UK's Telecom Plus shares plummet after steep profit warning

Telecom Plus

Today 08:14

June 23 (Reuters) - Telecom Plus TEP.L said it will invest around £55 million ($72.81 million) annually over the next five years to double its high-value multi-service customer base, warning the spending will slash near-term profits as the UK Utility group responds to intensifying market competition, sending its shares down 25%.
The company said adjusted pre-tax profit for the year ending March 2027 is expected to fall to between £80 million and £90 million, down from £132.2 million in fiscal 2026.
Here are some details:
Telecom Plus targets more than 1 million multiservice customers by fiscal 2031, up from around 500,000 currently, with those customers generating higher margins and staying nearly twice as long as single-service users
By fiscal 2031, the company expects adjusted pre-tax profit of around £175 million and shareholder distributions of around £100 million
Telecom Plus shares plunged 25% to become the worst performer on the FTSE mid cap .FTMC index
"Recent competitive dynamics in some of our core market verticals mean that we now need to make a conscious choice to invest more heavily than we had previously anticipated", chairman Charles Wigoder said in a statement
The strategy shift follows competitive pressure in energy and broadband markets, which has driven up churn and reduced average services per customer from 2.61 in early fiscal 2025 to 2.45 by March 2026
Peel Hunt analysts called the plan an "aggressive reset" that is negative near-term but should deliver higher-quality long-term performance
For fiscal 2026, adjusted pre-tax profit rose 4.7% to £132.2 million on revenue of £1.94 billion
Telecom Plus bundles essential household services - energy, broadband, mobile, and insurance - onto a single monthly bill
     
($1 = 0.7553 pounds)

 (Reporting by DhanushVignesh Babu in Bengaluru)
 ((DhanushVignesh.Babu@thomsonreuters.com))