Telecom Plus targets dividend boost as customer numbers, profits grow

Utilities provider Telecom Plus said it was on track to meet full-year guidance and targeted a dividend increase of at least 13% after a sharp increase in customer numbers offset a decline in revenues due to lower energy prices.

The company, which trades as Utilities Warehouse and bundles energy, broadband, mobile phone and insurance services, posted a 9.2% rise in interim pre-tax profit to £39m, while on an adjusted basis they rose 505% to £46.1m. Revenue fell to £698m from £883.6m.

Customer numbers rose 66,829, or 13% on an annualised basis, to 1,078,318.

Chief executive Stuart Burnett said the company was confident in meeting fiscal 2025 guidance of 12%-14% customer growth and £124-£128m of adjusted pre-tax profit.

He added that the firm’s capital allocation policy had been updated to prioritise dividend growth, with a target dividend payout ratio of 80-90% of adjusted net profit.

“On the basis of our restated financial guidance, this would result in our full year dividend payout increasing by at least 13% to 94p,” he said.

Telecom Plus forecast £3m of extra costs in full-year 2026 due to higher national insurance charges and a rise in the National Living Wage introduced in the new Labour government’s recent Budget “which we expect to be able to mitigate”.

“The tax rises introduced in the recent Budget are expected to increase the pressures on household budgets, an environment in which the savings and earnings provided by our business model are likely to be in growing demand,” Burnett said.

“We look forward to helping more and more people up and down the country as we take further strides towards doubling the business to 2 million customers and beyond."

Reporting by Frank Prenesti for Sharecast.com