Trading Update and Notice of Results

Telecom Plus PLC (trading as Utility Warehouse or UW), which supplies a wide range of utility services focussed on domestic customers, today issues a trading update for the six-month period ending 30 September 2023.

Continued double-digit annualised customer growth in a stable market

Over 62,500 additional households switched to UW in the first 6 months of FY24, representing an annualised growth rate of over 14%. With 949,180 households now taking their services from UW, we are comfortably on track to double the size of our high quality base over the medium term, and expect to pass the one million customer milestone during the current financial year.

The number of services we supply to our customers increased by 170,698 during the period, to a total of 2,968,846, reflecting continued strong multiservice take up amongst new customers seeking to maximise the savings that they can make on their household bills.

As stability has returned to the energy retail markets after two years of 'crisis', the business is continuing to perform strongly, demonstrating its ability to outcompete and grow rapidly in a normalised environment: our enduring multiservice cost advantage enables us to sustainably and profitably offer home owners some of the lowest priced services across the energy, broadband, mobile and insurance markets.

Deepening our long-term relationship with E.ON

We are pleased to have updated our existing long-term energy supply contract with E.ON to ensure the sustainability of the agreement over the remaining 10 year term (until December 2033). This agreement underpins our ability to deliver comfortable double-digit customer growth over the medium term by focusing on our unique multi-service proposition, route to market and customer management expertise. E.ON remains responsible for wholesale energy market activities, weather-related balancing costs and seasonal working capital movements associated with our growing energy customer base.

The agreement has been refined so that the amount we pay to E.ON for the wholesale services it provides is more closely matched to the wholesale cost components in the price cap (rather than using a proxy percentage of the total price cap). This improved approach is more accurate, reducing risk for both parties, and means both parties now benefit from the full price cap allowances which relate to the activities for which they are each responsible (e.g. customer bad debts in the case of UW). Importantly, the updated supply contract provides us with greater flexibility, enabling us to develop and launch a wider range of energy products - for example a broader set of attractively priced fixed tariffs to both the residential and small business markets. The amended contract also provides a framework for UW to develop innovative 'time of use' tariffs (suitable for EV charging and home generation & storage).

Looking ahead, it is clear there will be significant opportunities as the energy retail market evolves and continues its transition towards net zero. Our updated energy supply agreement will provide the capabilities and flexibility required to take full advantage of these over time, and we therefore anticipate modestly increasing our investment in the proposition from FY26 to further accelerate our customer growth trajectory.

Outlook and notice of results

We reaffirm our guidance for the full year and look forward to providing a further update with our half year results on 21 November 2023.

Stuart Burnett and Andrew Lindsay, Co-CEOs, said:

"Our disruptive model - of not simply supplying energy, telecoms or insurance like other suppliers, but bundling those services together and sharing the savings we make with our customers - means we have consistently been offering the lowest priced energy in the country for the past two years.

As a result more and more households are hearing about UW, and choosing to switch their household services to us: we are hugely proud to have helped a further 62,500 families to stop wasting time and money with their existing suppliers since April.

We are delighted to have updated our existing energy supply agreement with E.ON, ensuring its sustainability for both of us over the next ten years, and enhancing it to enable us to innovate more freely within the energy market and to support increasing numbers of UK households as we transition to net zero over the decade ahead.

We now have the platform from which we can further build on our current strong rate of growth, and with pressure on household budgets driving ongoing demand for savings, we look forward to welcoming our millionth customer to UW in the coming months."

Steven Grove, Director of Energy Markets UK at E.ON, said:

"UW is a key partner for E.ON and we are delighted to have updated our long-term contract, reducing risk and allowing both parties to focus on the services for which they have proven competencies."

Customers benefit from the convenience of a single monthly bill, consistently good value across all their utilities and exceptional levels of service.