Telecom Plus, the utility provider which trades as Utility Warehouse, said full year profits are expected to be slightly ahead of market expectations, after it enjoyed a recent acceleration in organic growth.
The group said that customer numbers for the first nine months of its financial year, which runs to the end of March, are ahead by 31,180, and service numbers for the same period are ahead by 151,032. These represent annualised growth rates of 11% and 17% respectively.
On top of the growth in customer numbers the group is seeing customers taking more services, on average, from the group, with the proportion of new customers who are taking at least four services from the group exceeding 50% in recent weeks. This trend can be expected to drive both higher average revenue per customer and lower churn over the months and years ahead.
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The group is making progress on reducing the level of bad debts, with the proportion of customers who are at least two months in arrears running at almost half the level it was 18 months earlier.
Current trading is looking solid, with distributor activity levels up sharply in January after a number of initiatives introduced at the end of 2011. "If this is sustained over the coming weeks, then we look forward to reporting record growth in service numbers for the current quarter, when we announce our preliminary results in a few months time," the group said.
The company revealed it is set to pay a final dividend of 17p which would make the full year dividend 27p, up from 22p the year before.
The company expects to outgrow its existing headquarters (HQ) in the next year or two and so has coughed up £6.6m for a freehold interest in Merit House, in London's Edgware Road. The Telecom Plus directors consider that the purchase price, which amounts to around £50 per square foot, is a bargain for a building which has the potential to provide the company with sufficient office space on a single site to support a customer base in excess of one million households, which is in line with the group's medium term growth objectives for the business.
Total refurbishment costs are expected to amount to around £10m spread over 18 months. Once the group has relocated to its new HQ it will sell its old one.
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