Interim Results

Telecom Plus PLC
10 December 2002


                                TELECOM plus PLC


10 December 2002

        Interim results for the half year ended 30 September 2002

Telecom plus plc, the UK's best value multi-utility (gas, electricity,
telephony, internet), announces interim results for the half year ended 30
September 2002.

Financial and business highlights:

  • Interim dividend increased to 2.5p (2001: 2.0p)

  • Pre-tax profit up 25% to £2.5m (2001: £2.0m)

  • Turnover increased to £25.4m (2001: £14.6m)

  • TML, acquired on 1 June 2002, already contributing £0.1m to pre-tax profit

  • Customer numbers increased by 12,000 in the period to 108,000

  • Number of services provided increased to 184,000 (2001: 134,000)

  • Strategic investment in Oxford Power Holdings Ltd ('Opus')



Commenting on the recent trading, Chairman Peter Nutting, said:

'Since 30 September 2002, the rate of new customer growth within our core
Telecom plus business has seen a further increase, as our distribution channel
becomes increasingly experienced at promoting the benefits of our multi-service
package to potential new customers.  We have also seen a healthy increase in the
number of new distributors joining the business.

The outlook for our growth and profitability remains highly encouraging, and the
directors expect to be able to maintain the progressive dividend policy that was
indicated when we obtained our Listing in July 2000. We remain strongly
positioned as the UK's first low cost multi-service utility company and my Board
colleagues and I look forward to the future with considerable confidence.'

For press enquiries, please contact:

Charles Wigoder                                       Neil Boom/Theresa Forrest
Telecom plus PLC                                      Gresham PR
020 8955 5000                                         020 7404 9000


                           TELECOM plus PLC
                         CHAIRMAN'S STATEMENT


I am pleased to report another strong set of results.  We have enjoyed a
substantial increase in customer numbers, in revenues, in services, and in
profits compared with the corresponding period last year.  As a result, we have
decided to increase the level of the interim dividend.

In the six months under review pre-tax profits have increased by 25% to £2.5m
(2001: £2.0m).  These group pre-tax profits of £2.5m reflect a substantially
improved operating profit within our Virtual Network business of £3.6m  (2001:
£2.7m) together with a small initial contribution from TML of £0.1m, and have
been achieved despite higher costs in our Distribution business of £1.3m (2001:
£0.8m) due to an increase in the number of new customers taking our services.

Within Telecom plus, the improvements in growth which we reported during the
second half of last year have been maintained.  We experienced net growth of
around 12,000 customers during the period, taking our total customer base to
approximately 108,000 at the end of September 2002.  The number of services
being provided has increased to 184,000 (2001: 134,000).  The benefit from
investing in these new customers will be reflected in the performance of our
Virtual Network business during the remainder of the current financial year.

The integration of TML which we acquired on 1 June 2002 is progressing well, and
this business is no longer loss-making.  The TML dealer channel has responded
positively to the change of ownership, and the levels of new business being
generated are encouraging.  We currently have over 6,500 business customers
within TML.

Reflecting the strength of these results and the future prospects of our
business, the Board has decided to pay an increased interim dividend of 2.5p
(2001: 2.0p) per share.  This Interim dividend will be paid on 3 February 2003
to shareholders on the register at 20 December 2002.  Depending on the Company's
financial performance during the remainder of the current financial year, the
Board intends to recommend an increased final dividend of not less than 3p per
share, making a total of not less than 5.5p per share for the current financial
year.


Strategic Investment

Telecom plus has recently entered into a strategic partnership with Oxford Power
Holdings Ltd and its wholly owned subsidiary Opus Energy Ltd ('Opus'), a new
independent supplier of electricity to commercial and industrial customers.
Under these arrangements, Opus will assist Telecom plus in obtaining GEMSERV and
ELEXON accreditation as a supplier in our own right, and in the meantime will
provide electricity to Telecom plus under attractive commercial terms.  As part
of this agreement, Telecom plus has agreed to invest £1m in Opus for a minority
shareholding and to provide a further £2m of working capital in the form of a
secured loan.  This investment is being satisfied in cash out of the Company's
existing resources.

This investment strengthens our competitive position in the energy marketplace
by providing access to the wholesale markets for electricity.  It is also
expected to generate improved operational efficiencies within our electricity
supply business due to the higher level of system integration which we
anticipate achieving with Opus compared with our current supplier.


