22nd Nov 2022 15:41
(Alliance News) - Telecom Plus PLC lifted its annual guidance on Tuesday after the company's Utility Warehouse offering enjoyed a bumper first-half thanks to record customer growth.
In the half-year ended September 30, revenue jumped 52% year-on-year to GBP562.4 million from GBP371.3 million a year earlier. Pretax profit surged 46% to GBP29.1 million from GBP29.9 million.
The surge in interim profit and revenue came as customer numbers hit a record amid the cost of living crisis in the UK. Telecom Plus said customer numbers shot up by 86,004 to 814,684 at September 30 from 728,680 at the end of March.
"As the pressures on household budgets mount, we continue to offer UK families what they want: the lowest priced energy on the market, savings on their mobile, broadband and insurance bills, cashback on their daily spend, and additional earnings for recommending UW to their friends and families," Co-Chief Executive Andrew Lindsay said.
For AJ Bell's Russ Mould the failure of energy suppliers such as bulb, ampower, igloo, Hub Energy and "many, many more" was essential to Telecom Plus's success.
"The failure of energy suppliers... has caused great distress to many householders, but a lot of them have been able to get help from Utility Warehouse, whose parent is Telecom Plus," Mould said.
Telecom Plus's Co-CEO Stuart Burnett boasted that Utility Warehouse was now the "only meaningful energy switching option in the UK", with the rest of the market offering customers "little to no difference in price or service".
"Our unique multiservice proposition enables us to provide households with energy savings of up to GBP125 a year below the new Energy Price Guarantee, sustainably and profitably, underpinning our long-term strong competitive position," Burnett added.
Though energy was evidently a key driver behind Telecom Plus's first-half customer number rise, customers also signed up for mobile, insurance and broadband - with only the legacy wireline telecoms business showing a drop.
Looking forward, Telecom Plus aims to add one million new customers within the next five years, a target that Russ Mould at AJ Bell said may not be as "outlandish as it seems when it has few rivals left in the energy business".
Telecom Plus also expects annual adjusted pretax profit of at least GBP95 million. In October, it said it expected annual adjusted pretax profit "materially ahead" of market expectations at the time of GBP75 million, which were the same as Telecom Plus's own earlier guidance.
In financial 2022, Telecom Plus posted adjusted pretax profit of GBP61.9 million.
Charles Hall, analyst at Peel Hunt, said that as the the firm has a "compelling proposition in a very tough consumer environment", investors should see "strong profit growth and attractive dividend flow" moving forward.
"The company has a c.3% share of households, so there is plenty of room for the business to be materially larger and more profitable," Hall concluded.
Shares in Telecom Plus were up 1.4% at 2,368.00 pence on Tuesday afternoon in London.
By Heather Rydings; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
Telecom Plus