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Telecom PlusAnnouncement

06/09/2014 16:32

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RNS Number : 2691M
Telecom Plus PLC
15 July 2014 
 
15 July 2014 
 
Telecom Plus PLC (the "Company") 
 
Interim Management Statement 
 
Telecom Plus PLC (trading as the Utility Warehouse), which supplies a wide
range of utility services (gas, electricity, fixed line telephony, mobile
telephony and broadband internet) to both residential and business customers,
today issues its Interim Management Statement to cover the period from 1 April
2014 to 14 July 2014. This incorporates information relating to the
performance of the business for its first quarter ended 30 June 2014, to
coincide with its Annual General Meeting ("AGM") being held later today. 
 
Highlights 
 
·           Continuing strong organic growth 
 
·           Customer numbers up by 16,739 during the quarter to 547,378 (30
June 2013: 474,404) 
 
·           Number of services up by 56,574 during the quarter to 1,963,734
(30 June 2013: 1,666,327) 
 
·           New online application process successfully introduced 
 
·           Record numbers of new Partners joining during the period 
 
Operating Review 
 
The first quarter of the current year has seen the business deliver further
strong organic growth. 
 
Customer numbers for the period rose by 16,739 (Q1 2014: 13,372), representing
an increase of 25% on the net customer growth achieved during the
corresponding period last year.  This took the overall size of our customer
base to over 547,000 (2014: 474,404), an increase of 15.4% over the last 12
months. The number of services being provided grew by 56,574 to 1,963,734
(2013: 1,666,327), making it our 12th consecutive quarter in which we have
achieved net growth of more than 50,000 services. 
 
We are encouraged by the strong interest we continue to see from new Partners
wanting to promote our services, helped by the half-price joining offer which
we ran during April. As a result, the total number of Partners has increased
to 46,602, a net increase of over 2,500 during the quarter. 
 
The new online application process which we launched in March 2014, has
received an enthusiastic response from our Partners, with around 75% of
residential customer applications now being generated using our new online
application process at www.jointheclub.co.uk. We are delighted with this high
level of early adoption given the steep learning curve faced by our Partners,
many of whom required additional training from us. Despite the significant
pressure this put on our training resources, we managed to train a total of
almost 10,000 Partners during the quarter, representing a near four-fold
increase on the usual volume. 
 
During the quarter we were also pleased to be recognised as the 'Most Trusted
Broadband Supplier' in the Moneywise 2014 Customer Service Awards, and to be
nominated by Which? in two categories at its 2014 Annual Awards, including the
award for 'Best Customer Service'. 
 
The quality of customers joining our Discount Club remains high, with over 25%
of new residential Club customers applying for all five of our core services
(gas, electricity, landline, broadband and mobile) during the quarter. 
 
Cash Flow 
 
Underlying cash flow remains strong, with net debt expected to increase by
about £10m over the course of the year as we pay the capital costs associated
with refurbishing our new headquarters office building. 
 
Distributor, Customer and Service Numbers 
 
 Telecom Plus Group  FY2015                  FY2014     
                                             Q1         Q4         Q3         Q2         Q1         
                                                                                                    
 Distributors        46,602                  44,046     42,489     42,223     39,848     
                                                                                                    
 Customers                                                                               
                     Residential             511,783    495,234    478,171    458,751    438,354    
                     Business                29,540     29,098     28,609     29,289     28,764     
                     Total Telecom Plus      541,323    524,332    506,780    488,040    467,118    
                     TML                     6,055      6,307      6,599      6,900      7,286      
                     Total Group             547,378    530,639    513,379    494,940    474,404    
                                                                                                    
 Services                                                                                
                     Electricity             490,292    474,123    457,482    439,367    417,047    
                     Gas                     405,114    392,744    378,615    363,945    345,311    
                     Fixed Telephony         292,764    288,130    283,172    273,168    258,746    
                     Fixed Line Rental       269,957    264,341    258,089    246,624    231,136    
                     Broadband               228,737    221,938    214,457    202,102    185,204    
                     Mobile                  124,230    117,425    110,806    104,249    96,691     
                     CashBack card           144,174    139,769    137,580    129,018    122,558    
                     Non Geographic numbers  8,466      8,690      9,002      9,301      9,634      
                     Total Group             1,963,734  1,907,160  1,849,203  1,767,774  1,666,327  
                                                                                                    
                     Residential             1,860,198  1,804,830  1,747,682  1,665,772  1,566,992  
                     Business                81,686     79,864     78,447     78,168     75,022     
                     Total Telecom Plus      1,941,884  1,884,694  1,826,129  1,743,940  1,642,014  
                     TML                     21,850     22,466     23,074     23,834     24,313     
                     Total Group             1,963,734  1,907,160  1,849,203  1,767,774  1,666,327  
                                                                                                    
 
 
Outlook 
 
The economic climate continues to provide a favourable backdrop to further
growing our business, with trust and confidence in conventional utility
suppliers remaining low. Consumers remain attracted to the unique combination
of benefits we offer, namely greater convenience (by consolidating all their
utilities in one place), better value, and award-winning customer service,
with many also choosing to build a secure and reliable part-time income as a
Partner by promoting our services to others. 
 
