Interactive Investor

ii view: Telecom Plus blasts past one million customers

Pursuing a differentiated business model and offering an attractive dividend yield. We assess prospects for this bundled utility provider.

18th June 2024 16:05

by Keith Bowman from interactive investor

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Full-year results to 31 March

  • Revenue down 18% to £2.04 billion
  • Adjusted pre-tax profit up 22% to £117 million
  • Net debt of £122 million, compared to cash held of £103 million in late March
  • Final dividend of 47p per share
  • Total dividend for the year up 4% to 83p per share

Chief executive Stuart Burnett said:

“With the business in such good health, and having passed through the 1 million customer milestone, our current rate of growth places us firmly on track to double the size of the business to two million customers over the medium term, with a commensurate increase in profitability and shareholder returns."  

ii round-up:

Bundled utility provider Telecom Plus (LSE:TEP), which trades under the Utility Warehouse brand, today detailed a one-fifth increase in adjusted profits as customer numbers exceeded one million.

A record 1,011,489 customers is up from 886,579 the year before, helping drive adjusted profit to a record £117 million, beating expectations and fuelling a 4% increase in the annual dividend to 83p per share. 

Shares in the FTSE 250 company fell by 2% in afternoon UK trading having come into these latest results up by around 16% year-to-date. That’s ahead of 6% losses for energy providers SSE (LSE:SSE) and Centrica (LSE:CNA) and better than a 4% gain for the FTSE 250 index itself so far in 2024.

Telecom Plus supplies both households and small businesses throughout the UK with services from electricity and gas to broadband, mobile phone contracts and even insurance policies. 

The number of services supplied to customers rose by 328,949 during the year to a total of 3,127,097, with the number of insurance policies sold up 38% to 139,109 as consumers continued to seek value across all household bills. 

Accompanying management forecasts point to customer growth for the current year of up to 14%, potentially driving up adjusted profits to £128 million. 

The group, which summarises its mission as helping households stop wasting time and money, is now targeting two million customers over the medium term. 

The group’s AGM is likely to be held in late July or early August. 

ii view:

Started in 1996, Telecom Plus focuses mainly on the residential market. Rather than advertising or using price comparison sites, the company uses around 68,000 paid partners or representatives to sell its services to new customers. Electricity supply accounted for 52% of all revenues during this latest financial year, with gas supplied a further 35%. Broadband accounted for a further 7%, mobile phones 3.5% and other services including insurance the balance of 2.5%.   

For investors, some easing in energy prices since the summer of last year is likely to have reduced broader customer momentum in switching suppliers. Costs for businesses such as wages remain elevated, customer bad debts require monitoring especially if there's is a major upturn in UK unemployment, while geographical exposure is currently limited to the UK only. 

On the upside, pressure on consumers to save on household bills persists given elevated mortgage and rental costs. A differentiated business model sets it apart from actual suppliers such as SSE and Centrica, while climate change and required energy transition may more broadly keep energy prices volatile, fuelling demand for its cost saving services.  

In all, and despite continued risks, this differentiated utility provider with a forecast dividend yield of around 4.4% is likely to keep both growth and income investors on side. 


  • Differentiated business model
  • Targeting two million additional customers over the medium term


  • Elevated costs
  • Potential rising customer bad debts

The average rating of stock market analysts:


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