Final Results
Telecom Plus PLC
05 June 2007
TELECOM plus PLC
5 June 2007
Preliminary results for the year ended 31 March 2007
Telecom plus PLC, the UK's leading low-cost multi-utility supplier (gas,
electricity, telephony, internet), announces preliminary results for the year
ended 31 March 2007.
Financial and business highlights:
• Turnover up 29% to £176m (2006: £136m)
• Profit before tax of £11.6m (2006: loss £1.6m)
• Net cash balance increased by £19.9m to £25.8m (2006: £5.9m)
• Final dividend of 6.0p (2006: 1.0p)
• Number of services provided increased 9% during the year to 542,039 (2006:
495,679)
• Number of independent distributors up 4% to 16,600
• Significant growth in Business Club customers to 6,388 (2006: 2,200)
Peter Nutting, Chairman, said:
'We are still the UK's only fully integrated provider of a wide range of
attractively priced utility services, with a distribution channel of proven
ability in cost effectively gathering high quality new customers each month,
which gives us a considerable competitive advantage in the domestic market. We
also now have good earnings visibility following the elimination of our previous
exposure to price fluctuations in the wholesale energy markets.
'We therefore remain confident that the current year will see further progress
in the development of our business, and in the continuing delivery of
satisfactory results.'
For press enquiries, please contact:
Charles Wigoder/ Richard Hateley Neil Boom
Telecom plus PLC Gresham PR Ltd.
020 8955 5000 020 7404 9000
CHAIRMAN'S STATEMENT
I am delighted to report a year of record turnover and profits for the Company.
We achieved pre-tax profits of £11.6m (2006: £1.6m loss) on turnover which
increased by 29% to £176m (2006: £136m). This substantial increase in turnover
was driven by the favourable combination of higher energy prices together with
an increase in the number of services provided to our customers.
Our cash balances increased by almost £20m during the year to just under £26m, a
level which is substantially greater than we need to meet our forecast working
capital requirements. Shareholders may recall that we raised approximately £10m
through a share placing in May 2005, when we needed a stronger balance sheet to
support our wholesale energy commitments during a period of rising prices and
greater volatility in the wholesale markets. As a result of the transaction we
announced in February 2006, these requirements are now substantially the
responsibility of npower. We are therefore seeking authority at the forthcoming
AGM to reduce our share premium account, in order to increase our distributable
reserves and enable us to repurchase our shares in the market. The directors
intend to consider making such purchases if, in the light of market conditions
prevailing at that time, the directors believe that such purchases would
increase earnings per share and would be for the benefit of the shareholders
generally.
We have made good progress in developing our distribution channel, with a net
increase of around 600 new independent distributors over the year, taking the
total to around 16,600. We anticipate a further steady increase during the
current year as we continue to invest significant resources in supporting our
channel. An important development during the year was the launch of a new
recruitment DVD 'What's it all about?' We also improved and simplified the bonus
structure for new distributors in the Autumn, and this has clearly been a factor
(together with the new DVD) behind the increased recruitment activity we have
seen over the last 6 months.
Customer numbers overall remained broadly stable over the year; however this
headline figure masks several important trends. Firstly, although the number of
residential customers fell slightly to 208,444, the quality of the customer base
has continued to improve, with the average number of services taken by each
member increasing to 2.95 (2006: 2.76). Secondly, our Business Club (which we
launched about 18 months ago) has seen significant growth over the year, with
customer numbers increasing to 6,388 (2006: 2,200). It is particularly
encouraging that members of our Business Club not only take multiple services,
but also have higher average revenues and lower churn than domestic customers.
Thirdly, the proportion of our residential customers who are now members of our
Discount Club (and are thus eligible to take advantage of our new 'Free UK Calls
' multi-service discount) has increased to 72% (2006: 66%).
The lack of growth in residential customer numbers during the year was partly
due to our decision to wait until the latest technology for supporting high
speed low cost broadband ('LLU') had been installed in sufficient BT local
exchanges, and the inevitable teething problems associated with the introduction
of any new technology had been resolved. We feel this decision has been
vindicated by the highly publicised problems experienced by those companies who
launched their services earlier in the year. Our new BroadCall service (which
combines Line rental, Calls and High Speed Broadband in a single package) was
launched last Autumn and we expect this to account for an increasing proportion
of our turnover in coming years.
