18 July 2012
Telecom Plus PLC (LSE: TEP.L - news) (the "Company")
Interim Management Statement
Telecom Plus PLC (trading as the Utility Warehouse), which supplies a wide range of utility services (gas, electricity, fixed line telephony, mobile telephony and broadband internet) to both residential and business customers, today issues its Interim Management Statement to cover the period from 1 April 2012 to 17 July 2012. This incorporates information relating to the performance of the business for its first quarter ended 30 June 2012, to coincide with its Annual General Meeting ("AGM") being held later today.
Highlights
· Continuing strong organic growth
· Positive cash generation
· Further improvement in customer quality
· Launch of enhanced mobile tariffs
· Customer numbers up by 10,917 during the quarter to 426,406 (30 June 2011: 378,738)
· Number of services up by 53,316 during the quarter to 1,434,339 (30 June 2011: 1,209,276)
Operating Review
The encouraging momentum we saw developing during the previous quarter has continued, with organic growth significantly ahead of the level we achieved in the corresponding period last year.
Overall customer numbers increased during the first quarter by 10,917, representing an increase of almost 50% on the same period last year (2012: 7,388) and the number of services provided rose by 53,316 (2012: 38,140).
Since the year end, the quality of customers joining our Discount Club has continued to improve, with over 55% of new residential Club customers applying for at least four of our core services (gas, electricity, landline, broadband and mobile). As a result, the average number of services taken by residential Club customers grew from 3.63 to 3.68 during the period.
Within our residential Club, the annualised growth in the number of new services supplied during the quarter of 17% is particularly pleasing, as it was achieved notwithstanding a number of significant distractions. These included Easter, the Diamond Jubilee, Euro 2012, and a promotional incentive which saw almost 200 of our best performing distributors visiting the USA for a week's holiday at the end of April.
In June, we launched a range of new mobile tariffs, primarily to make our offering more attractive to customers who want a data bundle with their Smart Phone. These changes have been well received by our distribution channel, and we have already seen an encouraging increase in the proportion of new customers taking our mobile service as part of their multi-utility bundle over the last few weeks. We regard mobile telephony as a core element of our business, and remain committed to building our share of this substantial market.
Customer, Distributor and Service Numbers
Cash Flow
Underlying cash flow remains in line with management expectations, with positive cash generation of almost £4m during the period, resulting in a net cash balance of £4.7m as at 30 June 2012 (31 March 2012: £0.9m).
Outlook
Trading since the year end gives us confidence that our half yearly results will show earnings, pre-tax profits and organic growth firmly ahead of the corresponding figures for last year, and on target to meet market expectations for the full year.
The macro-economic climate remains highly favourable for our business model, with consumers receptive to learning both how they can reduce their outgoings by switching to a new utility supplier, and/or build a secure and reliable part-time income by promoting our services as a distributor.
Confidence (BSE: ZCONFIDE.BO - news) within our distribution channel has never been higher, and we are encouraged by the improved productivity we are starting to see from new distributors following the introduction of a new coaching programme in January this year. As a result, we anticipate further strong organic growth over the coming months.
A number of the 'Big 6' energy suppliers have drawn attention recently to the upward cost pressures they are facing due to higher forward wholesale prices for gas over the coming winter (compared with last year) and rising non-commodity costs associated with investing in greener generation initiatives and upgrading the distribution infrastructure. We therefore expect that retail energy prices will increase this autumn, albeit probably by less than they rose last year.
Notice of results
We anticipate issuing our half yearly results for the six months ended 30 September 2012 on 20 November (Stuttgart: A0Z24E - news) 2012.
Andrew Lindsay, Chief Executive said:
"We have seen an extremely positive start to the year, with organic growth materially ahead of the levels we achieved in the corresponding period last year."
"Confidence within our distribution channel has never been higher, and we anticipate further strong organic growth over the coming months."
"Trading since the year end gives us confidence that our half yearly results will show earnings, pre-tax profits and organic growth firmly ahead of the corresponding figures for last year, and on target to meet market expectations for the full year."
