REG - Telecom Plus PLC - Final Results for the year ended 31 March 2025
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RNS Number : 0616O Telecom Plus PLC 24 June 2025
Embargoed until 07.00 24 June 2025
Telecom Plus PLC
Final Results for the year ended 31 March 2025
"Continuing strong customer growth with record profits and dividend"
Telecom Plus PLC (trading as Utility Warehouse), an integrated and unique
platform for subscription-style essential household services in the UK, today
issues its final results for the year ended 31 March 2025.
Financial Highlights
● Revenues of £1,838.2m (2024: £2,039.1m)
● Gross profit up 0.8% to £358.1m (2024: £355.2m)
● Adjusted pre-tax profit up 8.1% to £126.3m, in-line with market
expectations (2024: £116.9m)
● Adjusted EPS up 9.4% to 119.2p (2024: 109.0p)
● Statutory pre-tax profit up 5.4% to £105.9m (2024: £100.5m)
● Statutory EPS up 7.1% to 96.3p (2024: 89.9p)
● Net debt to adjusted EBITDA ratio at 0.8x
● Full year dividend up 13.3% to 94p (2024: 83p) per share
Operational Highlights
● Customer numbers continued their double-digit growth trajectory,
increasing during the year by 15% to 1,163,608 (FY24: 1,011,489), including
around 25,000 fixed-line/broadband customers acquired from TalkTalk
● 12.6% organic customer growth (excluding the 25,000 customers
transferred from TalkTalk) in line with guidance
● Service numbers increased by 265,496 to 3,392,593 (2024: 3,127,097)
● Awarded Which? Recommended Provider status for Energy and Broadband,
the first company to hold both awards simultaneously, and rated "Excellent" on
Trustpilot
● Partner numbers increased to 71,710 (2024: 68,251) reflecting
ongoing strong demand for our income opportunity amidst continuing cost of
living pressures and the ongoing pensions crisis
Outlook
● We anticipate delivering total customer growth in FY26 of around 15%
(including the balance of the customers to be transferred from TalkTalk as
part of a cross-selling transaction), with continuing low double digit organic
customer growth
● Adjusted pre-tax profit for FY26 is expected to be within a range of
£132m-£138m
● Ongoing favourable environment for recruitment of new Partners
● Continued confidence in growing the business to two million
customers and beyond over the medium term
Stuart Burnett, CEO, said:
"Our innovative multiservice platform, together with our unique word of mouth
route to market, has enabled us to deliver another set of record results. Now
into our fourth consecutive year of delivering double digit percentage
customer growth, we are making rapid progress towards our medium term target
of supplying subscription-style essential household services to two million
customers and beyond.
During what seems likely to be a challenging period for the global economy, we
are fortunate that our business model makes us largely immune to any changes
in trade tariffs, interest rates, economic growth, or business confidence.
Indeed, such environments have historically been positive for us, with
increasing numbers of people seeking additional income sources and ways to
reduce their household bills.
By helping households to save time and money on their essential bills, whilst
supporting tens of thousands of Partners to earn an additional income, we
expect to deliver continuing strong growth in customer numbers, profits and
returns to shareholders over the years ahead."
There will be a virtual meeting for analysts today at 9.00am, accessible via
https://brrmedia.news/TEP_FY_25
For more information please contact:
Telecom Plus PLC
Stuart Burnett,
CEO
020 8955 5000
Nick Schoenfeld, CFO
Peel Hunt
Dan Webster / Andrew
Clark
020 7418 8900
Deutsche Numis
Mark Lander / Joshua
Hughes
020 7260 1000
For investor relations:
Matthew
Walker
matthew.walker@uw.co.uk
For media relations:
Lansons | Team Farner
Tom Baldock / Ed
Hooper
07860
101715 / 07783 387713
utilitywarehouse@lansons.com
About Telecom Plus PLC ("Telecom Plus"):
Telecom Plus, which owns and operates Utility Warehouse (UW), is
the UK's only integrated multiservice utility platform, offering a wide
range of subscription-style essential household services - energy, broadband,
mobile and insurance; all these services share similar characteristics where
the revenues and profitability are highly predictable, and where customers can
be expected to remain with us for an extended period once all their chosen
services have been successfully migrated.
Customers benefit from the convenience of a single monthly bill, consistently
good value across all their utilities and exceptional service levels.
Customers sign up through a national network of local UW Partners, who
recommend UW's services to friends, family and people they know by
word-of-mouth.
Telecom Plus is listed on the London Stock Exchange (Ticker: TEP LN). For
further information please visit telecomplus.co.uk
LEI code: 549300QGHDX5UKE58G86
Cautionary statement regarding forward-looking statements
This Announcement may contain "forward-looking statements" with respect to
certain of the Company's plans and its current goals and expectations relating
to its future financial condition, performance, strategic initiatives,
objectives and results. Forward-looking statements sometimes use words such as
"aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "seek", "may", "could", "outlook" or other words of similar
meaning. By their nature, all forward-looking statements involve risk and
uncertainty because they are based on numerous assumptions regarding the
Company's present and future business strategies, relate to future events and
depend on circumstances which are or may be beyond the control of the Company
which could cause actual results or trends to differ materially from those
made in or suggested by the forward-looking statements in this Announcement,
including, but not limited to, domestic and global economic business
conditions; market-related risks such as fluctuations in interest rates; the
policies and actions of governmental and regulatory authorities; the effect of
competition, inflation and deflation; the effect of legislative, fiscal, tax
and regulatory developments in the jurisdictions in which the Company and its
respective affiliates operate; the effect of volatility in the equity, capital
and credit markets on profitability and ability to access capital and credit;
a decline in credit ratings of the Company; the effect of operational risks;
an unexpected decline in sales for the Company; any limitations of internal
financial reporting controls; and the loss of key personnel. Any
forward-looking statements made in this Announcement by or on behalf of the
Company speak only as of the date they are made. Save as required by the
Market Abuse Regulation, the Disclosure Guidance and Transparency Rules, the
Listing Rules or by law, the Company undertakes no obligation to update these
forward-looking statements and will not publicly release any revisions it may
make to these forward-looking statements that may occur due to any change in
its expectations or to reflect events or circumstances after the date of this
Announcement.
Chairman's Statement
I am pleased to report another strong performance during FY25 with
double-digit percentage customer growth, record profits and a record
dividend.
Adjusted pre-tax profits increased by 8.1% to £126.3m (2024: £116.9m),
in-line with market expectations, reflecting the continuing double-digit
growth in our customer numbers, and lower average energy prices compared to
the prior year.
The Ofgem energy price cap during FY25 averaged £1,700 (2024: £2,140); a
fall of over 20%. This significant reduction led to a fall in overall revenues
to £1,838.2m (2024: £2,039.1m) despite an increase in service numbers and
higher revenues from non-energy services. These factors were also responsible
for our higher gross profit margin of 19.5% (2024: 17.4%) and the modest 0.8%
increase in our gross profit to £358.1m (2024: £355.2m). Adjusted earnings
per share for the year rose by 9.4% to 119.2p (2024: 109.0p). Statutory
pre-tax profits rose by 5.4% to £105.9m (2024: £100.5m), and statutory EPS
rose by 7.1% to 96.3p (2024: 89.9p).
Our strong growth continued during the year, with customer numbers increasing
by 15.0% to 1,163,608 (2024: 1,011,489) including around 25,000
fixed-line/broadband customers acquired from TalkTalk as part of a cross-sell
transaction (and an organic growth rate of 12.6% excluding the impact of
these). Churn increased to 13.7% due to the recent sharp fall in forward
energy wholesale prices, a market dynamic which tends to support introductory
tariffs at a significant discount to the prevailing Price Cap in the short
term; the Price Cap level is expected to decrease from July and remain
relatively stable during the remainder of FY26, which should support a
reduction in churn back towards historically lower levels.
Service numbers increased by 265,496 to 3,392,593 (2024: 3,127,097); this rate
of growth should accelerate going forwards following the recent relaunch of
our insurance products.
We were pleased to agree terms with TalkTalk for a cross-sell transaction,
under which a total of c.95,000 TalkTalk fixed-line/broadband customers are
being transferred to UW for an undisclosed sum, with a view to us upselling
additional utility services to them through our Partner network; this will
support the anticipated acceleration in our service growth this year, as
mentioned above. The first 25,000 of these customers were transferred during
Q4 of FY25. If this is successful, it can be expected to open up additional
exciting growth opportunities (both inorganic and partnership) in the
future.
Across the UK, families have continued to face cost-of-living pressures, and
we are proud of the role we play in helping both customers and Partners
address these challenges. Our unique business model shares the benefits we
derive from our integrated platform with our customers (by giving them
sustainable long-term savings on their essential household subscription-style
services). Meanwhile our Partner opportunity offers hard-working people, from
all walks of life, the ability to earn an additional long-term income (which
helps offset their rising cost of living whilst building financial freedom).
With a pension crisis looming over the medium term, the need for this income
is becoming ever more urgent; as a result, we are seeing strong ongoing
interest in our Partner opportunity, with our total Partner numbers increasing
to over 71,000.
I am very proud of the commitment and hard work of our employees who were
critical in achieving another record company performance. Amongst other
achievements, we became a Which? Recommended Provider for both Energy and
Broadband, the first company to hold both awards simultaneously. We were
awarded "Best Value for Money" and "Best Customer Service" by Uswitch in their
2024 Energy Awards, were rated the top energy supplier for customer service by
Citizens Advice; and maintained an "Excellent" rating on Trustpilot. These
accolades reflect the outstanding customer service delivered by our colleagues
and the dedication of our Partners, as well as the great value for money of
our customer offering.
Sustainability
Our people and communities are central to our strategy. We focus on
sustainability through building long-term relationships with customers and
Partners, supporting our employees, and conducting business responsibly. This
includes considering our wider impact on society and the environment around
us, and supporting the UK's transition to net zero.
Based on our FY24 Diversity & Inclusion audit, we've developed a
Diversity, Inclusion and Belonging (DI&B) vision and strategy to ensure
our employees feel they belong and can achieve their full potential. We also
launched a new employee-led Belonging Group with the aim of celebrating and
supporting neurodiversity at UW, bringing the total number of Belonging Groups
to seven. Our DI&B initiatives have enabled us to exceed our targets for
management roles held by women and ethnically diverse employees, helping us
achieve our commitment to career progression for all.
As UK families face ongoing cost-of-living challenges, we are proud to help
customers save on household services, while offering Partners an opportunity
to earn additional income. Last year, we commissioned research to assess the
socio-economic impact of our Partner opportunity and were thrilled to discover
that 86% of the Partners who participated felt that being able to earn
flexibly through UW had improved their quality of life; 79% said that this
income had provided them with a greater sense of financial empowerment and 53%
stated the boost in skills and confidence enabled them to increase their
income outside UW, change jobs, progress their career or start their own
business.