Our infrastructure and systems were originally developed to enable us to manage
a significantly larger number of customers than currently use our services,
which means we have the potential to benefit from considerable economies of
scale by growing our customer numbers. This is one of our key priorities for the
coming year.
Recent published surveys show we are generally held in high esteem by our
customers. We therefore intend to capitalise on this goodwill by encouraging
them to recommend us, through launching a 'friend get friend' programme later
this year. However before we can do so effectively we need to establish an
inbound tele-sales fulfilment team, so that potential new customers can sign up
for our services with the minimum of effort or inconvenience.
We are also establishing a specialist Home Movers team to help us retain a
higher proportion of those potential new customers who have moved into a
property where we were supplying the previous occupant.
I would like to thank our staff and distributors for the loyalty they have shown
and the considerable contribution they have made to the continued success of the
business.
Dividend
We are proposing a final dividend of 6p for the year (2006: 1p) making a total
for the year of 8p (2006:1p), which will be paid on 10 August 2007 to
shareholders on the register at the close of business on 13 July 2007 and is
subject to approval by shareholders at the Company's Annual General Meeting
which is being held on 11 July 2007. We intend to maintain a progressive
dividend policy in future.
Segmental reporting
There are two fundamentally different business activities carried out by the
Company. The first is the acquisition of new customers through our distribution
channel. The second is the administration, management and billing of all the
services we supply to our customer base. Historically we have referred to these
(perhaps somewhat confusingly) as our Distribution business and our Virtual
Network business respectively. In future, these will be referred to as our
Customer Acquisition business and our Customer Management business.
Last year, for the first time, we further subdivided our Customer Management
business between the supply of energy and telephony services, primarily in
recognition of the substantially different risk profiles associated with these
activities. In telephony, margins have always been highly predictable because of
the close association between the retail prices we charge and the wholesale
costs we incur, whereas in energy the margins are extremely volatile because
there is no relationship in the short term between prices in the wholesale and
retail markets. Following the transaction with npower which completed in March
2006, this difference no longer exists.
The highly integrated nature of our business, where we have a single billing and
customer service platform supporting all the services we provide, means it is
impossible to provide a meaningful result for each service as any allocation of
overhead between our energy and telephony supplies is wholly arbitrary. We have
therefore decided to present the figures for our Customer Management business in
future as a single segment, in line with the way in which the business is
actually managed internally. A breakdown of our turnover, split between the
different services we supply, is included in the Financial Review section of
these accounts.
Board of Directors
During the year under review we said goodbye to John Levin and Stephen Davis.
Richard Hateley was appointed Finance Director in addition to his
responsibilities as Company Secretary, and I am delighted to welcome Melvin
Lawson and Michael Pavia who have joined the Board as non executive directors.
They both bring very considerable commercial experience to our deliberations and
I am pleased Michael Pavia agreed to take over from me the chairmanship of the
Audit Committee.
Outlook
The current forward price curves for gas and electricity indicate that it is
unlikely there will be any further material reductions in retail energy prices
this Autumn, although our recently announced price reductions (in common with
all the other major energy suppliers) will have a small adverse impact on our
turnover for the coming year. Our gross energy margin (in percentage terms) is
expected to remain broadly unchanged, and we look forward to continuing to earn
a satisfactory contribution from supplying energy in future.
We are still the UK's only fully integrated provider of a wide range of
attractively priced utility services, with a distribution channel of proven
ability in cost effectively gathering high quality new customers each month,
which gives us a considerable competitive advantage in the domestic market. We
also now have good earnings visibility following the elimination of our previous
exposure to price fluctuations in the wholesale energy markets.
We therefore remain confident that the current year will see further progress in
the development of our business, and in the continuing delivery of satisfactory
results.
Peter Nutting
Chairman
5 June 2007
BUSINESS REVIEW
Performance
Overall performance for the year has been extremely encouraging in a number of
key respects:
• substantial growth in turnover;
• record Group profits;
• cash generation of £19.9m;
• growth in the number of distributors promoting our services;
• 9% increase in the number of services we provide;
• the successful launch of a new combined fixed telephony and internet
package ('BroadCall');
• 300% increase in membership of our Business Club.
