While the big players of the UK utility and telecom sectors often hog the headlines, Telecom Plus (LON:TEP), the owner of Utility Warehouse, continues to fly somewhat under the radar. Yet, their latest results are impossible to ignore, record profits, a record dividend, and a healthy bump in customer numbers. In a market where uncertainty reigns, that’s impressive.
Why should we care about Telecom Plus? Because it’s a reminder that business models which prioritise simplicity, customer loyalty, and multi-service bundling can still thrive, even when revenues take a hit.
The headline numbers tell an interesting story. Revenue fell nearly 10%, largely thanks to Ofgem’s price cap squeeze on energy tariffs. That’s not Telecom Plus’s fault, it’s just the harsh reality of the regulated energy market right now. Yet, despite this, pretax profit climbed over 5%, and adjusted profits even better, which signals solid operational efficiency and clever diversification.
Their customer base is growing too, by 15% year-on-year, now topping 1.2 million. The acquisition of TalkTalk’s fixed-line and broadband customers helped, sure, but organic growth of 13% in such a competitive sector is nothing to scoff at. Telecom Plus’s strength lies in bundling everything from gas and electricity to broadband and mobile into a single package. It’s a neat trick that keeps customers sticky and bills predictable.
CEO Stuart Burnett’s point about their business being “largely immune” to external shocks rings true. The model isn’t reliant on flashy growth or speculative gambles, it’s built on steady, incremental expansion. With inflation worries, economic woes, and geopolitical concerns dominating headlines, a model like this offers a reassuring degree of stability.
And the dividend, a 13% increase to 94p per share, will have plenty of income-focused investors nodding in approval. Telecom Plus isn’t the fastest-growing tech darling, but for those looking for steady returns in uncertain times, it ticks a lot of boxes.
Of course, the market’s slight dip in share price following the announcement shows that even solid performers don’t always get a free pass. Investors may be weighing the revenue drop or anticipating future regulatory hurdles. Still, Telecom Plus shares have gained around 18% this year, reflecting confidence in the company’s long-term story.
Telecom Plus might not be the flashiest name on the FTSE 250, but it’s quietly carving out a niche in a tough market. For anyone watching the utilities sector, it’s worth keeping an eye on this quietly resilient operator, a reminder that sometimes, slow and steady does win the race.