Telecom Plus sees return to faster organic growth as energy prices rise
Interim revenues fell slightly at Telecom Plus, but profits were up as the utility company remains confident energy prices will rise to offset the decline.
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For the six months ended 30 September, revenue slipped 0.9% to £291.3m, compared to the same period last year, due to warmer weather and lower gas prices.
While adjusted profit before tax was up 11.4% to £25.1m and statutory pre-tax profit rose 23% to £18.7m.
Adjusted full-year pre-tax profits are expected to be towards the upper-end of the company’s indicated £55m to £59m range and further organic growth in lin line with expectations.
Adjusted earnings per share surged 10.3% to 25.6p and statutory earnings per share increased 24% to 17.8p.
The FTSE 250 company said the gap in the market between introductory fixed-term energy deals and standard tariffs is starting to narrow and prices have started to rise. It anticipates that this will lead to a recovery in the “competitiveness of our multi-utility proposition, and to a return to faster organic growth”.
During the period the total services supplied was up by 52,037 to 2,233,741 and customer numbers increased by 5,450 to 604,063.
Chief executive Andrew Lindsay said the company was performing in line with expectations: "We believe our route to market continues to give us a significant long term competitive advantage, enabling us to target high quality customers who would not otherwise be engaged in the market, and to effectively communicate the savings, simplicity and service provided by our unique integrated multi-utility proposition. This is in stark contrast to other independent energy suppliers who face an increasingly challenging environment.
"We welcome the recent significant narrowing of the gap between the introductory energy deals offered to customers on price comparison sites, and the price paid by the vast majority of customers on standard variable tariffs; this will result in a fairer energy market for consumers, and should lead to greater confidence amongst our partners and, in due course, a return towards the higher levels of organic growth we have previously achieved."
The company declared an interim dividend of 23p per share, a 4.5% increase from last year.
Shares in Telecom Plus were up 2.74% to 1,237p at 0943 GMT.