In addition, the business has now been substantially de-risked following the
transaction with npower, which has ensured we can focus on our core strengths of
building and managing our customer base without the distraction of worrying
about seasonal weather variations or volatile wholesale energy markets. We are
now making a consistent positive margin from supplying energy, which is in line
with our expectations at the time the npower transaction was signed.
The overall number of domestic customers is little changed from the level we had
reached 12 months ago. This is partly due to our decision last Spring to delay
introducing our new BroadCall service, but also a result of the many confusing
offers being heavily promoted by our competitors, especially by a number of new
entrants to the telephony and internet markets, who are targeting customers with
promotions offering varying subsets of the range of services we provide together
(in some cases) with entertainment.
The Market
Our focus is on supplying a wide range of essential utility services (gas,
electricity, fixed telephony, mobile telephony and internet) to both domestic
and small business customers. These are substantial markets and represent a
considerable organic growth opportunity.
We remain however a small operator in a market dominated by the former monopoly
suppliers. Our unique position as the only integrated multi-utility supplier
provides us with a highly efficient cost-base, and enables us to combine good
service and competitive pricing with a single monthly bill for each customer.
The approximate size of the UK domestic market for the principal services we
provide is estimated at around £36.9bn as follows:
Number of Households Retail Market Value
Gas 20m £11.4bn
Electricity 25m £13.3bn
Home Phone - Calls 24m £3.7bn
Home Phone - Line Rental (Lines) 24m £2.7bn
Mobile (Excluding Pre-Pay) 15m £3.9bn
Broadband 10m £1.9bn
Retail market values based on average prices charged by us to customers for each
service during the year ended 31 March 2007.
We also provide a similar range of services to small and medium sized business
customers following the introduction of a new Business Club (the Utility
Warehouse Discount Club for Business) in August 2005.
Our Customers
The majority of our customers choose to take advantage of our multi-service
proposition, with over 72% having joined our Discount Club since its launch in
October 2003.
On average each member takes 2.95 services (2006: 2.76) with 80% taking 2 or
more services, and 52% taking 3 or more services. These figures are illustrated
by the analysis below, which demonstrates the effectiveness of our Club concept
in encouraging customers to subscribe for additional services:-
Members Non-Members
1 Service 20% 63%
2 Services 28% 25%
3 Services 19% 8%
4 Services 17% 3%
5 Services 13% 1%
6 Services 2% -
7 Services 1% -
Non-members relate to customers gathered prior to the launch of our Discount
Club in October 2003 who have not subsequently joined the Discount Club.
This growth in services has led to a further increase in average revenue per
customer, notwithstanding considerable price deflation in the fixed telephony
markets over the last 9 years.
Average Revenue
Year per Customer
1999 £190
2000 £286
2001 £316
2002 £329
2003 £459
2004 £482
2005 £505
2006 £634
2007 £801
We enjoy high levels of overall customer satisfaction, as evidenced by the
relatively low churn we experience. For example, our energy churn of around 2%
per month compares with an industry average of around 5% per month amongst
customers who have switched away from their original supplier.
Services
Our range of essential utility services includes fixed telephony (calls and line
rental), mobile telephony, gas, electricity and internet. At the year end we
supplied a total of 542,039 services (2006: 495,679), representing an increase
of over 9% during the course of the year.
2007 2006
Services:
Gas 98,095 86,379
Electricity 115,643 101,710
Home phone 158,896 169,990
Fixed line rental 71,557 40,519
Freephone 10,670 11,056
Mobile 40,418 45,197
Internet 46,760 40,828
Total 542,039 495,679
As can be seen from the above table, we experienced steady growth during the
year in the number of customers to whom we supply gas, electricity, internet and
fixed line rental. Our home phone and mobile services however experienced a
modest fall in customer numbers, reflecting increasing competition in these
areas of our business and our decision to delay responding to the premature
launch of new combined service packages by certain competitors last Spring.
Included within the above figures are over 6,300 members of our Business Club,
who are taking in aggregate almost 18,000 services and contributing £5.8m (2006:
£0.6m) to Group turnover. We are extremely encouraged by this strong
performance, and the continuing enthusiastic response of our Distribution
Channel to this opportunity. The substantial size of this market (there are over
1m home-based, small and medium sized businesses in the UK) gives us
considerable confidence that this will make a significant contribution to the
Group in due course.