We continue supporting vulnerable customers nationwide through our
company-funded Hardship Fund, while our new Electric Vehicle (EV) tariff and
enhanced Smart Export Guarantee (SEG) tariff help us to better serve our
customers as the UK's energy retail market continues to evolve alongside the
UK's transition toward net zero.
Our FY26 ESG objectives demonstrate our ongoing commitment to sustainability,
with further details available in our ESG and Sustainability Reports.
Corporate governance
The UK Corporate Governance Code (the "Code") encourages the Chairman to
report personally on how the principles in the Code relating to the role and
effectiveness of the Board have been applied.
As a Board we are responsible to the Company's shareholders for delivering
sustainable shareholder value over the long term through effective management
and good governance. A key role of mine, as Non-Executive Chairman, is to
provide strong leadership to enable the Board to operate effectively.
We believe that open and rigorous debate around the key strategic issues,
risks and opportunities faced by the Company is important to achieving our
objectives and the Company is fortunate to have non-executive directors with
diverse and extensive business experience who actively contribute to these
discussions.
Further detail on the Company's governance processes and compliance with the
Code is set out in the Corporate Governance Statement in the Annual Report.
Dividend and capital allocation
The Company continues to deliver strong underlying cash generation,
notwithstanding our ongoing double-digit organic customer growth.
We are proposing a final dividend of 57p (2024: 47p), bringing the total for
the year to 94p (2024: 83p); an increase of over 13%. Subject to approval by
shareholders at the Company's AGM which will be held on 6 August 2025, this
will be paid on 15 August 2025 to shareholders on the register at the close of
business on 25 July 2025. This takes the total return to shareholders for FY25
to 80% of adjusted post-tax profit.
The Board adopts a disciplined approach to the allocation of capital, with the
overriding objective being to enhance long-term shareholder value, whilst
maintaining an appropriate level of gearing; this means retaining sufficient
resources within the business to ensure that our organic growth is not
constrained by lack of capital. We intend to continue following a progressive
distribution policy, returning 80-90% of adjusted post-tax profit to
shareholders over the medium term via dividends.
Board changes
Stuart Burnett assumed overall responsibility for the business as sole CEO at
the AGM in August 2024, following the departure of former Co-CEO Andrew
Lindsay. Andrew is continuing to support our Partner network on a part-time
basis as President of Team Purple.
We also welcomed Bindi Karia as a new independent non-executive director to
the Board following the AGM. We expect her extensive experience, particularly
in technology and innovation (where she has held senior board, investment, and
advisory roles across the technology sector in Europe), to be of considerable
value over the coming years.
As announced on 24 June, we look forward to welcoming Gemma Godfrey and Phil
Bunker who will be joining the Board following the forthcoming AGM in August,
and I would like to take this opportunity to thank Bea Hollond and Andrew
Blowers, who are stepping down from the Board at the AGM in August and in
December respectively, for the significant contributions both of them have
made over the last c. nine years as non-executive directors. Suzi Williams
will be assuming the role of Senior Non-executive Director following Bea
Hollond's departure.
Outlook
Significant growth opportunity
UW remains in a unique position as the UK's only fully integrated provider of
a broad range of subscription-style essential household services, spanning
energy, broadband, mobile and insurance. Our multiservice proposition delivers
long-term savings funded by the inherent efficiency of our integrated
platform, with significant and growing appeal. This sustainable cost advantage
sets us apart from our competitors, each of whom are focused on individual
market segments. With 97 out of every 100 UK households taking their essential
household services from one of these other suppliers, our growth opportunity
has barely been tapped.
Since FY21, we have grown our customer numbers at an annualised compound rate
of around 15.3%, spanning a period during which energy commodity prices
increased steeply and then fell sharply, before stabilising at or around
current levels. During the period of steeply rising energy prices, our
annualised customer growth rate was in excess of 20% (albeit on a smaller
opening customer base), whilst during the periods of both falling and now
broadly stable prices our annualised organic growth rate has been consistently
between 12-14%, giving us confidence in our ability to continue growing our
customer base at a compound annual double digit growth rate to two million
households (and beyond) over the medium term.
Regulatory environment
We now operate in a more sustainable and responsible regulatory environment
for retail energy suppliers. The combination of new capital adequacy
requirements being imposed upon suppliers and the low regulatory EBIT margin
allowed by Ofgem, make it extremely challenging for any standalone energy
supplier to sell below the level of the price cap and earn an acceptable
return on capital. As a result, we are uniquely positioned to out-compete over
the longer term, increasing our market share both sustainably and profitably.
Notwithstanding these constraints, the retail energy market remains
competitive, with the major energy suppliers actively seeking to acquire new
customers through offering a range of attractive fixed price introductory
tariffs, supported by the recent significant fall in the wholesale energy
forward price curve; but importantly, pricing remains rational.
Energy prices & operating costs
The average energy price in FY26 is currently expected to remain relatively
stable compared with FY25, settling between around £1,650 and £1,750. Ofgem
has also undertaken a review of the operating cost allowances within the
energy price cap, to reflect the progress made across the industry in
delivering efficiencies over recent years. Together with the recent increases
in National Insurance and National Living Wage announced in the budget last
year, this will present a modest headwind in FY26, which we will look to
mitigate through further economies of scale and other operating cost savings.
Looking forward, we retain a number of levers for expanding our EBITDA per
customer over time, including optimising our multiservice pricing, growing
service penetration and improving our operating leverage.
Guidance
We remain focused on growing the size of the business to two million customers
(and beyond), with the following medium-term internal base case planning
assumptions:
● Annual percentage customer growth is expected to remain within the
10-15% range.
● Adjusted pre-tax profits are expected to increase broadly in line
with customer growth.
● Excess capital will be returned to shareholders through a
progressive dividend with a payout of between 80-90% of adjusted post-tax
profit.
For FY26 specifically, we anticipate that:
● adjusted pre-tax profits will be within a range of £132m-£138m
which is slightly below the level of customer growth due to the one-off
headwinds referred to above;
● total customer growth will be around 15% (including the balance of
the customers to be transferred from TalkTalk), with continuing low double
digit organic customer growth; and
● dividend growth will be in line with our increased adjusted post-tax
profit.
We will continue to invest in our people and technology at all levels as we
continue to scale - both of which are vital to delivering an exceptional UW
experience - whilst evolving and improving our systems and digital
capabilities. During what seems likely to be a challenging period for the
global economy, we are fortunate that our business model makes us largely
immune to any changes in trade tariffs, interest rates, economic growth or
business confidence. Indeed, such environments have historically been positive
for us, with increasing numbers of people seeking additional income sources
and ways to reduce their household bills. At the same time, many households in
the UK are also struggling with the question of how to provide for a
comfortable retirement; we remain convinced that our Partner opportunity is a
compelling answer to that challenge for people from all backgrounds and walks
of life.
I would like to thank my boardroom colleagues for their support and all our
staff and Partners for their energy, determination and commitment through
another excellent year of growth, and for the significant contribution they
are making to the ongoing strong performance of the business.
We have once again grown our customer base by a double-digit percentage in
FY25 and remain firmly on track to achieve our next milestone of more than two
million customers over the medium term. We expect to make significant further
progress towards this over the current year.
Charles Wigoder
Non-Executive Chairman
24 June 2025
Chief Executive's Review
The year in summary: record customers, profits and dividend
Over our 25+ year history, we have consistently helped households save time
and money on their essential services, which include energy, broadband, mobile
and insurance. Our unique multiservice proposition continues to deliver
exactly what financially stretched and time poor households are looking for;
namely savings, simplicity and service. At the same time, our word of mouth
Partner model is increasingly suited to the needs of modern society, enabling
people from all walks of life to generate an additional income in their spare
time which fulfils their immediate needs as well as contributing to
longer-term financial security.
With rational competition now firmly embedded in the retail energy market, the
company has continued to perform strongly, clearly demonstrating the enduring
ability of our subscription-style business model to deliver double-digit
organic growth under every wholesale energy price environment. The profitable
growth trajectory we have delivered over the last three and a half years gives
us confidence in the strength of our business model and the achievability of
our medium-term ambition to increase our customer base to more than two
million customers, alongside continuing strong and sustainable growth in our
earnings and dividends.
We welcomed 152,119 additional customers to UW during the year, representing a
growth rate of 15.0%, of which 12.6% was organic. This takes the total number
of customers we supply to a record high of 1,163,608 (2024: 1,011,489).
Ongoing multiservice take-up amongst new customers seeking to maximise the
savings that they can make on their household bills resulted in the number of
services we supply to our customers increasing by a further 265,496, to a
total of 3,392,593 (2024: 3,127,097).
Over many years we have built up a large UK-wide community of Partners; people
from all walks of life who are genuine advocates for our unique proposition.
They overcome the natural inertia that exists to simultaneously switching
multiple essential household services by personally explaining to family,
friends, work colleagues and acquaintances the convenience of a single UW
account for all their household services, the long-term value we offer, and
the award-winning service we provide. This unique approach enables us to
successfully grow our multiservice customer base in a way that other customer
acquisition strategies cannot replicate.
Whilst the dynamics in each of our markets constantly vary, we continue to
focus our efforts on strengthening our core multiservice proposition and
supporting our Partner community.
During the year, we continued to innovate and evolve our multiservice customer
offering, launching our first EV charging tariffs, which offer market-leading
overnight charging rates for our multiservice customers, alongside a more
competitive and market leading 'multi-SIM' mobile offer, and we extended our
Full Fibre offering by launching a 900Mbps ultra-high-speed service.
We continue to see strong interest in our Partner opportunity, as confidence
in the strength of our customer proposition continues to build, enhanced by
these new initiatives. The total number of UW Partners increased during the
year to 71,710 (2024: 68,251). This underpins the sustainability of our
growth, with our Partners being a unique route to market for referring
high-quality customers in significant volumes. There are over 20 million
people in the UK with a second or third part-time income - a trend which is
driven by changing societal attitudes towards work, as well as the ongoing
pensions crisis which emphasises the need to build a sustainable retirement
income, for which our Partner opportunity is a compelling solution.
We remain proud of the consistent and disciplined approach we have adopted to
building a long-term, sustainable and consistently profitable business, rather
than simply looking to grow at any cost. In a year which saw increased
marketing and customer acquisition activity across both the energy and
telecoms industries, and rising premia in the insurance sector, we have
concentrated our efforts on delivering on our three key business priorities:
● Supporting strong customer growth
● Improving customer service
● Transforming operational efficiency
We are pleased to have made significant progress against these priorities,
laying the foundations for further progress in the years ahead.
