Telecom Plus (TEP) hiked its full-year dividend by almost a tenth, after sales and earnings reaching new record highs in 2020. The group posted an improved gross margin, at 19.1 per cent, which it attributed to changes to agreements with some of its key suppliers.
The group has been trading resiliently, with customer numbers for the year up by 2.7 per cent to 652,237 and service numbers growing by 6.4 per cent, surpassing the 2m mark. The quality of new customers is also steadily improving, with 60.4 per cent switching all their core services to Utilities Warehouse, the group's trading name, in the final quarter of its 2020 financial year.
New partner recruitment also grew by around a quarter year on year, and the group noted that more than 1,300 joined over the course of last month, which is almost 50 per cent higher than the same period last year.
Net debt climbed 61 per cent to £59.4m (including lease liabilities of £9m), which the company said was in part due to capital expenditure on its digital transformation programme, the growth of its meter operator and changes to the corporation tax quarterly instalment regime.
Peel Hunt forecasts adjusted pre-tax profits of £60m and EPS of 62.1p in 2021, compared with £60.8m and 61.8p in 2020.
| TELECOM PLUS (TEP) | ||||
| ORD PRICE: | 1,426p | MARKET VALUE: | £ 1.12bn | |
| TOUCH: | 1,374-1,458p | 12-MONTH HIGH: | 1,582p | LOW: 907p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 282p* | NET DEBT: | 23%** | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 745 | 35 | 32.8 | 46 |
| 2017 | 740 | 41 | 38.0 | 48 |
| 2018 | 793 | 41 | 38.8 | 50 |
| 2019 | 804 | 43 | 42.5 | 52 |
| 2020 | 876 | 48 | 45.9 | 57 |
| % change | +9 | +12 | +8 | +10 |
| Ex-div: | 09 Jul | |||
| Payment: | 31 Jul | |||
| *Includes intangible assets of £173m, or 220p a share **Excludes lease liabilities of £9m | ||||
