Multi-service provider Telecom Plus (GB:TEP) announced that it added more than 80,000 new customers in the first half of the fiscal year 2023, despite a challenging environment – sending the company’s stock soaring.
This brings the total customer base of the company to 8,14,684 as of September 2022.
This led the company to up its full-year profit guidance number higher than current expectations. The stock reacted positively to the news and climbed by almost 20%.
Higher profits will be mainly driven by customer growth due to better discount offers from the company, such as a £2,500 price guarantee scheme. This is well supported by cost-cutting programmes that will increase profits.
Overall, the stock is trading up by 46% in the last year.
Who runs the Utility Warehouse?
Utility Warehouse is a brand name owned by the parent company, Telecom Plus.
It offers a broad range of utility services such as broadband, energy, mobile, and insurance in the UK.
Analyst View
After the record customer growth, analysts at Peel Hunt (GB:PEEL) raised their target price on the stock from 1,950p to 2,600p.
They commented, “Telecom Plus has a compelling proposition in a very tough consumer environment. This should drive strong profit growth and attractive dividend flow. The company has a c.3% share of households, and so there is plenty of room for the business to be materially larger.”
Conclusion
During a time when high energy prices and cost-of-living pressures are hurting profits, Telecom Plus’ news came as a pleasant surprise to its shareholders.
The company aims to double its customer base over the course of the next five years. It is well-placed to further drive higher returns for its shareholders by offering savings in energy bills at the time when they are needed the most.