Outlook

Since 30 September 2002, the rate of new customer growth within our core Telecom
plus business has seen a further increase, as our distribution channel becomes
increasingly experienced at promoting the benefits of our multi-service package
to potential new customers.  We have also seen a healthy increase in the number
of new distributors joining the business.

If the current levels of growth continue, we will achieve a customer base of
more than 120,000 customers by 31 March 2003, which would represent an increase
in our customer base of over 25,000 during the course of the current financial
year (year to 31 March 2002: 10,000).

As mentioned above, the integration of TML is proceeding well, and all
administration and billing is now centralised at our North London premises.
Although TML is now trading profitably, its contribution during the rest of the
current financial year will be partially offset by the redundancy and other one
off charges associated with the relocation and integration of this business.

The outlook for our growth and profitability remains highly encouraging, and the
directors expect to be able to maintain the progressive dividend policy that was
indicated when we obtained our Listing in July 2000.

Like most businesses we are dependent on the efforts and loyalty of our
personnel and I would like once again to thank our staff and our distributors
for their hard work and enormous contribution during a period of continuing
change and rapid growth for the business.  We remain strongly positioned as the
UK's first low cost multi-service utility company and my Board colleagues and I
look forward to the future with considerable confidence.


Peter Nutting
Chairman
9 December 2002




                                TELECOM plus PLC
                             Profit & Loss Account


                                                                             
                 Acquisitions     Other      6 months     6 months       Year 
                               Continuing       ended        ended      ended 
                               Operations          30           30   31 March 
                                            September    September            
                                                 2002         2001       2002 
                                           (unaudited)  (unaudited)  (audited)
                       £'000       £'000        £'000        £'000      £'000 
                                                                              
  Turnover             5,490      19,949       25,439       14,644     32,677  
                                                                              
  Cost of             (4,014)    (12,941)     (16,955)      (8,771)   (20,460) 
  sales                                                                       
                                                                              
  Gross profit         1,476       7,008        8,484        5,873     12,217  
                                                                              
  Sales and             (554)     (1,454)      (2,008)      (1,050)    (2,703) 
  marketing                                                                   
  costs                                                                       
                                                                              
  Administrative        (824)     (3,297)      (4,121)      (2,949)    (5,819) 
   expenses                                                                  
                                                                              
  Operating               98       2,257        2,355        1,874      3,695  
  profit                                                                      
                                                                              
  Interest                                        273          262        529  
  receivable                                                                  
                                                                              
  Interest                                        (82)        (103)      (189) 
  payable                                                                     
                                                                              
  Profit                                        2,546        2,033      4,035  
  before                                                                      
  taxation                                                                    
                                                                              
  Taxation                                       (665)        (565)    (1,080) 
                                                                              
  Profit after                                  1,881        1,468      2,955  
  taxation                                                                    
                                                                              
  Dividends                                    (1,469)      (1,092)    (2,534) 
                                                                              
  Retained                                        412          376        421  
  profit                                                                      
                                                                              
  Basic                                           3.2p         2.7p       5.4p 
  earnings per                                                                
  ordinary                                                                    
  share                                                                       
                                                                              
  Diluted                                         3.1p         2.6p       5.2p 
  earnings per                                                                
  ordinary                                                                    
  share                                                                       
                                                                              
  Dividend per                                    2.5p         2.0p       4.5p 
  share                                                                       
 

                                  TELECOM plus PLC 
                                 Segmental Analysis 
 
                                                                              
                      Acquisitions         Other Continuing Operations        
                                                                              
                          4 months        6 months       6 months        Year 
                             ended           ended          ended       ended 
                      30 September    30 September   30 September    31 March 
                              2002            2002           2001        2002 
                             £'000           £'000          £'000       £'000 
                                                                              
  Virtual Network                                                             
  Turnover                    5362         18,810         13,840      30,181  
  Operating costs          (5,140)        (15,257)       (11,131)    (24,291) 
  Operating profit            222           3,553          2,709       5,890  
                                                                            
                                                                              
  Distribution                                                                
  Turnover                     128          1,139            804       2,496  
  Operating costs            (252)         (2,435)        (1,639)     (4,691) 
  Operating loss             (124)         (1,296)          (835)     (2,195) 
                                                                              
                                                                              
  Total                                                                       
  Turnover                  5,490          19,949         14,644      32,677  
  Operating costs          (5,392)        (17,692)       (12,770)    (28,982) 
  Operating profit             98           2,257          1,874       3,695  
                                                                              