Customer Service
We pride ourselves in offering first class customer service through a single
call centre, based in the UK. Our policy is to try and ensure that the first
person a customer speaks to is able to resolve all their issues, irrespective of
how many different services we are providing to them.
We continue to invest in improving our customer service resources, and have
developed specialist teams capable of dealing with some of the more complicated
problems which can arise due to inefficiencies in the industry standard
processes for switching customers between suppliers. We are also developing our
range of qualitative and quantitative performance measurement tools for our Call
Centre, so that we can continue to improve the overall quality of our members'
customer service experience.
Our People
We rely on the combined efforts of around 265 employees to manage relationships
with both our customers and distributors, and deliver a consistently high
quality of service at all times. We pay considerable attention to recruiting and
retaining appropriate people.
The Company operates an Inland Revenue-approved employee share option scheme,
under which employees are granted an option to purchase shares in the Company
between 3 and 7 years from the date of grant. The exercise price is the market
price at the time of granting the option. Our policy is to issue options to all
employees after the satisfactory completion of their probationary period,
without any performance conditions being attached to the exercise thereof. As at
31 March 2007, there were outstanding options over 1,110,500 shares which had
been granted to staff, representing approximately 2% of the issued share capital
of the Company.
During the coming year, the Company intends to introduce an employee Share
Incentive Plan ('SIP') which will enable all employees to build a shareholding
in the Company in a tax effective manner. Employees will be able to contribute
up to £1,500 per year to the SIP and the Company will purchase matching shares
on a 2:1 basis, which participating employees will receive free of charge
provided they remain a member of the SIP for the period designated by the rules
of the scheme. The introduction of the SIP is subject to the approval of
shareholders at the forthcoming AGM.
The Company has also recently created space at its premises for a creche, which
is subsidised by the Company, and intended to make it easier for mothers with
very young children to resume their careers.
We also encourage all employees to participate in a stakeholder pension scheme
operated by Legal & General. Participants can choose their own contribution
level which is matched by the Company within certain limits, depending on length
of service.
Our Distributors
Our distributors remain one of our key strengths. In contrast to other utility
suppliers, the alignment of financial interests provided by our revenue sharing
model ensures that our distributors focus their activities on finding
credit-worthy and high spending customers who will reap the maximum savings from
using our services, and will thus be least likely to churn. By doing so, they
maximise their own long-term returns.
During the Autumn, we simplified the payment structure covering the bonuses
available to new distributors, giving them the opportunity to earn a bonus of
£200 (equal to their original joining fee) by gathering a minimum of 12 new
customers within their first 90 days.
Our Car Plan, which provides eligible distributors with a subsidised
fully-branded Mini remains extremely popular, and we have now supplied almost 70
cars. Owners find these helpful in raising their local profile, resulting in
enquiries from both potential new customers and distributors, and we are
currently considering how we can extend this programme to bring it within reach
of a substantially larger number of distributors.
Distributors have seen a considerable increase in their average earnings from
each customer during the last 2 years as a result of the growth in the number of
services taken combined with sharply higher energy prices. Whilst there remains
scope for some further modest rises as the average number of services taken
continues to increase, distributors will now need to achieve consistent growth
in their personal and Group customer numbers in order to obtain a meaningful
increase in their current earnings as a distributor. Our unique market position
continues to make this predominantly part-time career extremely attractive to
potential new recruits.
Our national training programme has been further enhanced during the year, with
the introduction of a full-day training course for new distributors, which
replaced the previous two half-day sessions. We also have training modules to
support our Business Club (including the supply of Commercial Energy and the
increasing popularity of BlackBerrys), and a Personal Development Programme to
provide our next generation of leaders with the additional skills they will
need.
The Environment
The environment is becoming an increasingly important concern and we participate
in programmes to help reduce the environmental impact of our activities.
We operate an energy efficiency helpline to provide advice on how customers can
reduce their energy usage, and we also participate actively in the 'Shred-it'
recycling programme, with a certificated saving of 70 trees during 2006.
Principal Risks
The Group faces various risk factors, both internal and external, which could
have a material impact on long-term performance.
Reputation risk
Telecom Plus' reputation amongst our business partners, suppliers, shareholders
and customers is fundamental to the future success of the Group. Failure to meet
expectations in terms of the services we provide, the way that we do business or
in our financial performance could have a material effect on the Group. These
risks are mitigated through our focus on quality customer service, the training
of our staff and our systems of internal control and risk management.
