Falling energy prices, mild weather and aggressive introductory offers from market newcomers dampened trading at Telecom Plus (TEP). But the cut-price utilities and telecoms supplier still posted record sales and profits, prompting investors to bid its shares up 3 per cent on results day.
The group, which operates its business as a discount club under the trading name Utility Warehouse, grew its member base by 11 per cent in the year to just short of 582,000. Coupled with an improved energy supply agreement with Npower, that boosted operating profit by 23 per cent to £38m. The key to its success has been bundling services, which has driven up average revenue per member and discouraged customers from switching suppliers. Over 29 per cent of new members signed up for combined energy, fixed-line, mobile and broadband services in April and May, up from 21.1 per cent in the first quarter of the reported period.