Telecom Plus (LSE:TEP) reported another year of robust customer growth for the period to 31 March 2026, with total customer numbers rising 23.3% to 1.43 million. This increase was supported by the acquisition of 193,000 broadband customers from TalkTalk, alongside organic growth of 10.3%. The group now provides 3.80 million services, although service growth trailed customer gains due to heightened competition in energy and broadband markets, as well as a slower recovery in its insurance segment. As a result, adjusted pre-tax profit is expected to come in at the lower end of its £132m–£138m guidance range.
Revised capital return policy balances dividends and buybacks
The company highlighted its solid financial position, with leverage at շուրջ 1.0x net debt to adjusted EBITDA. It also introduced an updated shareholder returns framework, maintaining an 80% payout of adjusted post-tax profits but allocating this between regular dividends and either share buybacks or special dividends.
Management noted continued progress in cross-selling services to customers acquired from TalkTalk, alongside growth in its partner network, which has expanded to 77,000 members. The group remains focused on increasing services per customer, reducing churn and improving contribution margins, with a longer-term goal of reaching two million UK households.
Mixed outlook shaped by growth momentum and competitive pressures
Telecom Plus presents a mixed outlook. Strong customer growth and ongoing strategic expansion support its longer-term prospects, while competitive pressures and softer revenue trends present near-term challenges. Technical indicators also suggest a weaker share price trend.
However, valuation metrics and a relatively high dividend yield provide some support, particularly for income-focused investors, helping offset current operational and market headwinds.
More about Telecom Plus
Telecom Plus, trading as Utility Warehouse, operates a UK-based multiservice utility platform that bundles household services such as energy, broadband, mobile and insurance into a single subscription. Customers benefit from a consolidated monthly bill and competitively priced offerings, while the company leverages a nationwide network of partners for customer acquisition. Its business model is underpinned by recurring revenues and predictable cash flows.
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