10th Oct 2014 06:49
LONDON (Alliance News) - Telecom Plus PLC Friday said it expects to post first-half adjusted pretax profit and earnings per share "significantly ahead" of the previous year, leaving it comfortable in meeting market expectations for the full year.
The utilities provider also said it will appoint Nick Schoenfeld as chief financial officer in the new year. Schoenfeld has been group finance director of Hanover Acceptances Ltd since 2006, and prior to that held positions in Castorama and the Walt Disney Company.
Telecom Plus said it expects to increase its interim dividend payment for the six months to end-September by 19%, reflecting its confidence in achieving expectations of nearly 50% growth in adjusted pretax profit to GBP63 million for the year.
Telecom Plus said it had seen customer numbers rise by 34,733 in the half year, taking its total customer base to 565,372. It is on track for its targeted 70,000 new customers for the full year, it said. It increased its total number of partners by over 2,00 during the half year, boosted by an introductory offer in April.
The company said that its underlying churn had "continued to fall", as it focused on customer service.
The company said that it was "particularly satisfying" to have seen organic growth during a time when smaller independent suppliers have seen short-term pricing advantages due to falling wholesale energy prices, while not being required to make a full contribution to social and environmental charges. It expects this gap to narrow in the coming year.
The company said that the UK Competition and Markets Authority has recently begun an enquiry into the retail energy markets, and whilst this has made extra work in the short-term, it believes it is unlikely that any remedies imposed will have "a material adverse impact on our business".
Telecom Plus noted the political uncertainty surrounding the energy market ahead of the UK general election. However, it said it believes "the structure of our long-term supply arrangements with RWE npower PLC should insulate us from any gross margin pressure in the event an energy price freeze."
It has not seen any benefit yet from the changes to supplier licenses as a result of UK regulator Ofgem's retail market review in the previous year, particularly in terms of a narrowing gap between supplier's standard variable and discounted introductory fixed-term tariffs. Telecom Plus said that it is unclear if this is due to customers failing to read and understand their bills, or customers only receiving a bill on a quarterly or annual basis. However, it expects Ofgem to take further action if the customer behaviour does not start to change.
Telecom Plus expects its net debt to rise by around GBP10 million in the full year as it refurbishes its new headquarters office building.
Telecom Plus will announce its interim results November 19.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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