Telecom Plus (TEP) delivered another impressive performance last year, providing customers with an integrated service that covers gas, electricity, broadband and telephones. In fact, the number of services provided rose by a record 220,000 to 1.6m, while customer numbers were up from 415,000 to over 461,000, of which over 401,000 benefited from being members of the group's club scheme.
Operating under the Utility Warehouse brand, Telecom Plus offers customers the convenience of a single bill. There is no big advertising spend, and the company operates by word of mouth and through a network of 39,000 dedicated distributors. And the business model seems to work: churn rates have been falling consistently to stand at just 1.2 per cent of the customer base; and over 55 per cent of new customers applied for at least 4 core services in the 12-month trading period.
Average revenue per customer rose over 14 per cent to £1,363, thanks in part to a steady increase in gas and electricity prices. For the coming year, there are plans in place to streamline the signing up process for new customers, with a target of increasing customer numbers by 20 per cent.
Analysts at finnCap have nudged up their current year adjusted pre-tax profits to £40.3m, giving EPS of 44.6p (2013: £34.6m and 38.1p), rising to £46.5m and 51.4p, respectively the year after.
| TELECOM PLUS (TEP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,248p | MARKET VALUE: | £881m | |
| TOUCH: | 1,246-1,254p | 12-MONTH HIGH: | 1,295p | LOW: 686p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 100p | NET CASH: | £0.8m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 278 | 22.5 | 24.2 | 17.5 |
| 2010 | 369 | 18.2 | 19.7 | 22.0 |
| 2011 | 419 | 27.5 | 30.1 | 22.0 |
| 2012 | 471 | 30.7 | 33.8 | 27.0 |
| 2013 | 602 | 34.6 | 38.7 | 31.0 |
| % change | +28 | +13 | +14 | +15 |
Ex-div: 17 Jul Payment: 2 Aug | ||||