Wholesale prices
The Company does not currently own or operate any network infrastructure itself,
choosing instead to purchase the capacity needed from third parties. The
advantage of this approach is that the Company is not exposed to either
technological risk, capacity risk or the risk of obsolescence, as it can
purchase each month the exact amount of each service required to meet its
customers' needs.
Whilst there is a theoretical risk that in some of the areas in which the
Company 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). The profile of
our customers combined with our clearly differentiated route to market has
historically proven attractive to potential partners, who compete aggressively
in order to secure a share of our business.
The supply of energy, which has been accounting for an increasing proportion of
our sales each year, has different risks associated with it. The wholesale price
can be extremely volatile, and customer demand can be subject to considerable
short term fluctuations depending on the weather. These issues caused the
Company to incur substantial losses during the Autumn of 2005, hence our
decision to seek a relationship with a larger energy supplier which preserved
our integrated multi-utility business model whilst passing the substantive risks
and rewards of hedging and buying energy to them. The transaction with npower
which was completed on 31 March 2006 achieved these objectives, and has enabled
the Company to earn a positive contribution from providing energy since that
date. It also removed the need for the Company to tie up valuable capital to
support forward positions in the wholesale energy markets which would otherwise
have been required.
Bad Debt Risk on Energy Customers
The Company has a universal supply obligation in relation to the provision of
energy to domestic customers. This means that although the Company is entitled
to request a reasonable deposit from potential new customers who are not
considered credit worthy, the Company is obliged to supply domestic energy to
everyone who submits a properly completed application form. Where customers
subsequently fail to pay for the energy they have used ('Delinquent Customers'),
there is likely to be a considerable delay before the Company is able to
eliminate 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 Customers from increasing their indebtedness are not
always recoverable.
Bad Debt Risk on Telephony Customers
There is regular fraud within the telephony industry which arises from customers
using the services without intending to pay their supplier for the calls they
have made. Although the amounts involved are generally small, larger scale fraud
is sometimes attempted involving calls to premium rate and/or international
destinations. The Company has sophisticated systems to prevent material losses
arising as a result of such fraud by processing all call traffic on an hourly or
daily basis, and promptly disconnecting any number whose usage profile appears
to be suspicious, although there can occasionally be a delay in receiving the
necessary information from our network partners.
Competitive risk
The Group operates in highly competitive markets and significant product
innovations or increased price competition could affect our margins. In order to
maintain our competitive position, we constantly focus on ways of improving our
operating efficiency and keeping our cost base as low as possible.
Legislation and regulatory risk
The Group is subject to varying laws and regulations, including possible adverse
effects from European regulatory intervention.
Risk management
The business 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
and prioritised, and systems of control are in place to manage such risks.
Charles Wigoder
Chief Executive
5 June 2007
FINANCIAL REVIEW
OVERVIEW
Revenues of £176m (2006: £136m) were 29% higher than in the previous financial
year to 31 March 2006. The pre-tax profit was £11.6 compared with £0.2m (before
the exceptional charge of £1.9m in respect of reorganising the energy business)
in the last financial year. This increase in profitability together with the
final unwinding of our historic energy purchasing commitments following the
transfer of buying responsibility to npower created a net cash inflow from
operating activities of £20.8m. Our year end net cash position increased by
£19.9 million from £5.9m to £25.8m.
The increase in operating profits (from a loss in 2006 of £0.7m before
exceptional costs to a profit of £10m this year) was primarily due to the
elimination of the losses we incurred in our gas business during the Winter of
2005/06, which resulted from unprecedented volatility and record prices in the
wholesale energy markets during the late Autumn of that year.
Customer Management
The growth in revenue during the year was due mainly to an increase in the
number of services supplied to customers combined with increases in the energy
prices we charged.
Margins in our Customer Management business improved from 2% to 7.5% due to the
absence of the exceptional gas losses incurred during our last financial year.
As expected, this margin is substantially lower than the 12% operating margin
achieved during 2005, due to the substantial change in our sales mix, where a
growing proportion of our turnover now relates to energy, internet and line
rental, all of which have significantly lower margins than fixed and mobile call
revenues.
