Telecom Plus
Shares: 184p +28p
Questor says Buy

Tory party backer Charles Wigoder must have felt truly blue earlier this year when shares in his residential telecoms and energy supplier fell below 100p for the first time in almost four years. In early 2004, Telecom Plus - in which Wigoder has a 20pc stake - had peaked at 400p. But a failure to hedge its gas supply contracts caused the stock to tumble as the gas price soared.

Then came the explosion of competition in the broadband sector led by that "free" offer from Carphone Warehouse. It is easy to see why investors got spooked. Since this summer, however, Telecom Plus has staged a modest recovery. Yesterday it got a fresh fillip as Wigoder promised record profits in the current year.

NPower has taken over Telecom Plus' energy-buying operations, along with an option to buy management's 29pc stake in 2009 at a price based on a set formula.

Based on analysts' earnings expectations NPower's strike price would be somewhere near 300p, which would represent an impressive return over three years.

The arrangement makes Telecom Plus pretty much bid proof for now but shows that NPower has confidence in the low-cost business model pioneered by Wigoder, who built Peoples Phone into a sizeable mobile phone service before cashing in millions by selling it to Vodafone in 1996.

Telecom Plus owns no network but buys in bulk and seeks to undercut larger rivals. Not only does it not have to build or repair switches and pipes, but it sells through agents and sub-agents so it has minute marketing costs - customers are given incentives to win new business from friends and family.

On 15 times forecast earnings, falling below 12 for 2008 and yielding 2.6pc, there is room for upside.

Whitbread

Telecom Plus's interim profits to hit new record
9:02 am by Philip Whiterow Telecom Plus added that the number of customers taking at least four services has exceeded 55% in each of the last six months.

Multi-utility provider Telecom Plus (LON:TEP) expects half-year profits to be well ahead of a year ago after another healthy rise in new customers.

The group, which owns Utility Warehouse, had 438,000 customers at end September, an 11% rise on six months earlier, while there was a 16% increase in the number of services supplied at 1.49 mln.

Telecom Plus added that the number of customers taking at least four services has exceeded 55% in each of the last six months, with the average for each residential club customer now at a record high of 3.72.

The company is now focusing its efforts on customers who take a combination of gas, electricity and phone and mobile. This is reducing churn levels and also boosting average revenue per user it said.

The company added it was comfortable with consensus full year market expectations for both earnings and dividends despite additional short-term costs arising from the focus on higher quality customers.

"We anticipate that our half yearly report will show pre-tax profits and earnings per share that are firmly ahead of the figures for the comparable period last year. Shareholders can expect a significant increase in our interim dividend payment, as we move towards a more even split between our interim and final payment each year in future," the firm said.

Andrew Lindsay, chief executive, added: "We are confident that we can build upon this strong performance during the second half of the year, and meantime look forward to announcing record half yearly results in November."

Shares rose 14p to 886p.

For a utility supplier Telecom Plus (TEP) is growing at a blistering pace. Half year to end Sept figures show revenue up 30% and earnings nearly 10% higher. Limited capital needs mean the firm can afford a dividend payout ratio of roughly 80% for the full year. The company is forcast to distribute 31p this year, equivalent to a 3.5% yield. This £627 million cap has tapped barley 1% of an estimated £50 billion market
so there is enormous scope for future growth.

Interim Management Statement


Highlights



· Confident of reporting full year profits in line with market expectations

· Continued strong organic growth

· Improving customer quality

· Total Group services up by 55,488 during the quarter to 1,544,233

· Strong underlying cash generation

· Intention to increase total dividend by 15% to 31p for the current financial year (2012: 27p)



http://www.moneyam.com/action/news/showArticle?id=4536014

Telecom Plus to boost divi by 15 per cent
By Natasha Roberts

Mon 11 Feb 2013


LONDON (SHARECAST) - Telecom Plus, the FTSE 250 utilities services provider, said Monday that it was confident that it will report full year profits in line with market expectations, following a period of continued strong organic growth.

It said underlying cash generation has continued to be strong, while total group services were up by 55,488 during the quarter ended December 31st to 1.54m.

As such, it plans to increase its total dividend by 15% to 31p for the current financial year (2012: 27p).

