Final Results - Replacement

Telecom Plus PLC 28 May 2002 TELECOM plus PLC The issuer has advised that the following amendment should have been made to the Preliminary results announcement released at 7.00 on Tuesday 28 May under RNS 4958W. In the Chairman's Statement the record date for the dividend should have read 21 June 2002 rather than 19 July 2002. The full corrected version appears below. 28th May 2002 Preliminary results for the year ended 31 March 2002 Telecom plus plc, the UK's best value multi-utility (gas, electricity, telephony, internet), announces preliminary results for the year ended 31 March 2002. Financial and business highlights: - Turnover up 16% to £32.6m (2001: 28.1m) - Profits before tax up 61% to £4.0m (2001: £2.5m) - Final dividend of 2.5p (total of 4.5p for the full year) to be paid on 8 August 2002 - Average revenue per customer up 15% - Subscriber base now exceeding 100,000 (2001: 88,000) - Full gas licence awarded to supply homes throughout Great Britain - Go-plus internet service successfully launched Peter Nutting, Chairman, said: 'These are very good results which reflect the transformation of Telecom plus into a fully-fledged multi-utility business. We are pleased that the business has continued to grow in size and profitability, and that increasing numbers of satisfied customers are now benefiting from some of the best utility deals on the market.' For press enquiries or further information, please contact: Charles Wigoder Neil Boom/Theresa Forrest Telecom plus PLC Gresham PR Ltd. 020 8955 5000 020 7329 7555 TELECOM plus PLC CHAIRMAN'S STATEMENT I am pleased to report a year of significant progress in the development of Telecom plus as a multi-service utility providing a broad range of essential household services. Turnover and pre-tax profits for the year exceeded £32.6 million (2001: £28.1m) and £4m (2001: £2.5m) respectively, reflecting a strong performance within our virtual network business coupled with a reduced loss within our distribution business. The increase in new customer applications during the Autumn, and in the average number of services taken by each customer which I reported in November, has been sustained, accompanied by a steady increase in the number of new and active distributors promoting our services. The award by energy regulator OFGEM in September of an unrestricted licence to provide gas to domestic customers throughout Great Britain was pivotal in allowing us to reposition ourselves as a full multi-service utility. The award of the licence was also supported by a marketing drive that included producing a new multi-service brochure and customer application form. The resulting higher customer growth caused second half losses in our distribution business to rise to £1.4m compared with £0.8m during the first half, making a total loss for the year from this segment of £2.2m (2001:£2.5m). Our virtual network business benefited from this growth, with operating profit for the year rising to £5.9m (2001:£4.9m), with most of the increase being achieved during the last six months. The steady rise in the number of services and size of our customer base since October is expected to generate further growth in the profitability of our virtual network business during the current financial year, which should exceed any increase in customer acquisition costs resulting from the higher activity levels currently being seen within the distribution business. We now provide in excess of 165,000 (2001:140,000) services to over 100,000 (2001:88,000) customers, which includes supplying the UK's cheapest domestic energy to around 10,000 households. This increase in the average number of services per customer to 1.65 (2001:1.59) is a clear endorsement of our chosen strategy of providing customers with savings on a wide range of utility services. Average monthly revenue per customer ('ARPU') increased by 15% during the year, from £26.16 in March 2001 to £30.02 in March 2002. We anticipate a further increase in ARPU during the current financial year. We continue to enjoy strong cash flow, with our cash balance (including quoted loan securities purchased during the year) increasing to £11m at the year end (2001:£9m) after payment of dividends totalling £1.9m during the year. In view of our strong balance sheet and continued cash generation, your Board is recommending a final dividend of 2.5p (2001:1.5p) making a total of 4.5p (2001: 2.0p) for the full year. This will be paid on 8 August 2002 to shareholders on the register at 21 June 2002. We remain committed to the profitable long-term growth of the business and it is our intention to maintain a progressive dividend policy that reflects the Company's anticipated growth in earnings over the coming years. Our internal systems continue to perform well, and we have more than adequate capacity to support significant customer growth in future. We believe our unique computerised subscriber administration and convergent billing system gives us a significant competitive edge in terms of a lower overhead base-cost, greater efficiency and the ability to