Customer Acquisition
The net cost in respect of our Customer Acquisition business reduced during the
year to £3.1m (2006: £3.5m). This was mainly due to a small reduction in the
number of new customers joining us during the year, combined with a reduction in
some of the third party charges we incur (e.g. Broadband connection charges from
BT) when we connect new customers to our services.
Operating Expenses
Operating expenses before exceptional items have increased during the year from
£19.5m to £24.9m. The principal elements of this are higher commission payments
to our distributors, an increase in our bad debt charge (in line with the growth
in turnover), and the costs associated with supplying energy to Delinquent
Customers. There have also been extra costs resulting from our decision to
increase the number of staff we employ to an average of 241 during the year
(2006: 211), which has enabled us to improve the quality of our customer service
and enhance the strength of the management team.
Share Option Costs
The operating loss is stated after share option expenses of £425,000 (2006:
£434,000). These expenses relate to an accounting charge under IFRS 2 'Share
based payments'.
Taxation
The amount of corporation tax payable in respect of the year is £3.6m (2006:
£13,000).
Cash Flow
This pre-tax profit of £11.6m together with the final unwinding of our historic
energy purchasing commitments following the transfer of buying responsibility to
npower, resulted in a net cash inflow from operating activities of £20.8m (2006
outflow £9.7m) and our net cash position increased at the year end by £19.9
million from £5.9m to £25.8m.
The March cash position is also (and will continue to be) adversely affected by
energy customers who pay by Budget Plan, where the high proportion of annual
energy consumption used during the Winter period means that our energy debtors
reach a peak at the end of each Winter before falling as we move through the
Spring and Summer months. It should, however, be noted that following a
particularly mild Winter this year, customer budget plan deficits were on
average significantly below the levels which would normally be expected at this
time of year, which has had a positive impact of around £10m on the Company's
cash position at the year end.
The current year will benefit from the repayment of the £2m loan to Oxford Power
Holdings Ltd, which is due to be received on 31 December 2007.
The Group does not have a policy with respect to interest rate management as it
currently has no debt funding requirements. Cash surpluses are placed on
deposit.
Richard Hateley
Finance Director
5 June 2007
TELECOM plus PLC
Consolidated income statement
For the year ended 31 March 2007
2007 2006
Note £'000 £'000
Revenue 1 176,065 136,343
Cost of sales 141,136 117,603
Gross profit 34,929 18,740
Distribution expenses 8,327 7,810
Administrative expenses 16,584 11,659
Operating profit/(loss) before exceptional costs 10,018 (729)
Exceptional costs in respect of restructuring the energy business - (1,860)
Operating profit/(loss) 10,018 (2,589)
Financial income 1,105 641
Financial expenses 6 39
Net financial income 1,099 602
Share of profit of associates 473 343
Profit/(loss) before taxation 11,590 (1,644)
Taxation (2,982) 263
Profit/(loss) for the year 8,608 (1,381)
Basic earnings/(loss) per share 2 12.5p (2.1p)
Diluted earnings/(loss) per share 2 12.5p (2.1p)
TELECOM plus PLC
Statement of recognised income and expense
For the year ended 31 March 2007
Group
2007 2006
£'000 £'000
Profit/(loss) for the year 8,608 (1,381)
Deferred tax on share options recognised directly in equity 18 (11)
Total recognised income and expense for the year 8,626 (1,392)
TELECOM plus PLC
Balance Sheet
As at 31 March 2007
Group
2007 2006
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 884 1,016
Goodwill and intangible assets 3,761 3,894
Investments in associates 1,422 940
Deferred tax 904 509
Other receivables 858 2,954
Total non-current assets 7,829 9,313
Current assets
Inventories 202 512
Trade and other receivables 3,258 4,951
Prepayments and accrued income 28,649 25,078
Cash and cash equivalents 25,801 5,888
Total current assets 57,910 36,429
Total assets 65,739 45,742
Current liabilities
Trade and other payables 3,727 5,906
Current tax payable 1,969 12
Accrued expenses and deferred income 27,695 14,869
Total current liabilities 33,391 20,787
Total assets less total liabilities 32,348 24,955
Equity
Share capital 3,446 3,421
Share premium 19,444 19,065
Retained earnings 9,458 2,469
Total equity 32,348 24,955
These accounts were approved and authorised for issue by the Board on 5 June
2007.