Strong customer growth
● Our market leading proposition combined with our unique word of
mouth Partner network allows us to focus on acquiring high-quality
multiservice homeowner customers. Our proposition was strengthened during the
year with the launch of our first EV tariffs, 900Mbps ultra-high-speed Full
Fibre broadband and a new multi-SIM offering, contributing to organic customer
growth of 12.6%.
Improving customer service
● We provide award-winning customer service which is fundamental to
giving our Partners the confidence to refer us to their friends and family.
During the year we invested in our WhatsApp channel for faster query
resolution across multiple verticals. We made an AI chatbot available for
customers on a 24/7 basis as well as a chatbot for Partners. The strength of
our customer service was recognised by Uswitch which awarded UW "Best Customer
Service" and "Best Value for Money" in their 2024 Energy Awards. We also
became a Which? Recommended Provider for both Energy and Broadband and twice
won Top Energy Supplier for Customer Service from Citizens Advice.
Transforming operational efficiency
● We focused this year on embedding a culture of managing performance
and goal setting, especially for People Leaders. This also applied to
operations where we're implementing scalable structures to maximise efficiency
and enhance the customer experience. This includes eliminating duplication and
improving team, department, and role design across all areas of our operations
function. Through the increased use of technology and AI tools we were able to
limit hiring for new customer service roles.
The current market environment offers significant opportunities for our
business to continue increasing our market share. Our unique business model
and structural cost advantages allow us to sustainably outcompete by giving
our customers what they want - long-term savings on their essential household
services, and an additional income from referring these savings to their
friends, family and social network.
Having continued our strong double-digit momentum in customer growth, we are
firmly on track to achieve our next milestone of more than two million
customers over the medium term, and we look forward to making significant
further progress towards this over the coming year.
Our business model
We have a unique, self-reinforcing and long-term business model - we are the
UK's only integrated platform for subscription-style essential household
services, spanning energy, broadband, mobile and insurance, as well as a
Cashback Card which provides extra savings at a wide range of retailers. The
discounts available to our customers increase with each service taken and our
subscription-style model leads to recurring and predictable profits and
cashflow.
We bundle essential home services together to give UW customers peace of mind,
sustainable long-term savings, a simple single monthly bill and award-winning
customer service; these ensure our customers stay with UW for far longer than
our competitors. The combination of higher revenues per customer (from taking
multiple services) and lower churn generate a significantly higher average
customer lifetime value.
By having a single set of central overheads for our multiple revenue streams,
we are able to make substantial cost savings due to operating efficiencies.
This gives us a sustainable, structural cost advantage which enables us to
offer the best value across our range of services, and offer significant
savings to our customers year after year.
Our Partner network gives us a unique way of acquiring hard-to-reach
multiservice homeowner customers. The perceived effort of switching multiple
services can be high amongst consumers, resulting in more conventional
advertising and marketing approaches typically failing to successfully convert
customers to a relatively complex multiservice proposition. In contrast, a
conversation with a trusted Partner can provide first-hand reassurance and
explanation of the switching process - often based on the Partner's personal
experience - thus helping to overcome any such concerns, as well as the
natural inertia associated with switching multiple essential household
services simultaneously.
By further strengthening our market-leading proposition, and keeping Partners
incentivised to sign up new customers in increasing volumes and with greater
consistency, we are confident we can continue successfully growing our
multiservice customer base in a way that other customer acquisition strategies
cannot replicate.
Unique platform for subscription-style essential household services
We enable customers to choose the essential services they want and combine
them together to create a unique multiservice proposition, all within one
integrated platform. These services include energy, broadband, mobile and
insurance as well as a pre-paid Cashback Card.
This approach provides:
- Simplicity: a single simple bill for all their home services.
- Savings: compared with the prices they were previously paying.
- Service: an easy-to-use customer app backed up by award-winning
customer support.
By offering customers the ability to receive all their essential home services
on a single monthly bill, and manage them on a single app, we deliver a
straightforward and cost-effective experience. The more services a customer
takes from us, the more they save.
A key component of our business model is the long-term relationships we have
built to secure high-quality and reliable wholesale services from
market-leading established industry providers, which we then bundle together
for our customers' benefit. We source our energy from E.ON, use Openreach and
CityFibre broadband via PXC for Broadband, and utilise the EE network (which
has the widest national coverage) for our mobile services. We have also
established insurance relationships with a number of major insurers, alongside
our own insurance company, UWI.
Unique structural cost advantage
Our unique multiservice customer proposition allows customers to bundle many
of their essential household services together with us. As a result, we
receive up to four revenue streams from each of our customers but have just
one back office supporting all the services we provide to them. This gives us
an inbuilt and enduring cost advantage that our competitors have been unable
to replicate and which we share with our customers year-on-year through
competitive prices.
This long-term, fair pricing approach, enhanced by award-winning customer
service and the convenience of having one bill, one account and one app to
manage all their household services, builds loyalty towards our brand; as a
result, our typical homeowning customers display below-market rates of churn
and lower bad debt, compounding our cost advantage.
A unique word-of-mouth model that creates earning opportunities
The key to acquiring new multiservice customers is our unique and
hard-to-replicate word-of-mouth acquisition model. Our network of over 71,000
Partners is motivated by the opportunity to earn additional income in the
context of continuing cost of living pressures; the satisfaction of helping
people to save money on their essential household services; the need to save
for retirement; and a long-term structural trend towards multiple incomes
which now comprises over 20 million individuals in the UK.
Our Partners receive a monthly commission based on the services being used by
the customers they have referred, with the opportunity in some cases to
receive a prepayment of some of this future commission as a lump sum. As
Partners refer more people to UW, who then choose to sign up as customers, and
grow their Partner teams, their income stream can continue to grow, creating a
truly life-changing potential earning opportunity. Our proposition provides
genuine alignment of interests between our Partners, customers and UW. Our
customers benefit from exceptional value, great service and a more convenient
way of buying their essential household services while our Partners can build
a valuable residual income stream.
Energy
During FY25 the Price Cap level varied between £1,568-£1,738, substantially
lower than the previous year. After the significant fall in customer
switching during the energy crisis, we have seen competition returning
strongly to the retail market this year, with fixed tariff offerings becoming
a key acquisition tool.
As a multiservice supplier, we are able to offer extremely competitive energy
tariffs as part of our multiservice bundle funded by a combination of
re-investing some of the margin we earn from supplying the broadband, mobile
and/or insurance services that our customers also take from us, and the
operational cost advantage we enjoy as an integrated multi-utility supplier.
In this competitive marketplace, most energy suppliers have experienced a
reduction in the size of their customer base, with UW being one of only two
suppliers who grew during Q1:25, successfully growing our energy portfolio
from 1,678,404 to 1,745,004 over the year. We are pleased to be a Which?
Recommended Energy Provider, having also won the Uswitch Energy Awards
categories for "Best Customer Service" and "Best Value for Money".
In September, we launched our first suite of EV tariffs, with pricing
dependent upon the number of other services taken. These are variable
time-of-use tariffs, enabling five hours of cheap overnight electricity for
charging the vehicle. This tariff type has proved popular with both existing
and new customers.
Our position at the forefront of the smart meter rollout programme led to a
significant decrease in our Ofgem installation target for this year. UW worked
with Calisen to deliver well beyond our Ofgem target; we are now at 75% (2024:
70%) penetration against a market average of 66% and we remain fully committed
to delivering further progress on this vital element of the UK's transition to
net zero.
Ofgem remains focused on its programme of retail market reform. Capital
Adequacy regulations have been in force since April 2025 to support market
sustainability. Ofgem is currently consulting on several topics relating to
Price Cap allowances for operating costs and debt. It has extended the ban on
acquisition tariffs, seeking to strike a balance between ensuring market
sustainability and encouraging rational competition between suppliers, and is
consulting on options to remove or reduce standing charges within the
price-capped variable tariff range.
Broadband
The broadband market remains highly competitive and is increasingly dominated
by introductory offers, with alternative full fibre networks attempting to
attract customers across from the main networks.
Our broadband numbers grew by 34,566 during the year to 409,358; an increase
of 9.2%.
Our growing relationship with CityFibre allowed us to launch a market-leading
six months free "Try Before You Buy" broadband offer, allowing customers to
install a new connection before cancelling their previous service. With this
promotion we ran a number of targeted campaigns in CityFibre areas, raising
awareness through flyers and a partnership with local radio.
We were delighted to be voted Which? Recommended Broadband Provider in March
2025 for the first time. This award, coupled with our router being awarded a
Which? Best Buy, highlights the excellent service we provide to our customers
at a time when everyone is becoming increasingly reliant on their broadband
connection. We also believe that our stance of not increasing prices
mid-contract is a key product differentiator, providing our customers with the
significant benefit of certainty over their broadband charges.
Our longstanding relationship with TalkTalk has seen us agree terms on a
cross-sell transaction, under which they will transfer c.95,000
fixed-line/broadband connections to UW with a view to our cross-selling
additional services. The first c.25,000 customers were transferred during
March, with the remainder being transferred over the coming months.
Mobile
Our mobile base has grown by 31% during the year and now stands at 610,689.
Throughout the year, we have continued to lead the market with the most
competitive Unlimited 'Multi-Sim' offering, with more than 50% of new
customers taking advantage of our market-leading offer. With the UK population
using more data than ever before, we believe our service provides the value
and peace of mind that customers need. We have also maintained the hugely
popular option for customers to receive free roaming whilst in the EU.
As the market continues to shift away from plastic SIM cards, we look forward
to offering eSIMs later this year, enabling customers to get quicker and more
convenient access to our services.
Insurance
This year was a transitional year for our insurance business. Following the
strong 38% growth in FY24, which saw us break the 100,000 policies milestone,
we paused sales of our insurance products for most of the year while we
reviewed our product offering with the FCA. Following this review, our
insurance products have been available to new UW customers since late April
this year. As a result, we have seen our insurance business return to growth,
and look forward to building on the exciting opportunities in this large and
diverse sector.
Cashback Card
Our unique Cashback card (CBC) has continued its growth, driving the outcomes
that differentiate our model, including: reduced churn, stronger brand
affinity and higher customer lifetime values. This year was once again a
record year, with our first "million pound months", namely months in which we
paid out more than £1 million in cashback to our customers (this happened
four times in the last six months).
Our rollout of open banking payments (branded as "Instant Bank Transfer") for
card top-ups has been highly successful, and now represents the vast majority
of CBC top-ups; helping to drive both higher customer satisfaction and
improved operational efficiency.
We have recently launched a trial of "3 months free" for new and existing
customers taking a CBC for the first time, and have seen a material increase
in the uptake of this product.
