Telecom Plus boasts record profits thanks to failure of competitors

Telecom Plus has hailed its best-ever annual performance after the multi-utility supplier’s customer growth was supercharged by the failure of competitors.

Turnover at the FTSE 250 business – which trades as Utility Warehouse – skyrocketed by more than £1.5billion to a record £2.48billion for the 12 months ending March, with almost all growth the result of higher electricity and gas revenues.

Statutory pre-tax profits rose by 81 per cent to a record £85.5million even as Telecom Plus passed on over £30million of energy savings to consumers.

The surge in energy prices resulting from the Ukraine war and end to Covid-19 curbs led to the collapse of multiple energy suppliers, with many of their customers subsequently applying for Utility Warehouse’s energy services.

But the company has also seen stronger demand for its broadband, insurance and cashback card offers.

This helped the group far exceed internal targets last year, with a 22 per cent growth in customer numbers and a 24 per cent increase in services revenue. 

However, gains were tempered by higher employee, technology and infrastructure costs over the reporting period.

‘This has been an outstanding year for the company,’ said Andrew Lindsay and Stuart Burnett, joint chief executives of Telecom Plus.

‘The fundamental strengths of our business model have reasserted themselves and delivered a strong outcome for all our stakeholders – particularly for our customers who benefitted from the lowest energy prices in the country throughout the year.’

Telecom Plus shares jumped 7.55 per cent to £16.24 on Tuesday afternoon, making them the biggest riser on the FTSE 250 Index.

It also announced a hike in its final dividend to 46p per share, compared to 30p for 2022.

For the current year, Telecom Plus expects a ‘modest’ headwind from the recent fall in the Ofgem price cap, but also a ‘comfortable’ double-digit rise in customers.

This, it says, will produce a ‘broadly corresponding’ boost in adjusted pre-tax profits.

Russ Mould, investment director at AJ Bell, said: ‘The failure of energy suppliers such as Bulb, Ampower, Igloo, Hub Energy and many, many more has caused great distress to many households, but a lot of them have been able to get help from Utility Warehouse’

‘As a result, the FTSE 250 firm is looking forward to healthy further customer and profit increases in the year to April 2024, even after a record twelve months just ended.’