Final Results
Telecom Plus PLC
04 June 2003
TELECOM plus PLC
4th June 2003
Preliminary results for the year ended 31 March 2003
Telecom plus plc, the UK's best value multi-utility (gas, electricity,
telephony, internet), announces preliminary results for the year ended 31 March
2003.
Financial and business highlights:
•Turnover up 78% to £58.0m (2002: 32.7m)
•Profits before tax up 38% to £5.6m (2002: £4.0m)
•Final dividend of 3.25p (total of 5.75p for the full year) to be paid on
11 July 2003
•Subscriber base increased 40% to 134,000 (2002: 96,000)
•Number of services provided increased 40% to 225,000 (2002: 160,000)
•Award of Electricity Supply Licence from OFGEM
Peter Nutting, Chairman, said:
'Since the year end, the level of new customer growth within our core Telecom
plus business has been maintained, as has the level of new distributors joining
the business. If the current monthly figures for customer acquisition are
maintained, we will exceed last year's growth rate during the current financial
year.
'We are clearly beginning to see the benefits of our strong competitive position
as the UK's first low-cost multi-service utility company, which should be
reflected in significantly higher profits for the coming year. Confidence within
our distribution channel is high and I look forward to the future with great
optimism.'
For press enquiries, please contact:
Charles Wigoder Neil Boom/Theresa Forrest
Telecom plus PLC Gresham PR Ltd.
020 8955 5000 020 7404 9000
TELECOM plus PLC
CHAIRMAN'S STATEMENT
I am pleased to report a strong set of results, reflecting significant progress
across all areas of our business.
Turnover and pre-tax profits for the year reached £58m (2002: £32.7m) and £5.6m
(2002: £4.0m) respectively. These figures reflect another strong performance
from our Virtual Network business where operating profits increased by 42% to
£8.4m (2002: £5.9m), and include a maiden contribution of £0.6m from
Telecommunications Management Limited ('TML'). This was partly offset by higher
investment within our Distribution business of £3.1m (2002: £2.2m).
At the half year I said that the current level of customer growth would see our
customer base increasing to 120,000 by the year end. In the event, we have seen
an acceleration in new customers choosing Telecom plus as their supplier, taking
our customer base at the year end to 134,000 (2002: 96,000). These customers
subscribe for over 225,000 services (2002: 160,000), representing an organic
growth rate of 40% for the year. We have also seen a steady increase in average
monthly revenues per customer during the year.
We continue to enjoy strong cash flow from our trading activities. This enabled
us to invest £5.6m in TML and Oxford Power Holdings Limited ('Opus') during the
year, and still have cash balances at the year end of £6.1m (2002: £8.4m). At
the same time, we have increased our dividend payments significantly.
TML, a business supplying fixed and mobile telephony to around 6,500 smaller and
medium sized companies, was successfully integrated into our main billing and
administration systems during the year and is now trading profitably, while Opus
has made an encouraging start towards establishing itself as a credible
electricity supplier to the commercial market.
In view of our solid balance sheet and continued cash generation, your Board is
recommending a 30% increase in the final dividend to 3.25p (2002: 2.5p) making a
total of 5.75p (2002: 4.5p) for the full year. This will be paid on 11 July 2003
to shareholders on the register at 27 June 2003. The final dividend is subject
to approval by shareholders at the Company's Annual General Meeting which is to
be held on 8 July 2003. 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.
Excellent customer service is a key part of our successful growth. To ensure we
maintain high service standards we have made a significant investment in
building our customer service team during the year. We continue to recruit and
train new staff members for our call centre and energy administration teams in
line with our rapid organic growth. We now have over 140 employees and 10,000
independent distributors, and I would like to take this opportunity to thank all
of them for their continued loyalty, enthusiasm and dedication.
Outlook
Since the year end, the recent high levels of new customer growth within our
core Telecom plus business have continued, as has the level of new distributors
joining the business. This reflects both the increasing acceptance by customers
of our attractive range of services, combined with the extensive training now
being made available to all new distributors through our National Training
Program, the College of Excellence, which was launched 18 months ago. If the
current monthly figures for customer acquisition are maintained, we will exceed
last year's growth rate during the current financial year.
The recent investment in Opus has enabled us to start taking advantage of the
low cost of electricity in the wholesale markets, and we anticipate a
significant improvement in our margins from selling electricity during the
current year. In addition, we have now received an Electricity Supply Licence
from OFGEM, making us a licensed domestic supplier of both gas and electricity
in our own right.
We have recently launched a new brand, The Utility Warehouse, which is currently
running alongside our established Telecom plus identity. This new brand more
accurately reflects the nature of our activities, and may replace the existing
brand identity in due course.
We are clearly beginning to see the benefits of our strong competitive position
as the UK's first low-cost multi-service utility company, which should be
reflected in significantly higher profits for the coming year. Confidence within
our distribution channel is high and my Board colleagues and I look forward to
the future with great optimism.
