Interim Management Statement

RNS Number : 2950P
Telecom Plus PLC
14 July 2010
 



14 July 2010

 

 

Telecom plus PLC (the "Company")

 

Interim Management Statement

 

 

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 internet) to both residential and business customers, is issuing its Interim Management Statement to cover the period from 1 April 2010 to 13 July 2010. This incorporates information relating to the performance of the business for its first quarter ended 30 June 2010, to coincide with its Annual General Meeting (""AGM") being held later today.

 

Highlights

 

·           Encouraging organic growth

·           Significant improvement in customer quality

·           Customer numbers up by 5,680 during the quarter to 351,442 (30 June 2009: 312,652)

·           Number of services up by 30,847 during the quarter to 1,075,363 (30 June 2009: 908,882)

 

Operating Review

 

During the first quarter, customer numbers increased by 5,680 to 351,442 (30 June 2009: 312,652), representing an increase of more than 12% compared with the same stage last year. The number of services provided rose by almost 31,000 to 1,075,363 (30 June 2009: 908,882) representing an increase of 18% over the last 12 months. These figures clearly demonstrate the robust nature of our business model in the current difficult economic climate, notwithstanding the fact that the period included Easter and two May bank holiday weekends which are usually relatively quiet periods for gathering new customers.

 

The enhanced focus on customer quality within the residential discount club (which started last summer) has seen a significant improvement in the average number of services taken by each member, which increased from 3.28 to 3.32 during the quarter (30 June 2009: 3.13). Of particular note, the penetration of Cashback cards within our residential club has increased from 7% to 17% over the last 12 months.

 

We saw a net increase of around 800 distributors during the quarter, taking the total to just under 36,000. Activity levels are comfortably ahead of the levels seen during the previous quarter, following the successful distributor sales conference held in April and the launch of our new web-based training programme.

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer, Distributor and Service Numbers

 

Telecom Plus Group


FY11

FY10




Q1

Q4

Q3

Q2

Q1









Distributors


        35,832

        34,992

        33,544

        31,852

        29,789









Customers


               






Residential Club


      275,097

      269,893

      265,143

      256,263

      242,779


Business Club


        22,259

        21,523

        20,479

        19,137

        17,809


Total Club


      297,356

      291,416

      285,622

      275,400

      260,588


Non Club


        42,821

        42,276

        41,871

        41,988

        41,772


Total Telecom Plus


      340,177

      333,692

      327,493

      317,388

      302,360


TML


        11,265

        12,070

        11,912

        11,140

        10,292


Total Group


      351,442

      345,762

      339,405

      328,528

      312,652









Services








Electricity


      274,519

      267,186

      259,853

      248,169

      231,207


Gas


      230,251

      224,256

      218,359

      208,663

      195,013


Fixed Telephony


      212,656

      211,565

      207,934

      203,025

      195,745


Fixed Line Rental


      156,611

      153,074

      147,970

      143,400

      134,193


Broadband


      102,835

        98,595

        93,982

        90,685

        83,687


Mobile


        35,360

        34,067

        34,961

        35,610

        35,951


Cashback card


        46,814

        39,433

        32,818

        24,468

        17,262


Non Geographic numbers


        16,317

        16,340

        16,168

        16,068

        15,824


Total Group


    1,075,363

    1,044,516

    1,012,045

      970,088

      908,882










Residential Club


      913,537

      883,904

      854,106

      815,933

      760,009


Business Club


        54,685

        52,949

        50,182

        47,012

        43,528


Total Club


      968,222

      936,853

      904,288

      862,945

      803,537


Non Club


        70,712

        69,855

        69,871

        70,460

        70,063


Total Telecom Plus


    1,038,934

    1,006,708

      974,159

      933,405

      873,600


TML


        36,429

        37,808

        37,886

        36,683

        35,282


Total Group


    1,075,363

    1,044,516

    1,012,045

      970,088

      908,882









 

Cash Flow

 

Underlying cash flow remains in line with management expectations, following the coldest UK winter in more than 30 years. As the net debtor balance relating to customers paying for their energy by budget plan starts to reverse over the next few months, we anticipate that our cash balance as at 30 June 2010 of approximately £1.0m (31 March 2010: £2.5m) will improve significantly by 30 September 2010, notwithstanding the £9.6m cost of paying the proposed final dividend for last year which is expected to be made on the 6 August 2010.

 

The Company has sufficient banking facilities available to meet any reasonably foreseeable increase in our working capital requirements resulting from our anticipated growth, higher energy prices and/or another cold winter.

 

 

 

 

 

 

Outlook

 

We anticipate steady organic growth over the coming months in the numbers of customers, distributors and services we supply, driven by continuing strong demand for our unique multi-utility proposition and the other valuable benefits we provide to our members.

 

We reduced our energy tariffs on 1 April 2010 in line with the market; however, the upward movement in the forward wholesale price curves for both gas and electricity over the last few months suggest we are unlikely to see any further reductions this year.

 

Our financial performance since the year end has been in line with market expectations, and we anticipate that our half yearly report will show earnings and pre-tax profits significantly ahead of the figures for the comparable period last year.  

 

It remains our intention, in the absence of unforeseen circumstances, to recommend a maintained total dividend of 22p for the current year.

 

Half Yearly Report

 

Our half yearly report for the six months ending 30 September 2010 is expected to be announced on 23 November 2010.

 

Charles Wigoder, Chief Executive said:

 

"Our focus on customer quality within the residential discount club has seen a significant improvement in the average number of services taken by each member, which increased from 3.27 to 3.32 during the quarter. Of particular note, the penetration of Cashback cards within our residential club has increased from 7% to 17% over the last 12 months."

 

"We anticipate steady organic growth over the coming months in the numbers of customers, distributors and services we supply, driven by continuing strong demand for our unique multi-utility proposition and the other valuable benefits we provide to our members."

 

 

For more information please contact:

 

Telecom plus PLC

Charles Wigoder, Chief Executive                                                                020 8955 5000

Chris Houghton, Finance Director    

                          

KBC Peel Hunt

Richard Kauffer / Dan Webster                                                                     020 7418 8900

 

Brewin Dolphin

Richard Jones                                                                                               0845 059 6740

 

Hogarth

Reg Hoare                                                                                                      020 7357 9477

 

About Telecom plus PLC:

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 in order to grow its market share.

 

Telecom plus also has a wholly owned subsidiary called TML purchased in 2002, which supplies predominantly fixed line telephony to small and medium sized business customers through a network of authorised resellers and dealers.

 

Telecom plus is listed on the London Stock Exchange (Ticker: TEP LN).  For further information please visit: www.telecomplus.co.uk.


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