Telecom Plus interim profits sink, but outlook confident

(Sharecast News) - Telecom Plus reported a near-30% plunge in adjusted earnings over the first half despite solid revenue growth, due to the re-phasing of energy costs across the financial year, though a strong increase in customer numbers has supported confidence in hitting full-year forecasts.

Adjusted pre-tax profit slumped 29.5% to £32.5m over the six months to 30 September, from £46.1m the year before, as a result of the previously announced change in phasing of certain energy industry costs (such as metering) more evenly across the financial year.

The company, which trades as Utility Warehouse to provide subscription-style essential household services in the UK, posted revenues of £744.5m.up 6.7% year-on-year.

Results were helped by a 19% increase in customer numbers to 1.39m, with annualised organic customer growth of 11% along with the addition of broadband customers acquired from TalkTalk.

The interim dividend was raised to 38p, up 2.7% over last year.

"We are pleased to have delivered double digit compound customer growth for a fourth consecutive year, 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," said chief executive Stuart Burnett.

"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."

Looking ahead, the firm expected customer growth to be 25% for the full year ending 31 March 2026, and adjusted pre-tax profits of £132m-£138m. This is up from £126.3m last year but well below the level of customer growth due to the "one-off headwinds from Ofgem's review of operating cost allowances within the energy price cap and the increases in National Insurance and National Living Wage announced in the budget last year", the company explained.