Investing for growth
Supporting our customers
To gain our customers' trust and ensure their long-term loyalty, we give them
an excellent standard of service, fair treatment, and swiftly resolve any
issues they might have. This is also important in delivering a proposition
which our Partners can confidently refer to their friends and family. This is
one of the key objectives for our operations and customer service teams.
Our investment in high-quality customer service across all sectors continues
to be highlighted externally as we achieved Which? Recommended Provider status
for both Energy and Broadband; the first company to hold both awards
simultaneously. To ensure that customers joining UW have a great experience we
have a dedicated welcome team who can assist customers in their first few
weeks across our energy, mobile, broadband and insurance services, whilst our
advanced routing technology allows us to route new customer calls
automatically to our specialist welcome advisors.
We continue to invest in our customer experience across all of our contact
points. Our fastest growing customer channel is our WhatsApp channel, first
introduced in FY24 and enhanced in FY25, which receives excellent feedback
from our customers. Customers can submit questions on a 24/7 basis and it is
able to auto-resolve queries rather than solely routing the question to a
customer services representative. It is currently resolving c.15% of customer
queries, which creates significant efficiencies both in terms of time and
cost. We also introduced a 24/7 chatbot for Partners, which is seeing very
high usage growth and helps our Partners find information and onboard
customers more quickly.
Our use of AI tools has expanded to assist our advisers in providing the very
best levels of service through the development of agent assist to place
accurate and concise knowledge in front of our teams when they are talking to
our customers. As a result, we are resolving our customers' queries quicker
than before and creating greater efficiency in our operations. We are
leveraging our more mature AI tools for greater impact, including using the
data gathered from our call transcripts to become more precise in
understanding our customers' most frequent requests. We are also using AI to
identify cross-sell opportunities with increased accuracy. This includes
capturing customer renewal dates for various services and deepening the
customer relationship. We are building a new predictive model for churn using
the latest AI technology, and while this is still in development, we expect it
to become operational in FY26.
Supporting vulnerable customers continues to be a focus across UW and,
following a successful partnership between the UW Hardship Fund and Citizens
Advice, we have extended the programme for another year and increased
investment. This is alongside our dedicated energy prepayment customer service
hub in Selkirk, Scotland, which was set up to provide support to those in
greatest need.
Supporting our Partners
We continue to invest in and improve our customer proposition which is
enhanced by our best in class customer service and attractive savings on our
bundled packages. Improvements to our proposition during the year included our
first market-leading EV charging tariff, our fastest ever Full Fibre broadband
at 900Mbps and the expanded range of unlimited mobile SIMs which qualify for
further discounts as an additional service. These innovations were warmly
welcomed by our Partners, increasing their ability and confidence to refer the
UW offer to friends, family and their wider social networks.
There are several long-term structural drivers which we believe will
accelerate demand for our Partner opportunity. This includes the increasing
prevalence of individuals earning an additional part-time income; there are
now over 20 million in the UK and we expect this figure to continue to grow.
This is driven somewhat by the more recent but irreversible trend of working
flexibly from home and the increasing need to enhance residual income for use
in retirement, otherwise known as the "pensions crisis", a topic which is set
to garner more public and government interest and urgency as time goes on.
This is supplemented by a more immediate need for a flexible and satisfying
way of earning additional income due to the ongoing cost-of-living crisis,
combined with the satisfaction of helping people to get a better deal on their
essential household services.
Our Partners come from all walks of life and play a key role in unlocking the
acquisition of high-value multiservice customers, and the ongoing growth of
our Partner community puts us in a strong position for continued high-quality
customer acquisition. We are hugely proud of the positive societal impact our
Partner business model is having by generating additional income and flexible
work opportunities, while at the same time lowering customer bills and
providing outstanding customer service.
We continue to invest in our Partners through modern digital tools and
training, as well as the ability to work flexibly. In FY25 we enhanced our
offer to Partners through the first of its kind "Free Energy Club" which
incentivises greater consistency of homeowner customer acquisition by
rewarding Partners with an increasing number of free months of energy the more
customers they refer. This uses the proven psychology of building "streaks" to
create more beneficial behaviour and outcomes for both the Partner and UW. As
customers benefit from exceptional value, great service and a more convenient
way of buying their essential household services, and Partners build a
valuable residual income stream, there is a genuine alignment of interests
between our Partners, customers and UW.
Operational performance and non-financial KPIs
We had another record year with customer numbers rising by 15.0% (2024: 14.1%)
to 1,163,608. Excluding the 25,000 broadband customers acquired from
TalkTalk, organic growth was 12.6%.
As in FY24, our customer acquisition efforts were focused on residential
customers, with our business offering remaining closed to new customers.
During the course of FY26, we expect to relaunch our offering to new business
customers, which will benefit from our new "Connectors" proposition which
enables local businesses and community organisations to generate income from
referring their customers and/or members to our Partners.
Customers 2025 2024
Residential 1,151,071 995,892
Business 12,537 15,597
Total 1,163,608 1,011,489
Going forwards we will report on both total customer numbers, and also total
customer numbers excluding inorganically acquired customers (for example,
those acquired from TalkTalk) except to the extent that they have elected to
upgrade or take additional services from us.
The total number of services we supply to our customers grew by 8.5% (2024:
11.8%) to 3,392,593.
Services 2025 2024
Core services
Energy 1,745,004 1,678,404
Broadband 409,358 374,792
Mobile 610,689 466,216
Insurance 122,856 139,109
Other services
Cashback Card 484,196 448,529
Legacy telephony 20,490 20,047
Total 3,392,593 3,127,097
Note: the table above sets out the individual services supplied to
customers. Legacy telephony comprises non-geographic numbers (08xx) and
landline only (no broadband) services provided.
Customers can take any combination of services - energy, broadband, mobile or
insurance - they want from us. The more services a customer takes, the greater
the savings they make. There is also a clear correlation between the number of
services taken and the customers' expected lifetime value to the business.
We are pleased to have delivered healthy growth across our energy, mobile and
broadband services during the period. In particular, we saw 31% growth in
mobile services following the introduction of a more competitive and
market-leading multi-SIM mobile offer.
However, overall service growth was somewhat behind customer growth, mainly
reflecting the temporary pause on new sales for some insurance products (which
continued until April 2025). Other factors included strong demand for our
mobile only service, greater take up of our two-service tariff compared with
the three-service tariff and greater energy churn relating to increased
competitive intensity and our lack of an EV tariff until the end of the first
half of the year.
Average number of Core services taken by new residential customers signed up
by Partners
Q1 FY24 2.31
Q2 FY24 2.34
Q3 FY24 2.37
Q4 FY24 2.31
Q1 FY25 2.25
Q2 FY25 2.33
Q3 FY25 2.24
Q4 FY25 2.28
The average number of Core services taken by new customers is a key metric
that underpins long-term business sustainability: customers taking two or more
Core services from us are benefitting from a genuinely differentiated
proposition, as well as greater ongoing savings, meaning that they are less
likely to leave us.
Our focus on having a strong customer proposition and award-winning service
pays off in our market-leading levels of customer loyalty, and with rational
competition now firmly entrenched within the energy market, our annualised
energy churn increased to 13.7% (2024: 8.7%), resulting primarily from the
large gap that opened up at various stages during the year between the level
of the price cap (which determines variable energy pricing levels) and forward
energy wholesale prices (which determine fixed energy tariff levels); the
energy price cap is expected to decrease from July and remain relatively
stable during the remainder of FY26, and as a result we expect our churn rates
to decline as we move through the year.
The year ahead: our three FY26 business priorities
We have set our business priorities in order to sustain a level of growth
which will allow us to reach our target of more than two million customers
over the medium term. Our priorities reflect the importance of making our
customer proposition truly outstanding, improving and digitising the customer
experience, and scaling the UK's number one additional income opportunity.
This will be powered by our 'DNA' and our brand, improving our people
leadership, ways of working together, and further embedding a performance
culture.
1. Make our proposition epic
We aim to deliver continuing double-digit customer growth by making our
customer proposition truly epic. This means doubling down on one of our key
competitive advantages: our multiservice offering. We will strengthen the
offering by adding additional features in mobile such as Voice over Internet
Protocol (VoIP) and eSIM, evolve our energy proposition with the rollout of
'Free Energy Days' for customers, and by developing the cross-sell of
additional services into both the customers acquired from TalkTalk and our
existing customer base.
We will also enhance our offering by adding additional exciting features and
benefits to our cashback card to make it more central in the minds of our
customers as well as increasing the number and scale of our commercial
partnerships. Finally, we will enhance customer loyalty by deploying
sophisticated AI tools which generate insights into the triggers for customer
churn.
2. Transforming and digitising the customer service experience
We will further improve our award-winning customer service to enhance the
customer and adviser experience, while at the same time driving greater
digitisation and automation to create maximum ease for the customer as well as
efficiencies for the company. This includes focusing on processes which
deliver an improvement in our rate of "first time resolution" and "no touch
resolution" including increased uptake of our WhatsApp channels.
We will support our advisers in moving from a reactive to a proactive approach
to customer service, including features such as AI co-pilot support,
streamlined onboarding, and proactive cross-sell.
3. Scale the UK's leading additional income opportunity
We will drive greater engagement for both new and existing Partners and
increase the attractiveness of the UK's number one additional income
opportunity; alongside a meaningful upfront income, the Partner opportunity
uniquely offers a long-term recurring income which we expect to be
increasingly attractive in the face of the ever-increasing pensions crisis. We
will achieve this by increasing the targeting and personalisation of our
Partner recruitment and engagement communications through the use of
technology and providing them with the right tools and training to keep them
motivated, confident and active.
We have recently launched a new type of Partner proposition called Connectors
in which Partners can sign up local businesses or community organisations to
refer their customers to UW. This also opens up an opportunity for major brand
partnerships which could accelerate our growth. We will also amplify the
social impact of being a Partner by rewarding and recognising those who are
Community Champions which will in turn inspire others to contribute and give
back.