provide a cost-effective yet enhanced level of customer care and support. The Board strongly believes in the importance of prudent and conservative accounting policies which is reflected in our decision to continue to charge all costs related to acquiring new customers through the Profit and Loss Account as incurred. We have done this notwithstanding the substantial continuing and long-term value of the revenue streams which they generate. We now have over 100 employees and 7,500 independent distributors, and I would like to take this opportunity to thank them for their commitment, effort and support during a period of significant change and progress for the Company. Outlook The Company is well positioned to benefit from the strong foundations now in place and my fellow directors and I remain optimistic about the prospects for the future growth and success of the business. Peter Nutting Chairman 27 May 2002 TELECOM plus PLC Profit & Loss Account Year ended 31 March 2002 2002 2001 £'000 £'000 Turnover 32,677 28,106 Cost of sales (20,460) (18,083) Gross profit 12,217 10,023 Sales and marketing costs (2,703) (2,393) Adminstrative expenses (5,819) (5,234) Operating profit 3,695 2,396 Interest receivable 529 372 Interest payable (189) (258) Profit on ordinary activities before taxation 4,035 2,510 Tax on profit on ordinary activities (1,080) (74) Profit after taxation 2,955 2,436 Dividends (2,534) (1,077) Retained profit for the year 421 1,359 Basic earnings per share 5.4p 4.6p Diluted earnings per share 5.2p 4.4p Dividend per share 4.5p 2.0p Turnover and operating profit derive entirely from continuing operations. The company has no recognised gains or losses other than the profit for the period. TELECOM plus PLC Balance Sheet As at 31 March 2002 2002 2001 £'000 £'000 FIXED ASSETS Tangible assets 2,026 2,134 CURRENT ASSETS Stocks 1,327 2,048 Debtors 4,637 3,311 Investments 2,541 -- Cash 8,421 9,008 16,926 14,367 CREDITORS Amounts falling due within one year (8,411) (6,867) NET CURRENT ASSETS 8,515 7,500 TOTAL ASSETS LESS CURRENT LIABILITIES 10,541 9,634 CREDITORS Amounts falling due after more than one year (includes convertible debt instruments) (1,560) (2,097) 8,981 7,537 CAPITAL AND RESERVES Called up share capital 2,862 2,702 Share premium account 4,658 3,795 Profit and loss account 1,461 1,040 Shareholders' funds 8,981 7,537 Approved by the board on 27 May 2002. TELECOM plus PLC Cash Flow Statement Year ended 31 March 2002 2002 2001 £'000 £'000 Reconciliation of operating profit to cash flow from operating activities Operating profit 3,695 2,396 Depreciation 318 265 Decrease in stocks 721 223 Increase in debtors (1,326) (1,402) (Decrease)/increase in creditors (41) 1,919 Amortisation of loan stock issue costs 24 22 Net cash flow from operating activities 3,391 3,423 CASH FLOW STATEMENT Net cash flow from operating activities 3,391 3,423 Returns on investments and servicing of finance 327 129 Capital expenditure (210) (1,592) Corporation tax paid (83) -- Dividends paid (1,913) (267) 1,512 1,693 Management of liquid resources (2,541) -- Financing 442 3,364 (Decrease)/increase in cash (587) 5,057 Reconciliation of net cash flow to movement in net funds (Decrease)/increase in cash (587) 5,057 Cash outflow from capital element of hire purchase contract repayments 20 148 Change in net funds resulting from cash flows (567) 5,205 Conversion of loan stock to equity shares 561 428 Cash used to increase liquid resources 2,541 -- Movement in net funds for the year 2,535 5,633 Net funds at 1 April 2001 6,812 1,179 Net funds at 31 March 2002 9,347 6,812 'NOTES AND ACCOUNTING POLICIESTELECOM plus PLC NOTES 1 The results for the year ended 31 March 2002 are not statutory accounts and are unaudited. The results for the year to 31 March 2001 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 2002 2001 £'000 £'000 Interim dividend paid 2p (2001: 0.5p) per share 1,103 267 Final dividend proposed 2.5p (2001: 1.5p) per share 1,431 810 2,534 1,077 3 EARNINGS PER SHARE The calculation of basic earnings per share is based on a profit of £2,955,000 (2001: £2,436,000) and a weighted average of 55,029,043 (2001 : 52,698,017) shares in issue. 2002 2001 Basic earnings per share 5.4p 4.6p Diluted earnings per share 5.2p 4.4p Diluted earnings per share assumes dilutive options and convertible loan notes have been converted into ordinary shares. The calculations are as follows: 2002 2001 Profit Shares No. Profit Shares No. £'000 000 £'000 000 Basic earnings 2,955 55,029 2,436 52,698 Dilutive effects: - Options - 1,059 - 2,506 - Loan notes 153 3,230 - - Diluted earnings 3,108 59,318 2,436 55,204 4 TURNOVER AND SEGMENTAL ANALYSIS The activity of the Company divides 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. 2002 2001 £'000 £'000 Virtual Network Turnover 30,181 24,289 Operating profit 5,890 4,867 Net assets 8,522 5,891 Distribution Turnover 2,496 3,817 Operating loss (2,195) (2,471) Net assets 459 1,646 This information is provided by RNS The company news service from the London Stock Exchange

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