234     (5,009)
   Management of liquid resources                             -      2,541
   Financing                                                567        103
                                                        ---------   --------
   Increase/(Decrease) in cash                            3,801     (2,365)
                                                        =========   ========

   Reconciliation of net cash flow to movement
   in net funds

   Increase/(Decrease) in cash                            3,801     (2,365)

   Conversion of loan stock to equity shares                276      1,235
   Cash released from liquid resources                        -     (2,541)
                                                        ---------   --------

   Movement in net funds for the year                     4,077     (3,671)

   Net funds at 1 April 2003                              5,676      9,347
                                                        ---------   --------
   Net funds at 31 March 2004                             9,753      5,676
                                                        =========   ========


                                     NOTES
     
1    The financial information set out above does not constitute the Group's 
     statutory information for the years ending 31 March 2004 or 2003, but is
     derived from these accounts. Statutory accounts for 2003 have been 
     delivered to the Registrar of Companies and those for 2004 will be 
     delivered following the Company's annual general meeting. The auditors have 
     reported on these accounts, their reports were unqualified and did not 
     contain statements under the Companies Act 1985, s237(2) or (3).

     There have been no changes to the accounting policies of the Group as set 
     out in the Report and Accounts for the year ended 31 March 2003

2    DIVIDENDS

                                                        2004       2003
                                                       -------   --------
                                                       £'000      £'000

Interim dividend paid 4.5p (2003: 2.5p) per share      2,765      1,472
Final dividend proposed 5.5p (2003: 3.25p) per share   3,394      1,952
                                                       -------   --------
                                                       6,159      3,424
                                                       =======   ========

     
3    EARNINGS PER SHARE

The calculation of basic earnings per share is based on a profit of £7,454,000
(2003: £3,981,000) and a weighted average of 60,898,714 (2003: 58,671,471)
shares in issue.

                                                        2004       2003
                                                       -------   --------

Basic earnings per share                                12.2p       6.8p
Diluted earnings per share                              11.9p       6.6p
                                                       =======   ========


Diluted earnings per share assumes dilutive options and convertible loan notes
have been converted into ordinary shares. The calculations are as follows:

                                2004                      2003
                                ------                    ------
                       Profit           Shares   Profit           Shares
                                           No.                       No.
                        £'000              000    £'000              000

Basic earnings          7,454           60,899    3,981           58,671
Dilutive effects:
- Options                   -            1,591        -            1,103
- Loan notes                1              208       36              761
                            0
                        -------         --------  -------         --------
Diluted earnings        7,464           62,698    4,017           60,535
                        =======         ========  =======         ========


     
4    TURNOVER AND SEGMENTAL ANALYSIS

The activities of the Group divide into two segments: the Distribution Business,
which is responsible for obtaining new customers, and the Virtual Network
Business, which supplies airtime, gas, electricity and value added services to
those customers. All of its activities are carried out in the UK.


                                       2004             2003
                                -------------     ------------
                                      £'000            £'000
Virtual Network
Turnover                             79,004           55,187
Operating profit                     13,770            8,352
Net assets                           18,911           12,239
                                =============     ============
Distribution
Turnover                              2,824            2,849
Operating loss                       (3,490)          (3,112)
Net (liabilities)                    (5,897)          (1,363)
                                =============     ============



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