Telecom Plus sees growth accelerate in second quarter

8th Oct 2013 07:27

Growth has accelerated in the second quarter at utilities reseller Telecom Plus as it enjoyed record levels of distributor recruitment.The FTSE 250 company, which operates via the Utility Warehouse brand and uses customers as distributors, reported "significant acceleration" in the growth of new customers, which had taken it close to the 0.5m mark. Growth of 17% in new customers had led to 24% growth in services, generating total growth for the half of 50% and 54% despite strong advertising campaigns from competitors. Chief Executive Andrew Lindsay said: "Not only have we seen record numbers of new customers and distributors joining the business during the period, but this has been accompanied by a further improvement in the quality of our customer base." The number of new residential customers of its 'Discount Club' services taking up at least four core services - from home phone, broadband, mobile, gas and electricity - has remained above 55%, taking the company's installed base of members with at least four major services up to 42.1% and helped drive the average number of services taken by each residential customer to a record high of 3.92.The company said it had suffered higher short-term costs due to its faster organic growth and from the first changes associated with regulator Ofgem's Retail Market Review (RMR).But despite this, half yearly results are expected to show pre-tax profits and earnings per share modestly ahead of the figures for the comparable period last year. "Shareholders can also look forward to an increase of over 20% in our interim dividend payment to 16p per share, in line with our previously announced intention of achieving a more equal balance between our interim and final payments each year," the company said. Lindsay added that he believed the implementation of RMR in the coming months will "create an exciting opportunity" for the company to gain more customers. House broker N+1 Singer said this led it to be increasingly confident in the outlook for 2015, where it saw scope for forecast outperformance.Analyst James Tetley said: "A positive statement, which confirms that momentum in the business continues to build in spite of significant investment in advertising by competitors - including bundling free TV with broadband - and the distraction of the RMR."Shares in TEP were up 2.8% at 08:13 on Tuesday. OH