Charles Wigoder Director
Richard Hateley Director
TELECOM plus PLC
Cash Flow Statement
Year ended 31 March 2007
Group
2007 2006
£'000 £'000
Operating activities
Operating profit/(loss) 10,018 (2,589)
Depreciation of property, plant and equipment 447 445
Amortisation of intangible assets 133 131
Profit on disposal of property, plant and equipment (44) (282)
Decrease in inventories 310 622
Decrease/(increase) in trade and other receivables 218 (14,266)
Increase in trade and other payables 10,647 7,439
Repayment of inter-company receivable - -
Costs attributed to the issue of share options 425 434
Corporation tax paid (1,402) (1,601)
Net cash flow from operating activities 20,752 (9,667)
Investing activities
Investment in associates (9) -
Purchase of property, plant and equipment (341) (484)
Sale of property, plant and equipment 70 1,028
Cash flow from investing activities (280) 544
Financing activities
Dividends paid (2,062) (4,099)
Interest received 1,105 641
Interest paid (6) (39)
Issue of ordinary shares 404 12,233
Cash flow from financing activities (559) 8,736
Increase/(decrease) in cash and cash equivalents 19,913 (387)
Cash and cash equivalents at the beginning of the year 5,888 6,275
Cash and cash equivalents at the end of the year 25,801 5,888
TELECOM plus PLC
NOTES
1. TURNOVER AND SEGMENTAL ANALYSIS
For management reporting purposes, the Group is currently organised into two
operating divisions:
Customer Management; and
Customer Acquisition.
These divisions are the basis on which the Group reports its primary segmental
information.
Business segments
Year ended 31 March 2007 Year ended 31 March 2006
Customer Customer Total Customer Customer Total
Management Acquisition Management Acquisition
£'000 £'000 £'000 £'000 £'000 £'000
Revenue:
External sales 173,735 2,330 176,065 133,877 2,466 136,343
Segment result 13,107 (3,089) 10,018 2,762 (3,491) (729)
Operating profit/(loss) before 10,018 (729)
exceptional items
Exceptional costs in respect of - (1,860)
restructuring the energy business
Operating profit/(loss) 10,018 (2,589)
Net financing income 1,099 602
Share of profit of associates 473 343
Taxation (2,982) 263
Profit/(loss) for the year 8,608 (1,381)
Segment assets 63,008 1,309 64,317 43,600 1,202 44,802
Investment in equity method associates 1,422 - 1,422 940 - 940
Total assets 64,430 1,309 65,739 44,540 1,202 45,742
Segment liabilities (33,079) (312) (33,391) (18,111) (2,676) (20,787)
Capital expenditure 336 5 341 484 - 484
Depreciation and amortisation 572 8 580 576 - 576
The share of profit of associates relates to the 'Customer Management' business
segment.
All turnover is derived in the United Kingdom and substantially arises from the
provision of services.
2. BASIC EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share
The calculation of basic earnings per share at 31 March 2007 was based on the
profit attributable to ordinary shareholders of £8,608,000 (2006: loss
£1,381,000) and a weighted average number of ordinary shares outstanding during
the year ended 31 March 2007 of 68,606,607 (2006 67,170,166).
2007 2006
Basic earnings/(loss) per share 12.5p (2.1)p
Diluted earnings/(loss) per share 12.5p (2.1)p
Diluted earnings/(loss) per share
Diluted earnings/(loss) per share assumes dilutive options have been converted
into ordinary shares. The calculations are as follows:
2007 2006
Profit Number of Profit Number of
£'000 shares '000 £'000 shares '000
Basic earnings/(loss) 8,608 68,607 (1,381) 67,170
Dilutive effects - Options 171 - -
Diluted earnings/(loss) 8,608 68,778 (1,381) 67,170
The share options may be dilutive in future periods.
3. The financial information set out above does not constitute the Group's
statutory information for the years ended 31 March 2007 or 2006, but is derived
from these accounts. Statutory accounts for 2006 have been delivered to the
Registrar of Companies and those for 2007 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).
This information is provided by RNS
The company news service from the London Stock Exchange D
FR EANKLEAXXEFE
Latest directors dealings
- 2 hours ago Alphawave IP Group
- 3 hours ago WH Smith
- 4 hours ago Staffline Group
- 4 hours ago Manchester & London Investment Trust
- 4 hours ago Associated British Foods