Interim Results

Telecom Plus PLC 5 November 2001 TELECOM plus PLC 5 November 2001 Interim results for the half year ended 30 September 2001 Telecom plus plc, the UK's best value multi-utility (gas, electricity, telephony, internet), announces interim results for the half year ended 30 September 2001. Financial and business highlights: * Profits before tax of £2.0m (2000: £0.9m) * Full gas licence to supply homes throughout Great Britain received * Go-plus internet service successfully launched * Interim dividend of 2 pence per share (2000: 0.5p) Commenting on the results, Chairman Peter Nutting, said: 'The award of the full gas licence has been an important milestone for the company. We have already seen that customers like to take multiple services, and when they do, they are more likely to stay with us. While many other companies in our sector have struggled, we are pleased that profits have continued to rise, and the business is providing our growing customer base with a broader range of services.' For press enquiries or further information, please contact: Charles Wigoder Neil Boom Telecom plus PLC Gresham PR 020 8955 5000 020 7329 7555 Chairman's Statement I am pleased to report a period of strong progress for the business. In the six months under review pre-tax profits have more than doubled to £2.0m (2000: £0.9m). This reflects both an increased contribution from our Virtual Network Business, where turnover increased by 21% to £13.8m compared with the corresponding period last year (2000: £11.4m), and reduced losses in our Distribution Business. In September we were awarded an unrestricted gas licence by energy regulator OFGEM to supply domestic residences throughout Great Britain. As Telecom plus is the first company from outside the energy sector to be granted a licence of this type, we regard this as an important endorsement by the regulator of our systems and management team. As a result, there has recently been an increase in activity from our distribution channel that has produced a corresponding rise in the number of new customers. Our ability to offer customers gas and electricity in addition to fixed line and mobile telephone services, coupled with the introduction of a multi-service application form early last month, has led to a significant increase in the average number of services taken by each new customer. We believe this is an encouraging indication that there will be widespread appeal for our broad range of low cost utility services, which we expect to be reflected in the performance of our Virtual Network Business during the remainder of the current financial year. During the summer we launched go-plus, a competitively priced internet access service. This is being marketed to existing customers through literature enclosed with their bills, and also to new customers through our distribution network. Naturally, it is also being marketed on the internet itself. We do not expect go-plus to have any material short-term impact on our overall financial performance, but we believe this new service is strategically important over the longer term. In view of the Company's strong cash flow and rising profitability, the Board has decided to pay an interim dividend of 2p (2000: 0.5p) per share. This interim dividend will be paid on 7 December 2001 to shareholders on the register at 16 November 2001. Depending on the Company's financial performance during the remainder of the current financial year, the Board intends to recommend a final dividend of not less than 2p per share, making a total of not less than 4p per share for the year. I would like to thank our staff and our distributors for their patience, hard work and loyalty during the extended period it has taken to put together a comprehensive and competitive range of services. We believe we are now strongly positioned as the UK's first low cost multi-service utility company and my Board colleagues and I are extremely excited about the opportunities for organic growth which are now open to us. Peter Nutting Chairman 5 November 2001 TELECOM plus PLC Profit & Loss Account 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2001 2000 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Turnover 14,644 13,773 28,106 Cost of sales (8,771) (9,372) (18,083) Gross profit 5,873 4,401 10,023 Sales and marketing costs (1,050) (1,132) (2,393) Adminstrative expenses (2,949) (2,362) (5,234) Operating profit 1,874 907 2,396 Interest receivable 262 139 372 Interest payable (103) (136) (258) Profit before taxation 2,033 910 2,510 Taxation (565) (28) (74) Profit after taxation 1,468 882 2,436 Dividends (1,092) (267) (1,077) Retained profit 376 615 1,359 Basic earnings per ordinary 2.7p 1.7p 4.6p share Diluted earnings per ordinary 2.6p 1.6p 4.4p share Dividend per share 2.0p 0.5p 2.0p TELECOM plus PLC Segmental Analysis 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2001 2000 2001 £'000 £'000 £'000 Virtual Network Turnover 13,840 11,389 24,289 Operating costs (11,131) (9,198) (19,422) Operating profit 2,709 2,191 4,867 Distribution Turnover 804 2,384 3,817 Operating costs (1,639) (3,668) (6,288) Operating loss (835) (1,284) (2,471) Total Turnover 14,644 13,773 28,106 Operating costs (12,770) (12,866) (25,710) Operating profit 1,874 907 2,396 TELECOM plus PLC Balance Sheet As at As at As at 30 September 30 September 31 March 2001 2000 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 FIXED ASSETS Tangible assets 2,047 1,400 2,134 CURRENT ASSETS Stocks 1,680 2,057 2,048 Debtors 3,320 2,459 3,311 Investments in quoted loan 1,302 - - securities Cash at bank and in hand 8,917 7,537 9,008 15,219 12,053 14,367 CREDITORS Amounts falling due within one year (7,194) (4,573) (6,867) NET CURRENT ASSETS 8,025 7,480 7,500 TOTAL ASSETS LESS CURRENT LIABILITIES 10,072 8,880 9,634 CREDITORS Amounts falling due after more than one year (1,936) (2,424) (2,097) 8,136 6,456 7,537 CAPITAL AND RESERVES Called up share capital 2,731 2,668 2,702 Share premium account 3,989 3,492 3,795 Profit and loss account 1,416 296 1,040 Shareholders' funds 8,136 6,456 7,537 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 2001 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 2001 2000 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Reconciliation of operating profit to operating cash flow Operating profit 1,874 907 2,396 Depreciation 156 115 265 Decrease in stocks 368 214 223 Increase in debtors (9) (550) (1,402) (Decrease)/increase in (502) (151) 1,919 creditors Amortisation of loan stock 12 12 22 issue costs Net cash flow from operating 1,899 547 3,423 activities Net cash flow from operating 1,899 547 3,423 activities Return on investments and servicing of finance 159 4 129 Capital expenditure (69) (408) (1,592) Dividends paid (811) - (267) Management of liquid resources (1,302) - - Financing 33 3,443 3,364 (Decrease)/increase in cash (91) 3,586 5,057 Reconciliation of net cash flow to movement in net funds (Decrease)/increase in cash (91) 3,586 5,057 Capital element of hire 18 68 148 purchase payments Change in net funds resulting from cash flow (73) 3,654 5,205 Conversion of loan stock to 173 91 428 equity shares Cash used to increase liquid 1,302 - - resources Movement in net funds for the 1,402 3,745 5,633 period Net funds at 31 March 2001 6,812 1,179 1,179 Net funds at 30 September 2001 8,214 4,924 6,812

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