Stuart Burnett
Chief Executive Officer
24 June 2025
Financial Review
Overview of results
Adjusted Statutory
2025 2024 Change 2025 2024 Change
Revenue £1,838.2m £2,039.1m (9.9)% £1,838.2m £2,039.1m (9.9)%
Gross profit £358.1m £355.2m 0.8% £358.1m £355.2m 0.8%
Profit before tax £126.3m £116.9m 8.1% £105.9m £100.5m 5.4%
Basic EPS 119.2p 109.0p 9.4% 96.3p 89.9p 7.1%
Dividend per share 94.0p 83.0p 13.3% 94.0p 83.0p 13.3%
Throughout this report the Group presents various alternative performance
measures ('APMs') in addition to those reported under IFRS. The measures
presented are those adopted by the Chief Operating Decision Maker ('CODM',
deemed to be the Chief Executive Officer), together with the main Board, and
analysts who follow us in assessing the performance of the business. In
order to provide a presentation of the underlying performance of the group,
adjusted pre-tax profit and adjusted basic EPS exclude share incentive scheme
charges of £3.4m (2024: £5.2m), the amortisation of the intangible asset of
£11.2m (2024: £11.2m) arising from entering into the energy supply
arrangements with E.ON (formerly npower) in December 2013; this decision
reflects both the relative size and non-cash nature of these charges. In
FY25 adjusted pre-tax profit and adjusted EPS also exclude one-off
restructuring costs of £5.7m (2024: £Nil); this decision reflects the
one-off non-recurring nature of the charges. The reconciliations for
adjusted pre-tax profit and adjusted EPS are set out in notes 2 and 3
respectively of the financial statements.
Summary
The current financial year represented a strong performance by the Group with
double-digit percentage customer growth, record profits and a record
dividend. The Group finished the year in a strong financial position with
gearing at 0.8x adjusted EBITDA.
Adjusted pre-tax profit increased by 8.1% to £126.3m (2024: £116.9m) on
revenues of £1,838.2m (2024: £2,039.1m). Statutory profit before tax
increased by 5.4% to £105.9m (2024: £100.5m). The fall in revenues
primarily reflects lower energy prices during the year. The increase in
adjusted pre-tax profit reflects the continued impact of strong organic growth
in both customer and service numbers, and increased operational efficiencies,
partly offset by lower energy prices.
Distribution expenses fell to £45.7m (2024: £51.3m), mainly reflecting the
fall in revenues from lower energy prices, partly offset by organic growth in
customer and service numbers.
Administrative expenses (excluding share incentive scheme charges,
amortisation of the energy supply agreement intangible and restructuring
costs) fell during the year to £144.4m (2024: £151.9m), largely due to lower
staff costs arising from improved operating efficiencies.
The bad debt charge for the year (which is separately identified on the income
statement as impairment loss on trade receivables) increased to £33.4m (2024:
£30.7m), representing 1.8% of revenues for the year (2024: 1.6% of underlying
revenues), largely due to the continued impact from the temporary moratorium
on the involuntary installation of prepayment meters imposed by Ofgem.
Adjusted earnings per share increased by 9.4% to 119.2p (2024: 109.0p), with
statutory EPS increasing by 7.1% to 96.3p (2024: 89.9p). In accordance with
previous guidance, the Board is proposing to pay a final dividend of 57p per
share (2024: 47p), making a total dividend of 94p per share (2024: 83p) for
the year.
Revenues
The growth in the number of services we are supplying increased by 265,496
over the course of the year (2024: 328,949), taking the total number of
services provided to our customers to 3,392,593 (2024: 3,127,097).
The overall decrease in revenues mainly reflects lower prevailing energy
prices during the year, partially offset by the increase in the number of
services being supplied:
Revenues £m 2025 2024 Change
Electricity 903.1 1,066.7 (15.3)%
Gas 629.3 708.0 (11.1)%
Broadband 153.2 141.9 8.0%
Mobile 84.2 70.9 18.8%
Other 68.4 51.6 32.5%
Total Revenue 1,838.2 2,039.1 (9.9)%
Gross profit
Gross profit for the year increased to £358.1m (2024: £355.2m), primarily
driven by the growth in the number of services we supply, partly offset by
lower energy prices. Our overall gross margin for the year rose to 19.5%
(2024: 17.4%) due primarily to lower energy prices and the resulting reduced
proportion of lower margin energy revenue.
Distribution and administrative expenses
Distribution expenses include the costs of commission and incentives paid to
Partners, together with other direct costs associated with gathering new
customers. These fell to £45.7m (2024: £51.3m), mainly due to lower energy
prices, partly offset by growth in customer and service numbers.
Administrative expenses (excluding share incentive scheme charges, the
amortisation of the energy supply agreement intangible and restructuring
costs) decreased during the year to £144.4m (2024: £151.9m), mainly as a
result of lower staff costs. The restructuring costs (£5.7m) mainly
represent staff redundancy costs and were a result of a Company-wide
efficiency programme carried out during the year.
The bad debt charge for the year increased to £33.4m or 1.8% of sales (2024:
£30.7m; 1.6% of underlying revenues), mainly due to a continuing elevated
number of customers having difficulty paying their bills. The proportion of
customers with at least two energy bills outstanding increased to 3.4% (2024:
3.3%) across the year. The level has mainly been driven by the continued
impact from the temporary moratorium imposed by Ofgem in February 2023 on the
involuntary installation of prepayment meters for customers who refuse to pay
for their energy. Although this moratorium has now been lifted, it will take
time to ramp up debt recovery processes back to previous levels. Bad debt
across the industry is recovered through the relevant Ofgem price cap
allowance, all of which accrues to the Group.
Cash, capital expenditure, working capital and borrowings
2025 2024 2023 2022 2021
Adjusted EBITDA (£'000)
148,095 133,251 110,118 73,760 66,446
Net debt (£'000) (115,865) (122,501) 103,424 (70,334) (71,416)
Net debt/adjusted EBITDA ratio
0.8x 0.9x -0.9x 1.0x 1.1x
The Group ended the period with a reported net debt position including lease
liabilities of £115.9m (2024: £122.5m), comprising cash of £79.0m (2024:
£57.8m) less bank loans of £191.7m (2024: £176.5m) and lease liabilities of
£3.2m (2024: £3.8m). The Group's net debt/adjusted EBITDA ratio of 0.8x is
calculated using adjusted EBITDA of £148.1m (representing operating profit of
£115.9m, plus depreciation and amortisation of £23.1m, share incentive
scheme charges of £3.4m and restructuring costs of £5.7m, see note 1).
The Group's net working capital position showed a year-on-year cash outflow of
£3.2m (excluding the prepayment of the purchase of customer contracts)
following the unwind of the government's energy support scheme in the prior
year (2024: cash outflow of £239.8m, mainly reflecting the expected unwinding
of funds associated with the previously mentioned government's energy support
scheme that were received in advance of the year end in FY23).
Capital expenditure of £17.2m (2024: £12.5m) related primarily to our
ongoing investment in our technology platform and software, to support our
ability to continue delivering an efficient market leading customer
experience.
Dividend
The final dividend of 57p per share (2024: 47p) will be paid on 15 August 2025
to shareholders on the register at the close of business on 25 July 2025 and
is subject to approval by shareholders at the Company's Annual General Meeting
which will be held on 6 August 2025. This makes a total dividend payable for
the year of 94p (2024: 83p).
Share incentive scheme charges
Operating profit is stated after share incentive scheme charges of £3.4m
(2024: £5.2m). These relate to an accounting charge under IFRS 2 Share Based
Payments ('IFRS 2'). As a result of the relative size of share incentive
scheme charges as a proportion of our pre-tax profits historically, and the
fluctuations in the amount of this charge from one year to another, we are
continuing to separately disclose this amount within the Consolidated
Statement of Comprehensive Income for the period (and excluding these charges
from our calculation of adjusted profits and earnings) so that the underlying
performance of the business can be clearly identified in a consistent manner
to that adopted during previous periods. Our current adjusted earnings per
share have also therefore been adjusted to eliminate these share incentive
scheme charges.
Taxation
The tax charge for the year is £29.9m (2024: £29.4m). The effective tax rate
for the year was 28.2% (2024: 29.3%), primarily reflecting the ongoing
amortisation charge on our energy supply contract intangible asset (which is
not an allowable deduction for tax purposes).
Nick Schoenfeld
Chief Financial Officer
24 June 2025
Principal Risks and Uncertainties
Background
The Group faces various risk factors, both internal and external, which could
have a material impact on long-term performance. However, the Group's
underlying business model is considered relatively low risk, with no need for
management to take any disproportionate risks in order to preserve or generate
shareholder value.
The Group continues to enhance a consistent and systematic risk identification
and management process, which involves horizon scanning for emerging risks
(e.g. maintaining good relationships with industry bodies, consultants and
regulators to monitor key developments which might impact the Group,
monitoring relevant press commentary, and keeping abreast of the latest
threats in relation to cyber security through industry experts and
publications), risk ranking, prioritisation and subsequent evaluation, all
with a view to ensuring significant risks have been identified, prioritised
and (where possible) eliminated, and that systems of control are in place to
manage any remaining risks.
The directors have carried out a robust assessment of the Company's emerging
and principal risks. A formal document is prepared by the executive
directors and senior management team on a regular basis detailing the key
risks faced by the Group and the operational controls in place to mitigate
those risks; this document is then reviewed by the Audit and Risk Committee.
Save as set out below, the magnitude of any risks previously identified has
not significantly changed during the period.
Business model
The principal risks outlined below should be viewed in the context of the
Group's business model as a reseller of utility services (gas, electricity,
fixed line telephony, mobile telephony, broadband and insurance services)
under the Utility Warehouse and TML brands. As a reseller, the Group does not
own any of the network infrastructure required to deliver these services to
its customer base. This means that while the Group is heavily reliant on third
party providers, it is insulated from all the direct risks associated with
owning and/or operating such capital-intensive infrastructure itself.
The Group is able to secure the wholesale supply of all the services it offers
at competitive rates, enabling it to generate a consistently fair level of
profitability from delivering a great value bundled proposition to its
customers. There is an alignment of interests between the Group and its
wholesale suppliers which means that it is in the interests of the suppliers
to ensure that the Group remains competitive, driving growth and maximising
their benefit from our complementary route to market. Furthermore, the Group
benefits from a structural cost advantage, due to the multiple revenue streams
it receives from customers who take more than one service type, and only
having one set of overheads. The Group has alternative sources of wholesale
supply should an existing supplier become uncompetitive or no longer
available.
In relation to energy specifically (representing over 80% of revenues), the
Group's wholesale costs are calculated by reference to the Ofgem price cap,
which gives the Group considerable visibility over profit margins.
The Group mainly acquires new customers via word-of-mouth referrals from a
large network of independent Partners, who are paid predominantly on a
commission basis. This means that the Group has limited fixed costs associated
with acquiring new customers.
The principal specific risks arising from the Group's business model, and the
measures taken to mitigate those risks, are set out below.
Reputational risk
The Group's reputation amongst its customers, suppliers and Partners is
believed to be fundamental to the future success of the Group. Failure to meet
expectations in terms of the services provided by the Group, the way the Group
does business or in the Group's financial performance could have a material
negative impact on the Group's performance.
In developing new services, and in enhancing current ones, careful
consideration is given to the likely impact of such changes on existing
customers.
In relation to the service provided to its customer base, reputational risk is
principally mitigated through the Group's recruitment processes, a focus on
closely monitoring staff performance, including the use of direct feedback
surveys from customers (Net Promoter Score), and through the provision of
rigorous staff training.
