Telecom Plus (LSE:TEP) has reported an encouraging start to its new five-year growth strategy, with customer additions accelerating during the opening four months of FY27 and the company maintaining its full-year profit guidance.
Annualised growth in multiservice customers is running slightly ahead of the group’s 10% target and at more than 2.5 times the pace recorded during the comparable period last year.
Activity across the company’s Partner distribution network has also reached record levels. The number of active Partners has increased to approximately 4,900 per month, while the overall Partner network now exceeds 85,000 people. Telecom Plus is also expecting record attendance at its forthcoming sales conference, providing further evidence of increased engagement across its distribution channel.
Cross-selling existing customers additional services represents another important element of the growth strategy. Around 17,000 additional core services have already been sold against the company’s full-year target of 50,000.
Telecom Plus is simultaneously progressing the re-platforming of its insurance operations, which is expected to provide the infrastructure required for the planned introduction of motor insurance during the second half of the financial year.
Investment in digitalisation is continuing alongside new marketing initiatives designed to increase brand awareness and customer acquisition. These include new advertising campaigns and partnerships such as Post Office Plus, which could provide additional routes for reaching potential customers.
Following the strong start to the year, Telecom Plus reaffirmed its FY27 guidance for adjusted profit before tax of between £80 million and £90 million.
The company is also maintaining its dividend while progressing a £40 million share buyback programme. These shareholder returns reflect management’s confidence in the group’s ability to generate sustainable earnings growth as its five-year strategy develops.
From an investment perspective, Telecom Plus continues to demonstrate improving margins and strong return on equity, although rising leverage and fluctuations in cash flow provide some counterbalance. Valuation remains comparatively supportive, with a low price-to-earnings ratio and a high dividend yield.
Technical indicators are considerably weaker, however, with the shares trading below all major moving averages and momentum indicators remaining negative.
More about Telecom Plus
Telecom Plus, which operates under the Utility Warehouse brand, is a UK-listed provider of essential household services offered primarily through subscription-style relationships.
Its services include energy, broadband, mobile and insurance, which are delivered through an integrated platform and marketed through a nationwide network of local Partners. Utility Warehouse aims to provide customers with competitive pricing and the convenience of combining multiple household services into a single monthly bill.
The business model is centred on recurring revenues, cross-selling additional services to existing households and maintaining high levels of long-term customer retention.
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