Telecom Plus Regulatory News (TEP)

7 Feb 2008 07:01

Telecom Plus PLC07 February 2008 Telecom plus PLC (the "Company") Interim Management Statement Quarter Ended 31 December 2007 Telecom plus PLC (trading as the Utility Warehouse), which supplies a wide rangeof utility services (gas, electricity, fixed line telephony, mobile telephonyand broadband internet) to both residential and business customers, today issuesits Interim Management Statement for the quarter to 31 December 2007. Highlights • Performance ahead of current market expectations • Number of services up by over 16,000 • Cash balance at end of quarter £37.6 million • Full year pre-tax profits expected to exceed £16.5 million • Projected total dividend of 14p for the full year (2007: 8p) Operating Review Trading during the quarter shows a continuation of the positive trends referredto in the interim results for the six months ended 30 September 2007 asreported on 29 November 2007. The Company's Distributors remain enthusiastic about the new opportunities forgrowing their businesses resulting from the changes announced at the Company'ssales conference in October. This is being reflected in more new Distributors joining the business, in addition to a resumption of growth in the size of thecustomer base and a significant increase in the number of services supplied tothem. Customer numbers reversed the downward trend of the previous 18 months with anincrease to 212,712 during the quarter. This total includes further steadygrowth experienced in the Business Club, which now has 8,427 customers. The number of services provided rose by over 16,000 to 568,742 during thequarter, substantially in excess of the 10,450 growth reported for the firsthalf of the current year, reflecting an increase to 3.07 (September 2007: 3.03)in the average number of services taken by each member of the residential club. Cash Flow Cash flow during the quarter remained strong with the cash balance increasing to£37.6 million by the end of the period. This was notwithstanding the sharebuy-back programme referred to below, but included our receiving repayment of a£2.0 million long-term loan we had made to Oxford Power Holdings in 2002. The Company purchased 100,000 of its shares at a cost of £0.2 million during thequarter, with a further 866,000 shares being purchased during January 2008 at acost of £1.6 million. This takes the total number of shares purchased since approval was received to commence the buy-pack program last summer to 3,084,000at an average cost of 183.2p per share. Outlook Following the recent price increases announced by other major suppliers ofdomestic energy, we increased our own energy prices from 1 February 2008 by anaverage of 7% for electricity and 12% for gas. These price rises are lower thanthe average price rises announced by the "Big 6" suppliers who increased theirprices during January, and in addition, our customers will benefit from our newprices becoming effective from a later date. This reflects our commitment to providing our customers with consistently good value on all the services wesupply. We anticipate an improvement in our growth rate during the remainder of thecurrent year driven by the many new Distributors joining the business; greateractivity by existing Distributors supported by the new Head Office sales team;the recent trend towards lower churn; and an increasing tendency amongstconsumers to seek a better value supplier in what is becoming an increasinglydifficult economic climate. The Company's future results will reflect both the increase in the number ofservices supplied as well as higher retail energy prices. Pre-tax profits forthe current year ending 31 March 2008 are therefore expected to exceed £16.5 million, and on that basis the board would intend to recommend a final dividendof 10p per share (making a total dividend of 14p for the full year). Preliminary Results Date Preliminary results for the year ended 31 March 2008 are expected to be announced on Thursday 22 May 2008. Charles Wigoder, Chief Executive said: "Our strong performance in the current year has continued during the thirdquarter. We are benefiting from the initiatives taken over the last year tostimulate growth in the number of services provided to our increasing customer bases. "We now expect our full year results and dividends to exceed current marketexpectations." For more information please contact: Telecom plus PLC Charles Wigoder, Chief Executive 020 8955 5000Richard Hateley, Finance Director Smithfield Tania Wild / Reg Hoare 020 7360 4900 Information in this announcement is based upon unaudited management accounts.This announcement includes certain forward looking statements which are based oncurrent expectations and are subject to uncertainties and risks that could causeactual results to differ materially from any expected future events or resultsreferred to in these forward looking statements. Unless otherwise required byapplicable law, regulation or accounting standard, we do not undertake anyobligation to update or revise any forward looking statements, whether as aresult of new information, future developments or otherwise. This information is provided by RNS The company news service from the London Stock Exchange