 

                                  TELECOM plus PLC 
                                    Balance Sheet 
 
                                                                              
                                           As at           As at        As at 
                                    30 September    30 September     31 March 
                                            2002            2001         2002 
                                     (unaudited)     (unaudited)    (audited) 
                                                                              
                                           £'000           £'000        £'000 
                                                                              
  FIXED ASSETS                                                                
  Tangible assets                         1,973           2,047        2,026  
  Goodwill                                4,169                -            - 
                                          6,142           2,047        2,026  
                                                                              
  CURRENT ASSETS                                                              
  Stocks                                    645           1,680        1,327  
  Debtors                                 9,367           3,320        4,637  
  Investments in quoted loan              2,541           1,302        2,541  
  securities                                                                  
  Cash at bank and in hand                5,094           8,917        8,421  
                                         17,647          15,219       16,926  
                                                                              
  CREDITORS                                                                   
  Amounts falling due within            (12,800)         (7,194)      (8,411) 
  one year                                                                    
                                                                              
  NET CURRENT ASSETS                      4,847           8,025        8,515  
                                                                              
  TOTAL ASSETS LESS CURRENT              10,989          10,072       10,541  
  LIABILITIES                                                                 
                                                                              
  CREDITORS                                                                   
  Amounts falling due after                (851)         (1,936)      (1,560) 
  more than one year                                                          
                                         10,138           8,136        8,981  
                                                                              
  CAPITAL AND RESERVES                                                        
  Called up share capital                 2,939           2,731        2,862  
  Share premium account                   5,326           3,989        4,658  
  Profit and loss account                 1,873           1,416        1,461  
                                                                              
  Shareholders' funds                    10,138           8,136        8,981  
                                                                              
  These unaudited results do not amount to statutory accounts within the
  meaning of section 240 of the Companies Act 1985. 
 
  The results for the year ended 31 March 2002 have been extracted from the
  full statutory accounts for that period, which have been delivered to the
  Registrar of Companies and on which the auditors gave an unqualified report. 
 

                                TELECOM plus PLC 
                               Cash Flow Statement 
 
                                                                             
                                        6 months        6 months         Year 
                                           ended           ended        ended 
                                    30 September    30 September     31 March 
                                            2002            2001         2002 
                                     (unaudited)     (unaudited)    (audited) 
                                           £'000           £'000        £'000 
  Reconciliation of                                                           
  operating profit                                                            
  to operating cash flow                                                      
  Operating profit                        2,355           1,874        3,695  
  Goodwill amortisation                     144               -            - 
  Depreciation                              235             156          318  
  Decrease in stocks                        682             368          721  
  Increase in debtors                      (676)             (9)      (1,326) 
  Decrease in creditors                    (472)           (502)         (41) 
  Amortisation of loan stock                 12              12           24  
  issue costs                                                                 
  Net cash flow from                      2,280           1,899        3,391  
  operating activities                                                        
                                                                              
  Net cash flow from                      2,280           1,899        3,391  
  operating activities                                                        
                                                                              
  Return on investments and                 175             159          327  
  servicing of finance                                                        
  Capital expenditure                      (121)            (69)        (210) 
  Acquisitions                           (4,304)               -            - 
  Corporation tax paid                         -               -         (83) 
  Dividends paid                         (1,433)           (811)      (1,913) 
  Management of liquid                         -         (1,302)      (2,541) 
  resources                                                                   
  Financing                                  24              33          442  
                                                                              
  Decrease in cash                       (3,379)            (91)        (587) 
                                                                              
  Reconciliation of net cash flow to movement                                                            
  in net funds                                                                
                                                                              
  Decrease in cash                       (3,379)            (91)        (587) 
  Capital element of hire                      -             18           20  
  purchase payments                                                           
  Net cash on acquisition                    52                -            - 
                                                                              
  Change in net funds resulting          (3,327)            (73)        (567) 
  from cash flows                                                             
  Conversion of loan stock                  721             173          561  
  to equity shares                                                            
  Cash used to increase                        -          1,302        2,541  
  liquid resources                                                            
  Movement in net funds for              (2,606)          1,402        2,535  
  the period                                                                  
                                                                              
  Net funds at 31 March 2002              9,347           6,812        6,812  
  Net funds at 30 September               6,741           8,214        9,347  
  2002                                                                        
 

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