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Telecom Plus profits edge up amid tough energy market
Telecom Plus reported a slight increase in annual profit as the utility company grappled with tough trading conditions in the energy market.
Adjusted pre-tax profit for the year to the end of March rose 1.8% to £53.4m as revenue rose 7.1% to £792.9m.
The company increased its annual dividend by 4.2% to 50p a share. Statutory pre-tax profit rose 0.3% to £41m.
Trading as Utility Warehouse, Telecom Plus sells home energy contracts as well as insurance, mobile phone, broadband and other services. It gives customers discounts the more services they buy and sends them a single bill. It relies mainly on its sales force of "partners" and word of mouth and to market its services.
The FTSE 250 company said it had achieved modest growth as the market for energy contracts was divided between big suppliers defending their positions and small competitors pricing aggressively. Telecom Plus said it could not see how these smaller operators could build viable businesses as customers move on to other cheap deals.
Andrew Lindsay, Telecom Plus's chief executive, said: "I am pleased to report a further year of growth in all areas of the business, despite continued challenging conditions in the energy retail marketplace. Over 20% of our members now take all five of our core services, and we have continued to expand our proposition during the year with the addition of home insurance."
Telecom Plus said it was comfortable with its guidance for adjusted pre-tax profit of £55m-£60m in the current year - a result that would allow it to increase the annual dividend to at least 52p a share.
The company's shares fell 4% to £10.22 at 09:14 BST.
The energy regulator Ofgem announced an investigation on 1 June into the way Utility Warehouse manages customers who are in debt. The investigation will look at whether the company does enough to contact and support customers in or at risk of debt.