For more information please contact:
Telecom Plus PLC
Andrew Lindsay, Chief Executive 020 8955 5000
Chris Houghton, Finance Director
Peel Hunt LLP
Richard Kauffer / Dan Webster 020 7418 8900
N+1 Brewin
Nick Owen / Graeme Summers 0845 059 6412
MHP Communications
Reg Hoare / Katie Hunt 020 3128 8100
About Telecom Plus PLC:
Telecom Plus (Berlin: T8T.BE - news) which owns and operates the Utility Warehouse brand, is the UK's only fully integrated provider of a wide range of competitively priced utility services spanning both the Communications and Energy (NYSEArca: JJE - news) markets.
Customers benefit from the convenience of a single monthly bill, consistently good value across all their utilities and exceptional levels of customer service. The Company does not advertise, relying instead on "word of mouth" recommendation by existing satisfied customers in order to grow its market share.
Telecom Plus also has a wholly owned subsidiary called TML purchased in 2002, which supplies predominantly fixed line telephony to small and medium sized business customers through a network of authorised resellers and dealers.
Telecom Plus is listed on the London Stock Exchange (LSE: LSE.L - news) (Ticker: TEP LN). For further information please visit: www.telecomplus.co.uk.
Telcos face the heat for huge debt imposed by Trai - Times of India
Now, with the huge reserve prices recommended by Trai, the cost of spectrum would be even higher, even with the most timid bidding by telcos. In any case, telcos had to bid aggressively in the 3G auctions because of the thin sliver of spectrum on offer, with no clarity whatsoever as to future availability of spectrum.
Such artificial shortage of spectrum and lack of forward visibility on spectrum availability are set to continue: the regulator has recommended hoarding as much as four-fifths of the spectrum available.
And what does Mr Khullar understand to be the sector regulator's responsibility: to maximise spectrum sale proceeds or to ensure a competitive, financially-viable telecom sector that advances technologically and across geography and socioeconomic classes to bridge the digital divide?
His conceptualisation of mobile broadband as being useful for "surfing the Net and watching TV" is sadly uninformed.
Many countries have decreed broadband access a fundamental right not for such pastimes but to reap the riches of information and transaction promised by ubiquitous broadband in fields as varied as financial inclusion, education, healthcare, governance, commerce, innovation and distributed work, besides entertainment.
The resultant economic gains and the tax yields from them would exceed, by far, spectrum sale proceeds. A huge debt burden on telcos, incurred to funnel funds to the government, stalls expansion and that is a sufficient ground to avoid adding to the debt.
The point is to make spectrum as inexpensive and as equitably available as possible, while technology and regulation mature to replace allocation of dedicated spectrum with dynamic allocation from competing pools.
And the dispute between telcos and Trai on how much tariffs would need to rise must be resolved via a transparent dialogue.
Motorola says smartphones will be available in US despite ban - PC Advisor
Motorola Mobility said Tuesday that it has taken "proactive measures" to ensure that its smartphones remain available to consumers in the U.S., despite a U.S. International Trade Commission ban on its phones that comes into effect on Wednesday.
The ITC ordered on May 18 this year, on a complaint from Microsoft, a limited exclusion "prohibiting the unlicensed entry for consumption of mobile devices, associated software and components thereof " covered by claims 1,2,5 or 6 of U.S. Patent no. 6,370,566. The patent, assigned to Microsoft, relates to generating meeting requests and group scheduling from a mobile device.
The order becomes effective Wednesday after a 60-day period of Presidential Review.
The commission did not however specify the mobile devices affected. The order provides an exception for service, repair, or replacement articles for use in servicing, repairing, or replacing mobile devices under warranty or insurance contract. The ITC investigation is numbered 337-TA-744.
"In view of the ITC exclusion order which becomes effective Wednesday with respect to the single ActiveSync patent upheld in Microsoft's ITC-744 proceeding, Motorola has taken proactive measures to ensure that our industry-leading smartphones remain available to consumers in the U.S.," Motorola said in a statement. "We respect the value of intellectual property and expect other companies to do the same," it added.
Motorola, which is owned by Google since May, may get around the ban by disabling or implementing differently a specific calendar synching feature of ActiveSync in which calendar meeting requests are generated by an ActiveSync-enabled mobile phone, that the Microsoft patent relates to, according to a source who declined to be named.
Motorola is locked in patent disputes with Microsoft and other companies before the ITC and in courts in the U.S. and elsewhere.
John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com
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