Price rises on the way at Telecom Plus

13th Jul 2011 08:37

Utility services provider Telecom Plus has seen an organic growth spurt at the start of its financial year, but warned that it will soon have to fall in line with its competitors and hike prices.In respect of the period from 1 April to the end of June - the company's first quarter - overall customer numbers increased by 7,388 to 378,738, a significant improvement on the 5,680 customers added in the corresponding quarter of last year.The number of services provided rose by 38,140 (Q1 2010: 30,847) to 1,209,276. "It is particularly pleasing to have seen a substantial rise in the proportion of new members applying for at least four different core services from us, and annualised growth in the number of mobile services holding steady at around 60% for a second consecutive quarter," the company said.Underlying cash flow remains in line with management expectations, with positive cash generation of more than £10m during the period. Short term borrowings as at 30 June 2011 should be in the region of £5.0m (31 March 2011: £15.5m) once the final numbers have been totted up, but the company expects these borrowing will have been eliminated and replaced by a positive cash balance of a similar size by 30 September 2011, notwithstanding the £9.7m cost of paying the proposed final dividend for last year which is expected to be made on 5 August 2011."We expect a steady increase in our current rate of organic growth over the coming months, driven by the large number of new distributors joining each month, and continuing strong demand for our unique multi-utility proposition," said Andrew Lindsay, the company's chief executive."We anticipate that our half yearly report will show earnings, pre-tax profits and organic growth significantly ahead of the figures for the comparable period last year," Lindsay added.On the subject of price rises, the company said it "reasonable to expect" it would shortly announce higher tariffs, what with several of the so-called Big Six energy suppliers having recently announced hikes averaging around 15% to 17%, but pledged to maintain the company's "competitive position" on pricing.In early trading on the day of the trading statement the shares were 4p lower at 695p. --jh