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

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.

TEP Telecolm Plus see chart below is this the bottom?, have you seen the Buy Volume today. Big Director buys monday............Speculative Buy ???

Telecom plus PLC

FORECASTS

2015 2016
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
Peel Hunt LLP
26-01-15 BUY 62.97 63.71 40.00 73.49 74.14 48.00
FinnCap
20-01-15 BUY 62.90 64.40 40.00 74.70 76.60 47.00
Westhouse Securities
18-12-14 BUY

2015 2016
Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
Consensus 62.94 64.05 40.00 74.09 75.37 47.50
1 Month Change 0.00 0.00 0.00 0.00 0.00 -0.00
3 Month Change -0.94 -1.15 0.00 -0.10 0.06 1.43

GROWTH
2014 (A) 2015 (E) 2016 (E)
Norm. EPS 3.87% 61.44% 17.66%
DPS 13.33% 17.65% 18.75%

INVESTMENT RATIOS
2014 (A) 2015 (E) 2016 (E)
EBITDA £42.46m £62.60m £73.06m
EBIT £37.37m £61.90m £72.70m
Dividend Yield 3.46% 4.07% 4.84%
Dividend Cover 1.17x 1.60x 1.59x
PER 24.75x 15.33x 13.03x
PEG 6.40f 0.25f 0.74f
Net Asset Value PS -23.19p p p



Telecom plus broker views

Date Broker Recommendation Price Old target price New target price Notes
21 Nov finnCap Buy 1,025.00 2,000.00 1,880.00 Reiterates
19 Nov finnCap Buy 1,025.00 2,000.00 2,000.00 Reiterates
10 Oct finnCap Buy 1,025.00 2,000.00 2,000.00 Reiterates
16 Jul Beaufort Securities Buy 1,025.00 - - Reiterates
15 Jul finnCap Buy 1,025.00 - - Reiterates

Telecom plus director deals

Date Director Type Volume / price Trade value
26 Jan 2015 Melvin Lawson Buy 25,000 @ 985.00p £246,250.00
26 Jan 2015 Julian Schild Buy 25,000 @ 985.00p £246,250.00
26 Jan 2015 Charles Wigoder Buy 25,000 @ 985.00p £246,250.00

Timed my entry well here, 2 up days so far.

Better not say too much..........might go tits up.

you mean like mrw? :-)

or HOC ;))