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It actually says accrued expenses and DEFERRED INCOME. It generally includes goods and services received not yet invoiced and payments in advance (customers' credit balances). I would suspect that payments in advance have probably increased because of the increase in customer numbers/services during the year plus larger than normal credit balances at the end of March due to the increases in electricity and gas prices (I can't speak for everybody else but I for one have allowed my credit balance to increase more than normal because I'm expecting domestic gas and electricity prices to rise later in the year and don't want my monthly outgoings to yo-yo).
They are going to launch car insurance in Mar 2024
Nice dividend, good profit yield Vs mcap.
Looking like a recovery back to 2000p to me
Let us wait and see the June 27th figures-methinks a bit of shorting taking place here?
Given the number of customers TEP picked up from the demise of other utility companies over the last couple of years and the opportunities to cross-sell other, higher-margin services I think TEP is following its long-term trend of rising lows. It fell c40% over approximately 18 months from its Nov 2013 peak before starting its long road to recovery and has thus far fallen c41% from its Nov 2023 peak over a period of approximately seven months.
As it currently stands, TEP might indeed fall further. 1200p is, perhaps, a possibility but I think 1000p is probably is unlikely; it will really depend on whether TEP starts to lose customers if, and when, the utility market regularises. Historically TEP has seen fairly low customer churn but a lot of its newer customers, unlike its older ex-British Gas customers, are probably more likely to switch to find the best deals (if TEP doesn't remain competitive). Against which, you've got to factor in that they've likely picked up a lot more active distributors in the last 12 months, as people start looking for opportunities to make some additional income, and that may give rise to new, additional customers to help counter other outflows.
As it stands, I think the yield is still too low (suggesting that the sp has further to drop) and there have to be question marks over whether TEP can continue to sustain the current projected 80p dividend, if starts to see (large) net customer outflows. Personally I think TEP would have been better advised to propose a modest increase in its previous ordinary dividend and proposed an additional special dividend top-up until the utility market had settled. You don't get slaughtered for cutting or stopping a special dividend and if TEP now pays part of its target 80p dividend as a special dividend then that could have a further adverse impact on the sp because there's now an expectation of a recurring 80p ordinary dividend. The next couple of half yearly results are going to be interesting.
I've bought & sold TEP on 3 occasions & done well in doing so. I sold out last time & then was shocked to see the price racing past 2000p.
I've posted before & stated that when the SP was dropping below 1200p towards 1000p that TEP was a sensible buy.
It may head that way again (Just down to sentiment) & if it does.....
expect me to jump in again.
I just dont see large growth needed like say Octopus energy, so TEP can be a bigger player. All the growth was years ago and now they are a niche market
Great summary about TEP growth, I often wonder if in the future they will be taken over and move to a different model that does not include distributors
According to a senior exec who worked in TEP-it is not the energy which makes most money but the other services on offer. It has always been the case that increasing the customer base is a priority-hence the route to market model used which is unique to this sector. It would be interesting to know the share price valuation if this company was sold.
I believe that I'm right in saying that TEP's profit per customer falls as gas and electricity prices fall and/or usage declines (because its margin on the gas and electricity supplied by nPower remains constant) and, as such, the TEP share price is probably suffering from a quadruple whammy: (1) It's been a relatively mild winter so TEP hasn't been able to take as much advantage of higher pricing as it might, (2) It's now entered the lower usage cycle of the summer/autumn months, (3) Global electricty and gas prices have been falling (but may start to increase again as we enter the autumn/winter period), and (4) The recent reduction in the Ofgem price cap (and the expected further, but smaller, reduction to come in September).
TEP's business model is fairly simple and is underwritten by its supply contract with nPower but it does mean that its profits per customer tend to fluctuate with market prices and that those "lost" profits can only be replaced by adding additional customers and services (it's has to run faster just to stand still). Assuming that TEP's ability to add customers and services remains fairly constant (growing at a reasonably predictable rate albeit that it can, occassionally, have exceptionally good periods and vice versa) and the fairly benign supplier environment (no new collapses look imminent), it's likely that TEP's profits over forthcoming reporting periods will fall short of what brokers might have been predicting only 12 months ago and it's ability to again increase its dividend beyond the end of FY23 looks less likely. You also have perhaps to question whether TEP can actually maintain its FY24 dividend at 80p; historically it hasn't tended, if at all, to backtrack its dividend, so I'd hazard that it will maintain its dividend, even if it isn't full covered for the foreseeable future - it wouldn't be the first time. TEP has always been thus. It expands, it consolidates and then it goes again but it may take another 8-10 years for its share price to re-scale the heights seen last November (it's previous share price peak was in November 2013 and it took until June 2022 to surpass that and it's now trading below that November 2013 peak once again).
That may be pessimistic but TEP is currently neither a growth nor an income stock. It either needs to add new additional services to accelerate profit growth or its share price needs to fall further to make it more attractive to income chasers. I'd hazard that its forward yield might need to rise to, at least, 6% to make it attractive to income chasers which, at 80p, would mean a share price of c1,350p (or below). The fact that its dividend might not be covered might necessitate an even higher yield premium in the medium term.
I'm not a current holder but have held a couple of times in the past and done quite well (albeit that I sold out too soon).
GLA
Maybe becuase the yield is quite low and the PE is quite high. I dunno. Less energy used in summer.
I'll never wrap my had around this game. What was the cause of the drop in SP today? It all looks very rosy to me.
The obvious market reaction to a good update is of course for the sp to fall.
Jolly well hope so!
Nice rise.
Last 2 years, TU has been around 28th April.
Peeps positioning for the TU, which is likely to be very good?
Hopefully levelling out. Good divi twice a year.
I bought some today hoping that there'll be a recovery back to £20+ but mainly to hold as a long term investment.
Looking at Robbie Burns' site he bought at £22+ last year so maybe that's something to provide some hope!
I will wait till 1700 -1685 area then re-asses weather to buy it or wait further as those are key level for reversal if it happens
Agree, i can't imagine anything other than a nice rise once figures are shown and a very healthy dividend to be had.
They have fallen about 22% the Chairman offloaded a chunk and they have gone down ever since. Meanwhile the market has been rising. Always impossible to know when the fall will stop but it has fallen enough for me to dip in an buy a few at 1865p. The year ending in March will see good progress in customer numbers, profits and the dividend. I just have to be patient ! Perhaps buy a few more if it falls another 10%
What? They'd be 16% down by now, that's crazy.
I've a feeling we might bounce here and head back down to 1700.
Quite worrying ongoing decline. Quite a lot of buys today though if the stats are to be believed.
Price of gas going down?
Not sure what is happening with the Share Price. After the good news regarding the continuing increase in customers and the better dividend payout, I would have expected TEP to continue on an upward trend. Is the volatility down the the offloading of the 84 millions worth of stock or do the markets see something that I cannot? If the drop continues I will be looking to add.
So who has bought 84 million quids worth of stock?