(Alliance News) - Telecom Plus PLC on Tuesday reported record annual earnings, prompting a nearly 10% increase in its annual dividend.
Shares in the London-headquartered multi-utility were 5.8% higher in London on Tuesday morning at 1,428.00 pence each.
Telecom supplies gas, electricity, landline, broadband and mobile services.
For the year ended March 31, Telecom's pretax profit improved 12% to GBP48.1 million from GBP43.0 million.
Revenue grew 8.9% to GBP875.8 million from GBP804.4 million.
The company noted this was in line with its own expectations.
Telecom upped its full year dividend by 9.6% to 57 pence per share, compared to the 52p distributed the year before.
Chief Executive Andrew Lindsay said: "Our results this morning show record sales, earnings and dividends, clearly demonstrating the resilience and strength of our business model. I am extremely pleased at how well our partners and employees have adapted to the Covid-19 environment, and the limited impact which this is having on our business."
Customer numbers for the year advanced by 2.7% to 652,237 from 635,039 and service numbers increased by 6.4% to 2.0 million.
"This creditable outcome clearly demonstrates the resilience and strength of our unique business model," Lindsay added.
The boss continued: "It has been achieved in the face of an energy market that continues to be distorted by suppliers with wholly unsustainable pricing strategies, and the impact from Covid-19 which brought the consistently strong levels of customer gathering activity we had been seeing from our partners throughout the period to a near standstill as the country went into lockdown.
Looking ahead, Telecom said it holds "considerable confidence" in the future on the back of the strength of its balance sheet, and a significant fall in the Ofgem price cap expected this autumn.
The level of the price cap is expected to fall on October 1 by around GBP100, which will "significantly narrow" the gap between Telecom's standard energy prices and the "cheapest deals at the bottom of the market".
Telecom said it believes independent suppliers set their retail retail prices at whatever level is required to attract new customers on price comparison sites, despite whatever hit this might have on profitability and cashflow.
"Over 20 suppliers have left the market over the last two years, and in the absence of strong balance sheets to absorb their continuing losses, further insolvencies seem inevitable," Telecom added.
Telecom ended March 31 with GBP43.6 million in net cash and cash equivalents.
The company said its trading since April 21 has been "encouraging", with churn remaining "significantly below" the elevated levels seen during the previous quarter.
"We are also seeing a progressive improvement in partner activity and confidence as they become increasingly proficient at signing people up remotely for both our customer and partner propositions," Telecom added.
Executive Chair Charles Wigoder said: "We remain uniquely well positioned to continue to build shareholder value over both the near term and the years ahead, with a diverse portfolio of essential household services, a motivated Partner network, a unique integrated multi-utility business model, market leading levels of customer retention, and a strong balance sheet. These attributes have enabled us to build an exceptionally high-quality customer base, and provide significant confidence over our future earnings stream."
By Paul McGowan; paulmcgowan@alliancenews.com
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Telecom Plus (TEP)