Responsibility for maintaining effective relationships with suppliers and
Partners rests primarily with the appropriate member of the Group's senior
management team with responsibility for the relevant area. Any material
changes to supplier agreements and Partner commission arrangements which could
impact the Group's relationships are generally negotiated by the executive
directors and ultimately approved by the full Board.
Information technology risk
The Group is reliant on in-house developed and supported systems, and
third-party specialist platforms for the successful operation of its business
model. Any failure in the operation of these systems could negatively impact
service to customers, undermine Partner confidence, and potentially be
damaging to the Group's brand. Application software is developed and
maintained by the Group's Technology Team to support the changing needs of the
business using the best 'fit for purpose' tools and infrastructure.
Third-party systems have been selected based on industry performance and track
record, as well as the ability to support the Group's strategy and ongoing
compliance requirements, and are managed by specialists within the Technology
team.
The Technology team is made up of highly skilled, motivated and experienced
individuals. The Group has a dedicated information security team which
provides governance and oversight ensuring the confidentiality, availability
and integrity of the Group's systems and operations whilst ensuring that any
risks and vulnerabilities that arise are managed and mitigated.
Changes made to the systems are prioritised by the business, and product
managers work with their stakeholders to refine application and system
requirements. They work with the Technology teams undertaking the change to
ensure a proper understanding and successful outcome. Changes are tested as
extensively as reasonably practicable before deployment. Review and testing
are carried out at various stages of the development by both the Technology
team and the operational department who ultimately take ownership of the
system.
The Group has strategic control over the core customer and Partner platforms
including the software development frameworks and source code behind these key
applications. The Group also uses strategic third-party vendors to deliver
solutions outside of its core competency. This largely restricts our
counterparty risks to services that can be replaced with alternative vendors
if required, albeit this could lead to temporary disruption to the day-to-day
operations of the business.
Monitoring, backing up and restoring of the software and underlying data are
made on a regular basis. Backups are securely stored or replicated to
different locations. Disaster recovery facilities are provided through
cloud-based infrastructure as a service and, in critical cases, maintained in
a warm standby or active-active state to mitigate risk in the event of a
failure of the production systems.
Data privacy, information security and cyber security
The Group processes sensitive personal and commercial data, and in doing so is
required by law to protect customer and corporate information and data, as
well as to keep its infrastructure secure. A breach of security could result
in the Group facing prosecution and fines as well as loss of business from
damage to the Group's reputation. Recovery could be hampered due to any
extended period necessary to identify and recover a loss of sensitive
information and financial losses could arise from fraud and theft. Unplanned
costs could be incurred to restore the Group's security.
The Group has deployed a robust and industry-appropriate Group-wide layered
data privacy and information/cyber security strategy, providing effective
control to mitigate the relevant threats and risks. The Group is Payment Card
Industry (PCI) compliant and external consultants conduct regular penetration
testing of the Group's internal and external systems and network
infrastructure.
The Information Commissioner's Office (ICO) upholds information rights in the
public interest and, where required, companies within the Group are registered
as data controllers with the ICO. If any of the companies within the Group
fail to comply with privacy or data protection legislation or regulations,
then such Group company could be subject to ICO enforcement action (which
could include significant fines).
Information, data and cyber security risks are overseen by the Group's
Information Security and Legal & Compliance teams.
Fraud risk
Fraud has the potential to impact the Group from a financial, regulatory and
reputational perspective. To mitigate and control the risk of fraud effective
controls are in place to identify and reduce incidents of fraud, actively
investigate potential fraud, and report on fraud activity and trends both
internally and to our industry partners. Fraud risks are overseen by the
Group's Fraud Team which sits within Legal & Compliance.
Legislative and regulatory risk
The Group is subject to various laws and regulations. The energy,
telecommunications and financial services markets in the UK are subject to
comprehensive operating requirements as defined by the relevant sector
regulators and/or government departments.
Amendments to the regulatory regime could have an impact on the Group's
ability to achieve its financial goals and any material failure to comply may
result in the Group being fined and lead to reputational damage which could
impact the Group's brand and ability to attract and retain customers.
Furthermore, the Group is obliged to comply with retail supply procedures,
amendments to which could have an impact on operating costs.
The Group is a licensed gas and electricity supplier, and therefore has a
direct regulatory relationship with Ofgem. If the Group fails to comply with
its licence obligations, it could be subject to fines, operating restrictions,
or ultimately the removal of its respective licences.
The regulatory framework for the UK's energy retail market, as overseen by
Ofgem, is subject to continuous development. Any regulatory change could
potentially lead to a significant impact on the sector, and the net profit
margins available to energy suppliers. The extent of regulatory change
continues to be substantial, with Ofgem leading the industry through a range
of consumer, market and policy objectives.
In parallel, there are substantial industry-wide change programmes, such as
the continuing rollout of smart meters and a process towards routine
half-hourly electricity metering. Ofgem has also completed the implementation
of its Financial Resilience reforms, significantly increasing its oversight of
suppliers' financial health and operational sustainability, including a new
Capital Adequacy regime under which energy suppliers are required to maintain
a minimum level of net assets per dual fuel customer of £115. The Group is
currently compliant with this requirement.
The Group is also a supplier of telecommunications services and therefore has
a direct regulatory relationship with Ofcom. If the Group fails to comply with
its obligations, it could be subject to fines or lose its ability to operate.
The Group is closely engaged in the relevant forums and industry groups to
both influence and prepare for the changes.
Within the Group, Utility Warehouse Limited is authorised and regulated by the
Financial Conduct Authority (FCA) as an insurance broker for the purposes of
providing insurance products to customers. Utility Warehouse Limited also
offers a prepaid card product to customers, known as the "Cashback Card",
enabling them to benefit from cashback on purchases from various retailers. In
addition, Utilities Plus Limited holds consumer credit permissions related to
the provision of Partner loans and hire purchase agreements. Further, in 2023
UWI became authorised for insurance underwriting in Gibraltar by the Gibraltar
Financial Services Commission (GFSC). If the Group fails to comply with
FCA/GFSC regulations, it could be exposed to fines, customer redress and risk
losing its authorised status, severely restricting its ability to offer
financial services products to customers and consumer credit products to
Partners.
Regulatory changes relating to insurance pricing practices and the FCA's
Consumer Duty have had a significant impact on the financial services sector
as a whole. The business has worked to deliver the Board-approved
implementation plan and will continue to be informed by any clarifications and
additional guidance issued.
In general, as the majority of the Group's services are supplied to consumers
in highly regulated markets, this could restrict the operational flexibility
of the Group's business. In order to mitigate this risk, the Group seeks to
maintain appropriate relations with both Ofgem, the Department for Energy
Security and Net Zero, Ofcom, the FCA and the GFSC. The Group engages with
officials from all these organisations on a periodic basis to ensure they are
aware of the Group's views when they are consulting on proposed regulatory
changes.
Political and consumer concern over costs, vulnerable customers and fuel
poverty may lead to further reviews and result in additional consumer
protection legislation being introduced. Political and regulatory developments
affecting the energy, telecommunications and financial services markets within
which the Group operates may have a material adverse effect on the Group's
business, results of operations and overall financial condition. The Group is
also aware of and managing the impact of a developing regulatory landscape in
relation to climate change and the net zero transition.
To mitigate the risks from failure to comply with legislative requirements, in
an increasingly active regulatory landscape, the Group's Legal &
Compliance team has developed and rolled out robust policies and procedures,
undertakes regular training across the business, and continually monitors
legal and regulatory developments. The team also conducts compliance and
assurance tests on the policies and procedures.
Financing risk
The Group has debt service obligations which may place operating and financial
restrictions on the Group. This debt could have adverse consequences insofar
as it: (a) requires the Group to dedicate a proportion of its cash flows from
operations to fund payments in respect of the debt, thereby reducing the
flexibility of the Group to utilise its cash to invest in and/or grow the
business; (b) increases the Group's vulnerability to adverse general economic
and/or industry conditions; (c) may limit the Group's flexibility in planning
for, or reacting to, changes in its business or the industry in which it
operates; (d) may limit the Group's ability to raise additional debt in the
long-term; and (e) could restrict the Group from making larger strategic
acquisitions or exploiting business opportunities.
Each of these prospective adverse consequences (or a combination of some or
all of them) could result in the potential growth of the Group being at a
slower rate than may otherwise be achieved.
Bad debt risk
Whilst the Group's focus on multiservice homeowners acts as a mitigating
factor against bad debt, the Group has a universal supply obligation in
relation to the provision of energy to domestic customers. This means that
although the Group is entitled to request a reasonable deposit from potential
new customers who are not considered creditworthy, the Group is obliged to
supply domestic energy to everyone who submits a properly completed
application form. Where customers subsequently fail to pay for the energy they
have used, there is likely to be a considerable delay before the Group is able
to control its exposure to future bad debt from them by either switching their
smart meters to pre-payment mode, installing a pre-payment meter or
disconnecting their supply, and the costs associated with preventing such
customers from increasing their indebtedness are not always fully recovered.
Bad debt within the telephony industry may arise from customers using the
services, or being provided with a mobile handset, without intending to pay
their supplier. The amounts involved are generally relatively small as the
Group has sophisticated call traffic monitoring systems to identify material
occurrences of usage fraud. The Group is able to immediately eliminate any
further usage bad debt exposure by disconnecting any telephony service that
demonstrates a suspicious usage profile, or falls into arrears on payments.
Wholesale price risk
Whilst the Group acts as principal in most of the services it supplies to
customers, the Group does not own or operate any utility network
infrastructure itself, choosing instead to purchase the capacity needed from
third parties. The advantage of this approach is that the Group is largely
protected from technological risk, capacity risk or the risk of obsolescence,
as it can purchase the precise amount of each service required to meet its
customers' needs.
Whilst there is a theoretical risk that in some of the areas in which the
Group operates it may be unable to secure access to the necessary
infrastructure on commercially attractive terms, in practice the pricing of
access to such infrastructure is typically either regulated (as in the energy
market) or subject to significant competitive pressures (as in the telephony
and broadband markets). The profile of the Group's customers, the significant
quantities of each service they consume in aggregate, and the Group's clearly
differentiated route to market has historically proven attractive to
infrastructure owners, who compete aggressively to secure a share of the
Group's growing business.
