17th Feb 2014 08:22
LONDON (Alliance News) - Utility services company Telecom Plus PLC Monday said it plans to increase its total dividend for the year by 13%, as it expressed confidence in meeting full year expectations after another strong rise in customer numbers.
The company, which trades as Utility Warehouse, said that it expects to increase its total dividend for the year to end-March to 35 pence, from 31 pence in the previous year.
Telecom Plus saw its total customers base rise to 513,379 during the fiscal third quarter to end-December, up from 494,940 in the previous quarter and up from 449,502 in the previous year. It saw total services provided to customers rise to 1.85 million during the quarter, up from 1.54 million in the previous year.
The company completed its acquisition of Gas Supply Ltd and Electricity Plus Supply Ltd for GBP218 million from Npower during the quarter. Npower is a subsidiary of RWE AG of Germany, which holds the UK assets of the former generator National Power.
The company expects to have significant net borrowings for the next few years as a result of these acquisitions.
The launch of Telecom Plus' new Gold Bundle was successful, it said. The bundle, which allows new customers to take up all five of its core services, saw customer take up rise 20%.
Telecom Plus noted that it had seen an increase in the number of new members that switched only their energy services to Telecom Plus, which it said was as a result of the increased focus on the cost of energy bills.
Telecom Plus said that it had reduced its domestic energy tariffs, and noted that it looked forward to the next phase of UK Energy Regulator Ofgem's Retail Market Review that would require energy suppliers to highlight their most competitive tariffs on every customer bill. It expects this to drive customers to switch their energy providers.
Energy prices have become a major focus for both politicians and regulators, with the "Big Six" energy providers coming in for criticism which is driving some customers to the smaller providers like Utility Warehouse. For politicians, rising energy prices biting into dwindling household budgets is becoming a main feature of party campaigns ahead of the the next UK election, due in 2015.
Energy prices are increasing at rates well above inflation, prompting protests from consumer groups and politicians of all parties. UK Prime Minister David Cameron recently announced a review of energy pricing and competition in the Commons, while the Conservative leader has also pledged to cut green taxes next year.
Opposition leader Ed Miliband has said Labour will freeze energy prices for two years if it is elected to power in 2015, prompting energy companies to warn that they may not be able to fund investments and warnings from critics who say companies may raise prices even more ahead of any freeze.
Ofgem is looking to ban complex energy tariffs to create a fairer and more transparent energy market. Energy supplier's will be required to provide just four energy tariffs for both gas an electricity to make it easier for customers to compare costs. Suppliers will also have to tell customers which tariff is cheaper for them on bills, annual statements and other complications. They cannot increase prices on fixed-term tariffs or automatically rolling householders on to another fixed term offer when their current one ends.
?The aim of our simpler, clearer, fairer reforms is to ensure competition bears down hard on prices. Profits are not an entitlement, they should be earned by companies competing keenly to offer consumers the lowest prices and the best service," Ofgem's Chief Executive Andrew Wright said in a statement in January.
"This is an exciting time for all independent utility suppliers, with an increasing focus by politicians and regulators on ensuring that retail competition in our energy markets is really working," said Telecom Plus' Chief Executive Andrew Lindsay in a statement Monday.
The wet and windy weather conditions in the UK will reduce the average amount of energy used by Telecom Plus' members, the company said, but had not hit its profitability for the year.
The company will release its full year results on May 21, 2014.
Shares in Telecom Plus were trading up 1.1% at 1,831.00 pence Monday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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