Chief Executive Andrew Lindsay said: "The business has delivered another strong performance over the period and I am particularly pleased with the sustained improvement in customer quality and the strong growth we have achieved in the number of services we supply."

"The high levels of distributor activity we have seen since the beginning of January, and the increased interest being shown by new distributors in taking advantage of this exciting business opportunity, bode extremely positively for the year ahead."

"Our confidence that we will announce record results when we report our full year figures in May is reflected in our commitment to a substantial increase in the total dividend for the year."

The company said that since the beginning of the year, distribution channel activity bounced back strongly after the traditional Christmas lull, with a significant increase in the number of new distributors joining the business over the last few weeks. It also said that it has made "good progress" developing its online presence, and has begun to see encouraging results from marketing additional services to existing members of its residential club.

Customer numbers at the club increased by 41,156 and service numbers have increased by 210,237 over the last 12 months, representing year-on-year growth rates of 13% and 18% respectively. The number of services taken by these members continues to climb, and has now reached an average of 3.76 (2012: 3.58).

"This reflects the continuing high proportion of new members taking at least four major services, which remained at over 55% for the quarter. These high quality members now account for 38.1% of the residential Club, up from 33.8% at the end of our last financial year," Telecom explained.

Opus Energy Group, in which Telecom has a 20% equity investment, is performing ahead of budget and is on track to deliver record turnover and profits for the current financial year

Climbing very nice in 2013.

On Wednesday, Telecom Plus PLC (TEP:LSE) closed at 996.00, 2.13% below its 52-week high of 1,017.7, set on Feb 22, 2013.


Consensus recommendation
As of Feb 23, 2013, the consensus forecast amongst 2 polled investment analysts covering Telecom plus PLC advises that the company will outperform the market. This has been the consensus forecast since the sentiment of investment analysts deteriorated on Jul 19, 2012. The previous consensus forecast advised investors to purchase equity in Telecom plus PLC.
.


http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=TEP:LSE

The Naked trader 27 Feb -


Telecom Plus (LON:TEP) tries hard to get above the tricky tenner. All looks on track and I would expect a nice steady rise this year. It seems to have cracked the 900 area for now - cracking a tenner is going to take a few attempts, I would expect 1200 sometime later this year. Website profits of well over £100,000 and personal profits of more £300,000. I just continue a long-term holder.

DC - I don't doubt Robbie Burns for one second, don't forget though that he has a personal interest in this share. Remember his mantra 'never fall in love with a share'. Unless of course you are a long term introducer :O)

Sold my holding, been in since Nov 2011 at 760p :-))

Nice one DC.

Thanks Chris, starting to take some profit now.

Ex-div wed 18th July, 18p.

what happened

LISTEN: Andrew Lindsay, CEO of @telecomplusplc, discusses the recent acquisition and half year results.

Click here to listen

Telecoms and utility group Telecom Plus reported today that revenue was up 17% to £245.8m in the half-year to end-September, reflecting continued strong organic growth. Profit before tax rose 10.1% to £13.7m.
I AM LOVING IT

Sold half.

Highly rated stock by IC.
Will post full article when I get a moment.

HC: Have been following this for some time and watching it drop ... perhaps
your article throws some light on this!

Apologies for slight correction to my earlier post. Article is from Shares Mag (Steven Frazer).
"Top quality execution and great visibility, multi-utility Telecom Plus have both in abundance. The UK utility market is estimated at £50 bn per year, putting the company's anticipated near £800m of revenue, for the year to March 2015, into perspective (1.6% market share). Beating the big power providers on service is key, but so is the unique Telecom Plus model (trading as Utility Warehouse), which typically starts supplying gas/electricity, then progresses to cross-selling home phone, broadband, even mobile calls, texts & data. Selling more than 1.9m services across 495,234 (as at end of march) residential customers (530,639 including business users), earnings quality is improving with nearly a quarter of new customers taking Gold membership (five services). That's helped ARPU (av revenue per cust) to more than double since 2006, to £1,302 in 2014, a modest 4.5% decline on 2013 but only because of lower fuel consumption after a very mild winter. Earnings estimate for March 2015 of 67p per share (according to FinnCap estimates) imply a premium PE multiple of 19.6, but few other stocks can match TEP for growth potential, defensive attributes and a rough 80% EPS to dividends payout ratio that implies more than 50p per share of income this year."

TEP racing after interim statement.