Interim Management Statement

RNS Number : 4702J
Telecom Plus PLC
17 July 2013
 



 

17 July 2013

 

 

 

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, today issues its Interim Management Statement to cover the period from 1 April 2013 to 16 July 2013. This incorporates information relating to the performance of the business for its first quarter ended 30 June 2013, to coincide with its Annual General Meeting ("AGM") being held later today.

 

Highlights

 

·           Continuing strong organic growth

·           Customer numbers up by 13,372 during the quarter to 474,404 (30 June 2012: 426,406)

·           Number of services up by 64,267 during the quarter to 1,666,327 (30 June 2012: 1,434,339)

 

Operating Review

 

The momentum which was building in the business during the previous quarter has continued over the past three months, with an encouraging increase in numbers across all our core services. Within this, our mobile business is growing particularly strongly, with annualised growth running at more than 34%.

 

The strong distributor recruitment levels we saw in Q4 2013 contributed to an acceleration in our growth during the first quarter, with overall customer numbers increasing by 13,372; this is an increase of over 20% on the same period last year (Q1 2013: 10,917). The number of services provided rose by 64,267 (Q1 2013: 53,316), which represents a significant improvement on the strong quarterly growth numbers reported over our last two financial years.

 

Since the year end, the quality of customers joining our Discount Club has remained consistently high, with over 55% of new residential Club customers applying for at least four of our core services (gas, electricity, landline, broadband and mobile). As a result, the average number of services taken by residential Club customers grew from 3.80 to 3.85 during the period.

 

Cash Flow

 

Underlying cash flow remains in line with management expectations, with positive cash generation of almost £3m during the period, resulting in a net cash balance of £3.6m as at 30 June 2013 (31 March 2013: £0.8m).

 

 

 

 

 

 

 

 

Distributor, Customer and Service Numbers

 

Telecom Plus Group

FY2014

FY2013



Q1

Q4

Q3

Q2

Q1








Distributors

39,848

38,902

37,508

37,709

37,777








Customers







Residential Club

383,231

373,056

363,287

352,733

343,346


Business Club

28,764

28,313

27,957

27,717

27,141


Total Club

411,995

401,369

391,244

380,450

370,487


Non Club

55,123

52,062

49,922

48,379

46,091


Total Telecom Plus

467,118

453,431

441,166

428,829

416,578


TML

7,286

7,601

8,336

9,317

9,828


Total Group

474,404

461,032

449,502

438,146

426,406








Services







Electricity

417,047

403,922

389,637

375,262

361,202


Gas

345,311

334,565

322,964

311,780

300,420


Fixed Telephony

258,746

250,643

245,251

240,963

236,517


Fixed Line Rental

231,136

221,692

213,782

206,316

199,669


Broadband

185,204

175,337

166,208

157,355

149,608


Mobile

96,691

89,017

83,060

77,344

69,225


CashBack card

122,558

117,025

113,040

108,806

106,235


Non Geographic numbers

9,634

9,859

10,291

10,919

11,463


Total Group

1,666,327

1,602,060

1,544,233

1,488,745

1,434,339









Residential Club

1,474,487

1,418,078

1,364,746

1,311,540

1,262,437


Business Club

75,022

72,676

71,155

69,773

67,284


Total Club

1,549,509

1,490,754

1,435,901

1,381,313

1,329,721


Non Club

92,505

86,724

82,587

79,723

75,838


Total Telecom Plus

1,642,014

1,577,478

1,518,488

1,461,036

1,405,559


TML

24,313

24,582

25,745

27,709

28,780


Total Group

1,666,327

1,602,060

1,544,233

1,488,745

1,434,339








 

 

Outlook

 

The macro-economic climate continues to provide a favourable environment for our business model, with many consumers receptive to the idea of saving money (by switching to a new utility supplier), and/or being interested in building a secure and reliable part-time income by promoting our services as a distributor.

 

We are on track to launch a new online application process this autumn, designed to make it significantly easier for our distributors to sign up new customers, as well as enabling existing members to refer their friends to us effectively. We believe this initiative has the potential to generate significant incremental growth.

 

Ofgem has recently circulated revised draft licence conditions as part of the statutory consultation process for its Retail Market Review ('RMR'). We welcome its principal stated objectives of simplifying existing complex tariff structures and encouraging competition, and we are currently evaluating how we can harness these changes to position our unique multi-utility proposition even more competitively in future. In the meantime, we are continuing to engage with Ofgem in relation to some of the detailed provisions, where the impact on market participants who fall outside the traditional 'energy only' business model does not appear to have been fully considered.

 

It seems likely that retail energy prices will see a modest increase this winter, principally reflecting higher wholesale prices and the costs associated with greener generation initiatives, upgrading the distribution infrastructure, and the installation of smart metering. We anticipate that these increases will take place at the same time as the implementation of the RMR, currently scheduled for the end of this calendar year.

 

We have seen a strong start to the current quarter, supported by a short-term promotion launched at the start of July offering free membership to new customers joining during the month.

 

Profits for the first half are expected to be modestly ahead of the corresponding figures for last year, and we look forward to reporting record figures for turnover, profits, earnings and dividends for the full year in line with market expectations, in due course.

 

Notice of results

 

We anticipate issuing our half yearly results for the six months ended 30 September 2013 on 19 November 2013.

 

Andrew Lindsay, Chief Executive said:

 

"The momentum that is building within the business continued into the first quarter of the new financial year, with organic growth comfortably ahead of the levels achieved last year."

 

"Confidence within our distribution channel remains high, and we anticipate further strong organic growth over the coming months."

 

"Profits for the first half are expected to be modestly ahead of the corresponding figures for last year, and we look forward to reporting record figures for turnover, profits, earnings and dividends for the full year, in line with market expectations."

 

For more information please contact:

 

Telecom Plus PLC

Andrew Lindsay, Chief Executive                                                                  020 8955 5000

Chris Houghton, Finance Director    

                          

Peel Hunt LLP

Richard Kauffer / Dan Webster                                                                     020 7418 8900

 

N+1 Singer

Nick Owen / Graeme Summers                                                                    020 7496 3000

 

MHP Communications

Reg Hoare / Katie Hunt / Giles Robinson                                                      020 3128 8100

 

About Telecom Plus PLC ('Telecom Plus')                                              www.utilitywarehouse.co.uk

 

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 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 also has a 20% shareholding in Opus Energy Group Ltd a successful, profitable and fast growing independent supplier of Gas and Electricity to small, medium and large business customers.

 

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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