Telecom Plus (TEP) reveals full-year results and ambitious five-year growth plan
Telecom Plus (TEP) shares are trading down 26.3% at 705p on the London Stock Exchange today, 2026-06-23, following the release of its full-year results for the period ending March 31, 2026. The company also unveiled an ambitious new five-year growth plan, which includes significant investment and a revised shareholder distribution policy. The stock closed yesterday at 956p.
The sharp decline stems primarily from lower earnings guidance for the 2027 financial year and a substantial dividend reduction. Telecom Plus anticipates adjusted pre-tax profit for FY27 to be between £80 million and £90 million, a considerable decrease from the £132.2 million reported for FY26. This revised outlook is attributed to a new five-year strategy aiming to more than double its multi-service customer base to over 1 million by FY31, requiring approximately £55 million per annum in profit and loss investment. Furthermore, the company declared a final dividend of 12p, a 79% reduction from 57p a year earlier, bringing the total dividend for the year to 50p, down 47% from 94p.
This movement follows an April 2026 profit warning, where Telecom Plus indicated its FY26 profit would be at the lower end of its guidance due to reduced energy usage during a warm winter and heightened competition. That announcement caused an 11% drop in shares at the time. Despite these profit concerns, the company reported strong customer growth, with total customer numbers increasing by 23% to 1.4 million, though its churn rate rose to 14.2% from 13.7%.
Why Revised Profit Expectations Hit Telecom Plus
Telecom Plus, also known as Utility Warehouse, operates as a multi-utility provider in the United Kingdom. Its core business involves bundling essential services like energy, broadband, mobile, and insurance for households and small businesses. By offering multiple services through a single bill and often incentivising customer acquisition through a network of partners, the company aims to simplify utility management and provide cost savings, generating revenue from each service provided.
The significant downward movement in Telecom Plus shares today stems primarily from a sharp reduction in its future profit expectations. The company announced that it anticipates adjusted pre-tax profit for the 2027 financial year to be considerably lower, projecting between £80 million and £90 million. This contrasts sharply with the £132.2 million reported for the recently concluded 2026 financial year. This revised outlook, which also led to a substantial cut in its dividend, is tied to a new five-year growth strategy requiring significant investment to expand its customer base.
This re-evaluation of future profitability directly impacted the company's valuation, causing its shares to trade down 26.3% to 705p, a notable drop from yesterday's closing price of 956p. Investors are reacting to the prospect of lower earnings for the upcoming year compared to previous forecasts.
Consider a software company that has consistently delivered new features and revenue growth. If that company suddenly announces that its next major product release will be delayed by a year and will generate significantly less revenue than initially projected, its stock price would likely fall. The market is adjusting its valuation based on the new, lower expectations for future financial performance, just as it has with Telecom Plus's revised profit guidance.
Telecom Plus
Telecom Plus Plc (TEP) operates as a diversified utilities provider across the United Kingdom. Established in 1996, the company delivers a comprehensive suite of services under its Utility Warehouse and TML brands. Offerings encompass essential utilities such as gas, electricity, fixed-line and mobile telephony, and broadband internet. Beyond core utilities, Telecom Plus also extends into financial services, providing insurance products including bill protection, life cover, and home insurance, alongside boiler cover and cashback card services. The company is headquartered in London, United Kingdom.