The supply of energy has different risks associated with it. The wholesale
price can be extremely volatile, and customer demand can be subject to
considerable short-term fluctuations depending on the weather. The Group has a
long-standing supply relationship with E.ON (formerly npower) under which the
latter is responsible for undertaking the buying and hedging of the energy
supplied to the Group, and where the price paid by the Group to cover
commodity, balancing and certain other associated supply costs is set by
reference to the Ofgem published energy price cap, which is set at the start
of each quarter; this may not be competitive against the equivalent supply
costs incurred by new and/or other independent suppliers. However, if the
Group did not have the benefit of this long-term supply agreement it would
need to find alternative means of protecting itself from the pricing risk of
securing access to the necessary energy on the open market and the costs of
balancing.
Competitive risk
The Group operates in highly competitive markets and significant service
innovations by others or increased price competition could impact future
profit margins, growth rates and Partner productivity. In order to maintain
its competitive position, there is a consistent focus on improving operational
efficiency. New service innovations are monitored closely by senior management
and the Group is generally able to respond within an acceptable timeframe
where it is considered desirable to do so, by sourcing comparable features and
benefits using the infrastructure of its existing suppliers. The increasing
proportion of customers who are benefiting from the genuinely unique
multi-utility solution that is offered by the Group, and which is unavailable
from any other known supplier, further reduces any competitive threat.
The Directors anticipate that the Group will face continued competition in the
future as new companies enter the market and alternative technologies and
services become available. The Group's services and expertise may be
rendered obsolete or uneconomic by technological advances or novel approaches
developed by one or more of the Group's competitors. The existing approaches
of the Group's competitors or new approaches or technologies developed by such
competitors may be more effective or affordable than those available to the
Group. There can be no assurance that the Group will be able to compete
successfully with existing or potential competitors or that competitive
factors will not have a material adverse effect on the Group's business,
financial condition or results of operations. However, as the Group's customer
base continues to rise, competition amongst suppliers of services to the Group
is expected to increase. This has already been evidenced by various
volume-related growth incentives which have been agreed with some of the
Group's largest wholesale suppliers. This should also ensure that the Group
has direct access to new technologies and services available to the market.
Infrastructure risk
The provision of services to the Group's customers is reliant on the efficient
operation of third-party physical infrastructure. There is a risk of
disruption to the supply of services to customers through any failure in the
infrastructure, e.g. gas shortages, power cuts or damage to communications
networks. However, as the infrastructure is generally shared with other
suppliers, any material disruption to the supply of services is likely to
impact a large part of the market as a whole and it is unlikely that the Group
would be disproportionately affected. In the event of any prolonged disruption
isolated to the Group's principal supplier within a particular market,
services required by customers could in due course be sourced from another
provider.
The development of localised energy generation and distribution technology may
lead to increased peer-to-peer energy trading, thereby reducing the volume of
energy provided by nationwide suppliers. As a nationwide retail supplier, the
Group's results from the sale of energy could therefore be adversely affected.
Similarly, the construction of 'local monopoly' fibre telephony networks to
which the Group's access may be limited as a reseller could restrict the
Group's ability to compete effectively for customers in certain areas.
Smart meter rollout risk
The Group is reliant on third party suppliers to fully deliver its smart meter
rollout programme effectively. In the event that the Group suffers delays to
its smart meter rollout programme, the Group may be in breach of its
regulatory obligations and therefore become subject to fines from Ofgem. In
order to mitigate this risk, the Group dual-sources (where practicable) the
third-party metering and related equipment they use.
The Group may also be indirectly exposed to reputational damage and litigation
from the risk of technical complications arising from the installation of
smart meters or other acts or omissions of meter operators, e.g. the escape of
gas in a customer's property causing injury or death. The Group mitigates this
risk through using established, reputable third-party suppliers.
Energy industry estimation risk
A significant degree of estimation is required in order to determine the
actual level of energy used by customers and hence what should be recognised
by the Group as sales. There is an inherent risk that the estimation routines
used by the Group to recognise sales do not in all instances fully reflect the
actual usage of customers. However, this risk is mitigated by the relatively
high proportion of customers who provide meter readings on a periodic basis,
and the high level of penetration the Group has achieved in its installed base
of smart meters.
Gas leakage within the national gas distribution network
The operational management of the national gas distribution network is outside
the control of the Group, including the management of gas leakage from the
network, however in common with all other licensed domestic gas suppliers the
Group is responsible for meeting its pro-rata share of the total leakage cost.
There is a risk that the level of leakage in future could be higher than
historically experienced, and above the level currently expected.
Underwriting risk
Operating our own in-house insurer requires taking on some underwriting risk.
We largely mitigate these risks through: (i) migrating highly predictable
existing lines of business, for which we have several years of trading
history, and have already achieved sufficient scale to maintain low volatility
and predictable returns; (ii) targeting conservative returns on capital
through a risk-averse investment strategy; (iii) where appropriate, using
conservative levels of reinsurance, including protection for catastrophe risks
such as storm, flood and freeze; (iv) using real-time and proprietary data,
such that we are aware of all risks incepted in real time, and are able to
price risks accurately, and manage overall portfolio exposure; and (v)
maintaining and growing our existing home insurance panel, such that our
in-house insurer can selectively target risk profiles that are suitable for
our balance sheet (e.g. houses with lower rebuild cost and not adversely
exposed to catastrophe (CAT) perils).
Acquisition risk
The Group may invest in other businesses, taking a minority, majority or 100%
equity shareholding, or through a joint venture partnership. Such investments
may not deliver the anticipated returns, and may require additional funding in
future. This risk is mitigated through conducting appropriate pre-acquisition
due diligence where relevant.
Climate change risk
Climate change has the potential to significantly impact the future of our
planet. Everyone has a role to play in reducing the effects of harmful
greenhouse gas emissions in our atmosphere and ensuring that we meet a 1.5°C
target in line with the Paris Agreement. No business is immune from the risks
associated with climate change as it acts as a driver of other risks and
impacts government decision-making, consumer demand and supply chains.
Development of climate-related policy, regulatory changes and shifts in
consumer sentiment could impact on the Group's ability to achieve its
financial goals and result in increased compliance costs or reputational
damage.
In recognition of this, climate change risk is integrated into the Group's
risk management framework. Climate change is designated as a standalone
principal risk for the business and the Legal & Compliance Director is
assigned as the owner for managing this risk. It is designated as a controlled
risk due to the Group's agile reseller business model which means the business
is strategically resilient as it is able to respond quickly to climate change
developments and is insulated from more severe direct physical risks. The risk
is further mitigated through the Group's approach to understanding and
monitoring the developments and the impacts from climate change. The
Environmental Social and Governance (ESG) Strategy Committee, consisting of
the ESG Board Champion, CEO, CFO, Company Secretary, Executive Leadership Team
and senior management is updated by the ESG Working Group on climate issues.
Climate issues are then assessed and used to inform the Group's strategy as
needed. We have a dedicated Head of Sustainability and continue to use
external specialists as needed.
The Group is committed to achieving net zero greenhouse gas emissions. In FY23
we evaluated our emissions and target against recognised standards. We
modelled our emissions trajectory and used credible assumptions on external
factors that, as a reseller, will strongly influence the Group's
decarbonisation ability including our key suppliers' decarbonisation plans and
the UK government's published projections about the decarbonisation trajectory
of the UK energy grid.
Based on this analysis we committed to our target to be Net Zero on or before
2050, across scopes 1, 2 and 3 to allow us to implement a credible
science-based plan by aligning with the UK government and our key suppliers.
We set an interim target to reduce emissions by 63% across Scopes 1, 2, and 3
by 2035, from an FY22 emissions baseline, in line with a 1.5c world. The Group
will have its targets validated by the Science-Based Targets Initiative
(SBTi), following finalisation of its revised corporate reporting standard,
and will track and disclose progress against them.
The Group remains committed to continuing to implement the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD), as well as the
requirements of the Companies Act 2006 as amended by the Companies (Strategic
Report) (Climate-related Financial Disclosure) Regulations 2022, and we
continue to monitor the development of new climate reporting regulations.
