Telecom Plus Projects Strong Profits Amid Customer Growth

Telecom Plus plc (TEP.L) maintains its profit guidance, forecasting £124M-£128M in adjusted pre-tax profits. The company reports impressive customer growth and increased dividend expectations, supported by a strong balance sheet and a thriving acquisition strategy.

Date: 29-04-2025

AI Rating: 7

Earnings Outlook: Telecom Plus expects full-year adjusted pre-tax profits to be within the range of £124 million to £128 million. This forecast aligns with previous guidance and suggests steady performance, which is a positive indicator for investors looking for stability.

Customer Growth: The 15% net increase in customers, including significant contributions from TalkTalk's fixed-line and broadband customers, indicates robust demand for Telecom Plus's services. A continual organic growth rate of over 12.5% showcases the company's ability to attract and retain customers, which is essential for driving future revenue growth.

Dividend Increase: The raised dividend expectations, now set at 94p per share, signify confidence in the company's cash flow and profitability. An increase in dividends can often lead to higher investor sentiment and stock demand, reflecting positively on the stock price.

Balance Sheet Strength: The company’s projected leverage ratio of about 1.0x net debt to adjusted EBITDA reflects a strong financial position. A low leverage ratio indicates less risk and greater flexibility for growth and investment, making Telecom Plus an attractive prospect for conservative investors.

Acquisition Strategy: The company’s innovative word-of-mouth marketing approach, combined with the partnership for cross-selling trials, is driving growth. The unique integration of utility services with existing customer care highlights a strategic advantage that could lead to long-term customer loyalty and enhanced revenues.

Overall, this trading update presents a generally positive outlook for Telecom Plus, primarily driven by profitable growth, a strong balance sheet, and a clear customer acquisition strategy.

Stocks: TEP.L