Telecom Plus backs full-year guidance

(Sharecast News) - Telecom Plus backed its full-year guidance on Tuesday as it said compound double-digit customer growth continued and the cross-sell into acquired TalkTalk customers has exceeded expectations. In an update for the six months to 30 September, the company - which operates as Utility Warehouse - said total customer numbers rose by around 19%, or 223,000 to over 1.386m, including substantially all of the customers it bought from TalkTalk earlier this year.

Organic customer growth was around 5.5%, which it said demonstrates "the continued ability of the business to sustainably outcompete in a wide range of different market conditions, as a result of our unique multi-service proposition and differentiated route to market". The number of services supplied rose more than 256,000 to a total of around 3.65m.

Telecom Plus said its cross-sell trial into the first tranche of broadband customers bought from TalkTalk is continuing to perform ahead of expectations, with around 5,000 customers upgraded and cross-sold to so far.

"This gives us significant confidence in our ability to cross-sell into any further books of customers we may acquire in future, and we are excited about the future opportunities that this represents," it said.

The company said it remained confident in its previous full-year guidance for both customer growth and adjusted pre-tax profits.

Chief executive Stuart Burnett said: "We are pleased to have maintained our compound double digit customer growth rate for a further six months, simply by helping households to save time and money on their essential household bills, and demonstrating the ability of our unique multiservice model to provide market-leading savings in a wide range of market conditions.

"We have exceeded our initial cross-sell expectations into the first tranche of broadband customers we acquired from TalkTalk, and are excited by the future opportunities this creates.

"With the UK's most competitive mobile proposition, alongside our market-leading offering in energy, broadband and insurance, our Partners have even more ways to help their friends and families to save, whilst building a valuable long-term additional income for themselves."

Telecom Plus also said on Tuesday that while its H1/H2 profitability has historically been split roughly 35/65 in favour of the second half, this is expected to change to around 25/75 for both the current and future financial reporting periods.

This is due to the way that certain industry costs, such as metering, are now being allocated to it more equally across the financial year - as is typical in the energy industry - following the previously announced evolution of its wholesale energy supply agreement.

This is purely a phasing change and has no impact on expected full-year profits.