We continue to work on developing both our online application process and
associated marketing tools in response to feedback received from our Partners,
with a view to encouraging higher penetration of our Gold bundles in future,
and to make it even easier for them to sign up new customers. These changes
are also expected to facilitate a higher level of customer referrals in due
course, as existing members increasingly take advantage of the opportunity to
benefit from referring us to their friends. We believe this initiative has the
potential to generate significant incremental growth. 
 
The energy market is going through an extended period of upheaval following
the introduction of the new license conditions imposed by OFGEM as part of its
recent Retail Market Review ('RMR'), and the recently announced CMA
investigation. As the UK's leading independent supplier, it is logical to
expect that we will be a net beneficiary of any action taken by the CMA to
encourage a more competitive energy market. In the meantime, the RMR changes
have now been implemented by all major suppliers; these contain, importantly,
a requirement that all suppliers include information on any cheaper tariffs
available with each bill they send, and we anticipate deriving a significant
benefit from this over the course of the next 12 months. 
 
We expect energy prices to remain broadly stable in the run-up to the general
election next year, with upward pressure on costs from regulatory,
environmental and political changes, being offset by lower wholesale costs. 
 
Building work on our new office headquarters remains both on track and on
budget, and we look forward to taking occupation during November this year.
Once complete, our new building will provide sufficient low-cost space to
accommodate our anticipated continuing strong organic growth for the
foreseeable future. 
 
Customer gathering during the current quarter has got off to a strong start,
supported by a short-term promotion we launched at the beginning of this month
offering shopping vouchers to new customers joining during July who
successfully apply for one of our Gold bundles. 
 
Profits for the first half are expected to be significantly ahead of the
corresponding figures for last year, and we remain comfortable with the
guidance we provided in May that profits for the full year will increase by
almost 50% to £63m. We also reiterate that shareholders can look forward to
continuing progressive growth in the level of our dividend payments. 
 
Notice of results 
 
We anticipate issuing our half yearly results for the six months ended 30
September 2014 on 19 November 2014. 
 
Andrew Lindsay, Chief Executive said: 
 
"The momentum within the business is continuing, with organic growth in
customer numbers during the first quarter comfortably ahead of the levels
achieved last year." 
 
"We are confident that we will achieve the target we have set ourselves of
growing our customer base to around 600,000 by the year end, which would
represent net growth of around 70,000 customers." 
 
"We remain wholly focussed on securing our position as the nation's most
trusted utility supplier, and supporting our Partners as they continue to
spread the word about the convenience, savings and exceptional customer
service we provide. With a current market share of less than 2%, we are well
placed to continue to deliver significant organic growth for many years to
come." 
 
"Profits for the first half are expected to be significantly ahead of the
corresponding figures for last year, and we look forward to reporting record
figures for revenue, profits, earnings and dividends for the full year." 
 
For more information please contact: 
 
Telecom Plus PLC 
 
Andrew Lindsay, Chief Executive                                               
                  020 8955 5000 
 
Chris Houghton, Finance Director 
 
Peel Hunt LLP 
 
Richard Kauffer / Dan Webster                                                 
                   020 7418 8900 
 
MHP Communications 
 
Reg Hoare / Katie Hunt / Giles Robinson                                       
              020 3128 8100 
 
About Telecom Plus PLC ('Telecom Plus')                                       
      www.utilitywarehouse.co.uk 
 
Telecom Plus which owns and operates the Utility Warehouse brand, is the UK's
only fully integrated provider of a wide range of competitively priced utility
services spanning both the Communications and Energy markets. 
 
Customers benefit from the convenience of a single monthly bill, consistently
good value across all their utilities and exceptional levels of customer
service. The Utility Warehouse does not advertise, relying instead on 'word of
mouth' recommendation by existing satisfied members and part-time distributors
('Partners') in order to grow its market share. 
 
Telecom Plus also has a 20% shareholding in Opus Energy Group Ltd a
successful, profitable and fast growing independent supplier of Gas and
Electricity to small, medium and large business customers. 
 
Telecom Plus is listed on the London Stock Exchange (Ticker: TEP LN).  For
further information please visit: www.telecomplus.co.uk. 
 
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