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

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 ;))

MRW I made a quick profit as I did with HOC. In fact a fairly big profit with HOC.

Cyners better not to Buy a company like FOXT for a short to med term trade and then finds yourself holding for the long term because you couldnt stomach taking a short term loss.

In fact its YOU that spreads the gospel of 'taking a profit does'nt hurt anyone'. (: -)


I would tend to agree but under different circumstances when using an entry trading system, rather than a pin like yourself.

Now help yourself to a gift................................

Now hey come on lads, fairs fair he is Mr. 99% isn't he? All part of the Billy Liar Tribute Act, at this rate in line for an Oscar.

StockMarketWire.com
Telecom Plus anticipates reporting FY adjusted pretax profits of £52m-£53m after taking account of the current year c.£6m impact of higher than anticipated leakage and theft in the gas system.

Excluding this impact, the outcome will be below the level we were expecting to achieve, due to the cumulative effect of retail energy price reductions during the fourth quarter and lower energy usage during the year (mainly caused by un-seasonally warm weather).

The Board re-iterates its intention to recommend a final dividend for the current year of 21p per share, making a total of 40p for the year, and representing an increase of 14% over last year.

Telecom Plus' board does not believe the combination of unfavourable circumstances which has prevailed throughout the last financial year will continue indefinitely, and expects the industry-wide gap between the standard variable tariffs currently paid by most customers and the cheaper introductory short-term fixed tariffs available to new customers will start to narrow over the coming year.

"This should enable us to deliver further strong organic growth in the number of customers using our services of between 40,000 and 60,000 over the next 12 months.

"Notwithstanding this anticipated improvement in our competitive position, the outlook for the new financial year is subject to more uncertainty than usual, with the overlay of political and regulatory dimensions on top of any possible impact from movements in the wholesale energy markets or fluctuations in consumer demand caused by un-seasonally warm (or cold) weather.

"The forthcoming general election and subsequent announcement by the CMA of its preliminary findings expected shortly thereafter will help to provide greater visibility, although as previously indicated, the unique nature of our long-term energy supply arrangements with npower should insulate us from the worst effects of any possible government imposed price freeze or regulatory intervention aimed at reducing tariffs.

"The Board expects the growth trend in customer numbers already observed will result in the Company reporting an increase in adjusted pre-tax profits for the year to March 2016 to between £54 million and £58 million, notwithstanding anticipated further energy price reductions following the general election and the steps recently taken to improve the Company's competitive position.

"In the absence of unforeseen circumstances, this should enable us to increase the dividend by at least 15%, to not less than 46p per share."

Highlights for the year to March 31, 2015 are:
· Customer numbers for the year ahead by almost 11% to 587,223

· Service numbers up by 207,416 to over 2.1m

· Expected final dividend of 21p making a total of 40p (14% up on last year)

· Record attendance at recent Partner sales conference

· Launch of new two-year fixed price energy tariff

· Balance sheet write down of unbilled energy debtor with no impact on cash

· Strong profit growth expected for 2015 but significantly below market expectations

· Slower profit growth expected for 2016 with dividend increasing by 15% to 46p

Top faller today.

Was a darling of the stockmarket.......one I missed out on....now the graph shows a dive......could never understand what drived this....so much competition in the energy sector.....why did this shine so brightly ?.....anyway....divi or not .....have to wait to see how this pans out....