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2025
Note 2025 2024
£'000 £'000
Revenue 1 1,838,156 2,039,131
Cost of sales (1,480,088) (1,683,921)
Gross profit 358,068 355,210
Distribution expenses (45,657) (51,294)
Administrative expenses - other (144,356) (151,943)
Restructuring costs (5,717) -
Share incentive scheme charges (3,409) (5,160)
Amortisation of energy supply contract intangible (11,228) (11,228)
Total administrative expenses (164,710) (168,331)
Impairment loss on trade receivables (33,389) (30,712)
Other income 1,579 1,377
Operating profit 115,891 106,250
Financial income 3,161 3,482
Financial expenses (13,103) (9,255)
Net financial expense (9,942) (5,773)
Profit before taxation 105,949 100,477
Taxation (29,852) (29,440)
Profit and total comprehensive income for the period 76,097 71,037
Basic earnings per share 3 96.3p 89.9p
Diluted earnings per share 3 95.1p 88.8p
Consolidated Balance Sheet
As at 31 March 2025
Assets 2025 2024
Non-current assets £'000 £'000
Property, plant and equipment 23,523 26,773
Investment property 7,895 8,049
Intangible assets 133,415 135,785
Goodwill 3,742 3,742
Other non-current assets 68,335 55,892
Total non-current assets 236,910 230,241
Current assets
Inventories 3,200 3,749
Trade and other receivables 118,377 104,066
Current tax receivable 3,049 101
Accrued income 236,798 222,036
Prepayments 32,466 9,958
Costs to obtain contracts 26,574 23,411
Cash and cash equivalents 79,020 57,829
Total current assets 499,484 421,150
Total assets 736,394 651,391
Current liabilities
Trade and other payables (48,731) (56,016)
Accrued expenses and deferred income (239,803) (181,308)
Total current liabilities (288,534) (237,324)
Non-current liabilities
Long term borrowings (191,717) (176,509)
Lease liabilities (3,168) (3,821)
Deferred tax (1,465) (1,106)
Total non-current liabilities (196,350) (181,436)
Total assets less total liabilities 251,510 232,631
Equity attributable to equity holders of the parent
Share capital 4,042 4,007
Share premium 161,491 151,553
Capital redemption reserve 107 107
Treasury shares (15,688) (15,688)
JSOP reserve (1,150) (1,150)
Retained earnings 102,708 93,802
Total equity 251,510 232,631
Consolidated Cash Flow Statement
For the year ended 31 March 2025
2025 2024
Operating activities £'000 £'000
Profit before taxation 105,949 100,477
Adjustments for:
Net financial expense 9,942 5,773
Depreciation of property, plant and equipment 3,938 3,561
Profit on disposal of fixed assets - (129)
Amortisation of intangible assets and impairment 19,140 18,280
Amortisation of debt arrangement fees 792 389
Decrease in inventories 549 1,949
Increase in trade and other receivables (including Costs to obtain contracts) (55,111) (4,239)
Increase/(decrease) in trade and other payables 51,390 (237,460)
Share incentive scheme charges 3,409 5,160
Corporation tax paid (31,250) (26,248)
Net cash flow from operating activities 108,748 (132,487)
Investing activities
Purchase of property, plant and equipment (393) (882)
Purchase of intangible assets (16,770) (11,614)
Prepayment of purchase of customer contracts (11,971) -
Disposal of property, plant and equipment - 129
Disposal of associated companies - 681
Interest received 3,056 3,535
Cash flow from investing activities (26,078) (8,151)
Financing activities
Dividends paid (66,437) (64,982)
Interest paid (14,400) (7,195)
Interest paid on lease liabilities (85) (26)
Drawdown of long term borrowing facilities 55,000 183,550
Repayment of long term borrowing facilities (40,000) (95,000)
Fees associated with borrowing facilities (584) (2,151)
Repayment of lease liabilities (794) (252)
Issue of new ordinary shares 5,821 905
Purchase of own shares - (10,186)
Cash flow from financing activities (61,479) 4,663
Increase/(decrease) in cash and cash equivalents 21,191 (135,975)
Net cash and cash equivalents at the beginning of the year 57,829 193,804
Net cash and cash equivalents at the year end 79,020 57,829
Consolidated Statement of Changes in Equity
For the year ended 31 March 2025
Share Share premium Capital redemption reserve Retained earnings Non-controlling interest Total
capital
Treasury shares JSOP
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2023 4,003 150,652 107 (5,502) (1,150) 82,598 - 230,708
Profit and total comprehensive income - - - - - 71,037 - 71,037
Dividends - - - - - (64,982) - (64,982)
Credit arising on share options - - - - - 5,160 - 5,160
Deferred tax on share options - - - - - (11) - (11)
Issue of new ordinary shares 4 901 - - - - - 905
Purchase of treasury shares - - - (10,186) - - - (10,186)
Balance at 31 March 2024 4,007 151,553 107 (15,688) (1,150) 93,802 - 232,631
Balance at 1 April 2024 4,007 151,553 107 (15,688) (1,150) 93,802 - 232,631
- - - - - 76,097 - 76,097
Profit and total comprehensive income
Dividends - - - - - (66,437) - (66,437)
Credit arising on share options - - - - - 3,409 - 3,409
Deferred tax on share options - - - - - (11) - (11)
Issue of new ordinary shares 35 9,938 - - - (4,152) - 5,821
Balance at 31 March 2025 4,042 161,491 107 (15,688) (1,150) 102,708 - 251,510
Notes
1. Revenue
Revenue by service
2025 2024
£'000 £'000
Electricity 903,069 1,066,661
Gas 629,301 708,013
Landline and broadband 153,244 141,867
Mobile 84,230 70,874
Other 68,312 51,716
1,838,156 2,039,131
The Group operates solely in the United Kingdom, other than through UWI
Limited a subsidiary set up to write insurance business with passporting
rights into the UK. During the financial year 2024, revenues included
payments received from the Government energy support schemes of £91.1m (2025:
£Nil) in respect of electricity and £18.7m (2025: £Nil) in respect of gas.
2. Alternative performance measures
Throughout this document the Group presents various alternative performance
measures ('APMs') in addition to those reported under IFRS. The measures
presented are those adopted by the Chief Operating Decision Maker ('CODM'),
deemed to be the Chief Executive Officer, together with the main Board, and
analysts who follow the Group in assessing the performance of the business.
Adjusted pre-tax profit
Adjusted pre-tax profit and adjusted basic EPS exclude share incentive scheme
charges and the amortisation of the intangible asset arising from entering
into the energy supply arrangements with npower in December 2013; this
decision reflects the relative size, non-recurring, and non-cash nature of
these charges as appropriate. In the current year adjusted pre-tax profit
and adjusted basic EPS also exclude restructuring costs due to the relative
size and non-recurring nature of these charges. Restructuring costs mainly
comprise the costs of a Group-wide staff redundancy programme carried out
during the period.
Group 2025 2024
£'000 £'000
Statutory profit before tax 105,949 100,477
Adjusted for:
Amortisation of energy supply contract intangible assets 11,228 11,228
Share incentive scheme charges 3,409 5,160
Restructuring costs 5,717 -
Adjusted pre-tax profit 126,303 116,865
Adjusted EBITDA
Adjusted EBITDA excludes share incentive scheme charges. This decision
reflects the non-cash nature of these charges. In the current year adjusted
EBITDA also excludes restructuring costs due to the relative size and
non-recurring nature of these charges.
Group 2025 2024
£'000 £'000
Operating profit 115,891 106,250
Adjusted for:
Depreciation, amortisation and impairment 23,078 21,841
EBITDA 138,969 128,091
Restructuring costs 5,717 -
Share incentive scheme charges 3,409 5,160
Adjusted EBITDA 148,095 133,251
Net debt/Adjusted EBITDA ratio
Group 2025 2024
£'000 £'000
Long-term borrowings (191,717) (176,509)
Lease liabilities (3,168) (3,821)
Less
Cash on balance sheet 79,020 57,829
Net debt (115,865) (122,501)
Adjusted EBITDA 148,095 133,251
Net debt/adjusted EBITDA 0.8x 0.9x
3. Earnings per share
The calculation of basic and diluted earnings per share ("EPS") is based on
the following data:
2025 2024
£'000 £'000
Earnings for the purpose of basic and diluted EPS 76,097 71,037
Share incentive scheme charges (net of tax) 2,566 3,901
Restructuring costs (net of tax) 4,288 -
Amortisation of energy supply contract intangible assets 11,228 11,228
Earnings excluding share incentive scheme charges and amortisation of
intangibles for the purpose of adjusted basic and diluted EPS
94,179 86,166
Number Number
('000s) ('000s)
Weighted average number of ordinary shares for the purpose of basic EPS 79,002 79,058
Effect of dilutive potential ordinary shares (share incentive awards) 1,042 963
Weighted average number of ordinary shares for the purpose of diluted EPS 80,044 80,021
Adjusted basic EPS 1 119.2p 109.0p
Basic EPS 96.3p 89.9p
Adjusted diluted EPS1 117.7p 107.7p
Diluted EPS 95.1p 88.8p
It has been deemed appropriate to present the analysis of adjusted EPS
excluding share incentive scheme charges due to the relative size and
historical volatility of the charges. In view of the size and nature of the
charge as a non-cash item the amortisation of intangible assets arising from
the energy supply agreement with E.ON has also been adjusted. In 2025 it has
also been deemed appropriate to exclude restructuring costs given the one-off
non-recurring nature of these charges. The amortisation of the energy supply
contract intangible asset has not been adjusted for taxation as this item does
not impact the amount of corporation tax paid by the Group.
4. Dividends
2025 2024
£'000 £'000
Prior year final paid 47p (2024: 46p) per share 37,145 36,445
Interim paid 37p (2024: 36p) per share 29,292 28,537
The Directors have proposed a final dividend of 57p per ordinary share
totalling approximately £45.4 million, payable on 15 August 2025, to
shareholders on the register at the close of business on 25 July 2025. In
accordance with the Group's accounting policies the dividend has not been
included as a liability as at 31 March 2025. This dividend will be subject to
income tax at each recipient's individual marginal income tax rate.
5. Related parties
Identity of related parties
The Company has related party relationships with its subsidiaries and with its
directors and executive officers.
Transactions with key management personnel
Directors of the Company and their immediate relatives control approximately
10.9% of the voting shares of the Company. No other employees are considered
to meet the definition of key management personnel other than those disclosed
in the Directors' Remuneration Report.
Details of the total remuneration paid to the directors of the Company as key
management personnel for qualifying services are set out below:
2025 2024
£'000 £'000
Short-term employee benefits 2,715 3,804
Social security costs 361 551
Post-employment benefits 118 12
3,194 4,367
Share incentive scheme charges 797 416
3,991 4,783
During the year directors purchased goods and services on behalf of the Group
worth £16,000 (2024: £36,000). The directors were fully reimbursed for the
purchases and no amounts were owing to the directors by the Group as at 31
March 2025. During the year the directors purchased goods and services from
the Group worth approximately £83,000 (2024: £71,000) and persons closely
connected with the directors earned commissions as Partners for the Group of
approximately £11,000 (2024: £11,000).
During the year ended 31 March 2025, the Group made sales to Glow Green worth
£809,000 (2024: £874,000). Glow Green is a former subsidiary and now owned
by Charles Wigoder the Non-Executive Chairman of the Group. There is an
outstanding loan receivable owed by Glow Green to the Group of £6,450,000
(2024: £6,450,000). The loan receivable is repayable in full on 1 April
2027 and attracts interest at SONIA +2.5%. This loan receivable has been
personally guaranteed by Charles Wigoder.
Subsidiary companies
During the year ended 31 March 2025, the subsidiaries purchased goods and
services from the Company in the amount of £51,000 (2024: £51,000 purchased
by the subsidiaries from the Company).
During the year ended 31 March 2025 the Company also received distributions
from subsidiaries of £70,000,000 (2024: £94,000,000). At 31 March 2025 the
Company owed the subsidiaries £16,836,000 which is recognised within trade
payables (2024: £24,259,000 owed by the Company to the subsidiaries).
6. Basis of preparation
The financial information set out above does not constitute the Group's
statutory information for the years ended 31 March 2025 or 2024, but is
derived from those accounts. The Group's consolidated financial information
has been prepared in accordance with accounting policies consistent with those
adopted for the year ended 31 March 2024. Statutory accounts for 2024 have
been delivered to the Registrar of Companies and those for 2025 will be
delivered following the Company's annual general meeting. The auditor has
reported on these accounts, their reports were unqualified and did not contain
statements under the Companies Act 2006, s498(2) or (3).
7. Directors' responsibility statement
The directors confirm, to the best of their knowledge:
(a) the financial statements, prepared in accordance with UK-adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group and the undertakings
included in the consolidation taken as a whole; and
(b) the Chairman's Statement, Chief Executive's Review, Financial Review and
Principal Risks and Uncertainties include a fair review of the development and
performance of the business and the position of the Group and the undertakings
included in the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
The directors of Telecom Plus PLC and their functions are listed below:
Charles Wigoder - Non-Executive Chairman
Stuart Burnett - Chief Executive Officer
Nick Schoenfeld - Chief Financial Officer
Beatrice Hollond - Senior Non-Executive Director
Andrew Blowers - Non-Executive Director
Bindi Karia - Non-Executive Director
Carla Stent - Non-Executive Director
Suzi Williams - Non-Executive Director
By order of the Board
1 Adjusted basic and diluted EPS exclude share incentive scheme charges,
restructuring costs and the amortisation of the intangible asset recognised as
a result of the new energy supply arrangements entered into with npower in
December 2013.
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