Peter Nutting
Chairman
3 June 2003
TELECOM plus PLC
Consolidated Profit & Loss Account
Year ended 31 March 2003
Other
Continuing Total
Acquisitions Operations 2003 2002
------------ --------- --------- --------
£'000 £'000 £'000 £'000
Turnover 13,564 44,472 58,036 32,677
Cost of sales (9,986) (29,753) (39,739) (20,460)
------------ --------- --------- --------
Gross profit 3,578 14,719 18,297 12,217
Sales and marketing costs (1,441) (3,102) (4,543) (2,703)
Administrative expenses (1,894) (6,620) (8,514) (5,819)
------------ --------- --------- --------
Operating profit 243 4,997 5,240 3,695
Interest receivable 464 529
Interest payable (116) (189)
--------- --------
Profit on ordinary activities 5,588 4,035
before taxation
Tax on profit on ordinary (1,607) (1,080)
activities --------- --------
Profit after taxation 3,981 2,955
Dividends (3,424) (2,534)
--------- --------
Retained profit for 557 421
the year
========= ========
Basic earnings per share 6.8p 5.4p
Diluted earnings per share 6.6p 5.2p
Dividend per share 5.75p 4.5p
The Group has no recognised gains or losses other than the profit for the
period.
TELECOM plus PLC
Consolidated Balance Sheet
As at 31 March 2003
2003 2002
----- -----
£'000 £'000 £'000 £'000
FIXED ASSETS
Tangible assets 1,946 2,026
Intangible assets 4,198 -
Investments 1,038 -
------ ------
7,182 2,026
CURRENT ASSETS
Stocks 590 1,327
Debtors (due within one 7,994 3,852
year)
Debtors (due after one 2,822 785
year)
Investments - 2,541
Cash 6,056 8,421
------ ------
17,462 16,926
CREDITORS
Amounts falling due within
one year (13,418) (8,411)
------ ------
NET CURRENT ASSETS 4,044 8,515
------ ------
TOTAL ASSETS LESS
CURRENT LIABILITIES 11,226 10,541
CREDITORS
Amounts falling due after
more than one year
(convertible debt
instruments) (350) (1,560)
------ ------
10,876 8,981
====== ======
CAPITAL AND RESERVES
Called up share capital 3,002 2,862
Share premium account 5,856 4,658
Profit and loss account 2,018 1,461
------ ------
SHAREHOLDERS' FUNDS 10,876 8,981
====== ======
Approved by the board on 3 June 2003
TELECOM plus PLC
Consolidated Cash Flow Statement
Year ended 31 March 2003
2003 2002
£'000 £'000
Reconciliation of operating profit
to cash flow from operating activities
Operating profit 5,240 3,695
Goodwill amortisation 360 -
Depreciation 503 318
Decrease in stocks 737 721
Increase in debtors (2,332) (1,326)
(Decrease)/increase in creditors 818 (41)
Amortisation of loan stock issue costs 25 24
-------- -------
Net cash flow from operating activities 5,351 3,391
======== =======
CASH FLOW STATEMENT
Net cash flow from operating activities 5,351 3,391
Returns on investments and servicing of finance 319 327
Capital expenditure (363) (210)
Acquisitions 5,461 -
Corporation tax paid (1,952) (83)
Dividends paid (2,903) (1,913)
-------- -------
Net cash flow before management of liquid (5,009) 1,512
-------- -------
resources and financing
Management of liquid resources 2,541 (2,541)
Financing 103 442
-------- -------
Decrease in cash (2,365) (587)
Reconciliation of net cash flow to movement
in net funds
Decrease in cash (2,365) (587)
Cash outflow from capital element of hire purchase contract - 20
repayments -------- -------
Change in net funds resulting from cash flows (2,365) (567)
Conversion of loan stock to equity shares 1,235 561
Cash released from liquid resources (2,541) 2,541
-------- -------
Movement in net funds for the year (3,671) 2,535
Net funds at 1 April 2002 9,347 6,812
-------- -------
Net funds at 31 March 2003 5,676 9,347
======== =======
TELECOM plus PLC
NOTES
1 The results for the year ended 31 March 2003 are not statutory
accounts and are unaudited. The results for the year to 31 March 2002 are an
abridged version of the Company's full accounts which received an unqualified
audit report and have been filed with the Registrar of Companies.
2 DIVIDENDS
2003 2002
------ ------
£'000 £'000
Interim dividend paid 2.5p (2002: 2p) per share 1,472 1,103
Final dividend proposed 3.25p (2002: 2.5p) per share 1,952 1,431
------- --------
3,424 2,534
======= ========
3 EARNINGS PER SHARE
The calculation of basic earnings per share is based on a profit of £3,981,000
(2002: £2,955,000) and a weighted average of 58,671,471 (2002: 55,029,043)
shares in issue.
2003 2002
------ ------
Basic earnings per share 6.8p 5.4p
Diluted earnings per share 6.6p 5.2p
======= =======
Diluted earnings per share assumes dilutive options and convertible
loan notes have been converted into ordinary shares. The calculations are as
follows:
2003 2002
---- -----
Profit Shares No. Profit Shares No.
£'000 000 £'000 000
Basic earnings 3,981 58,671 2,955 55,029
Dilutive effects:
- Options - 1,103 - 1,059
-------- -------- ------- --------
- Loan notes 36 761 153 3,230
======== ======== ======= ========
Diluted earnings 4,017 60,535 3,108 59,318
======== ======== ======= ========
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.
Other
continuing Total
Acquisitions operations 2003 2002
£'000 £'000 £'000 £'000
Virtual Network
Turnover 13,308 41,879 55,187 30,181
Operating profit 633 7,719 8,352 5,890
Net assets 1,329 10,910 12,239 8,522
========= ======== ======= ========
Distribution
Turnover 256 2,593 2,849 2,496
Operating loss (390) (2,722) (3,112) (2,195)
Net (liabilities) / assets (674) (689) (1,363) 459
========= ======== ======= ========
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