About Telecom Plus PLC

Telecom Plus PLC (LSE:TEP), which operates under the Utility Warehouse brand, is a UK multi-service provider offering household customers bundled essential services including energy, broadband, mobile and insurance. Its model is based on encouraging customers to take multiple services from one provider.

The company has historically focused on customer growth, increasing the number of services taken per household and generating Recurring Revenue from its subscription-style model.

Why Is Telecom Plus Up 0.12%?

According to the market data you supplied, Telecom Plus shares gained approximately 0.12%.

The modest positive move comes against a more mixed fundamental backdrop. Telecom Plus reported strong FY2026 revenue and customer growth, but also announced a significant change in its Dividend structure and a five-year Investment programme that is expected to constrain near-term profit growth.

The company has nevertheless continued to demonstrate underlying customer and gross-profit growth, while its latest strategy aims to substantially expand the Utility Warehouse customer base over the longer term.

Strong FY2026 Revenue Growth

Telecom Plus reported FY2026 revenue of £1.941 billion, up 5.6% from £1.838 billion in FY2025.

Gross profit performed even better, increasing 8.7% to £389.2 million.

Adjusted pre-tax profit rose 4.7% to £132.2 million, while statutory pre-tax profit increased 6.7% to £113 million.

This demonstrates that the underlying Business continued to grow despite a challenging competitive environment.

Customer Growth Remains a Major Driver

Utility Warehouse's multi-service model remains central to the company's strategy.

Telecom Plus has identified increasing the number of customers taking multiple services as an important long-term opportunity. Its latest strategy targets more than one million multiservice customers by FY2031.

The company is targeting an additional one million customers over the medium term, according to its investor materials.

Higher customer numbers can increase recurring revenue while also creating opportunities to cross-sell additional household services.

Five-Year Growth Plan

One of the most important developments from the FY2026 results was Telecom Plus's new five-year strategy.

Management is targeting approximately £175 million of adjusted pre-tax profit by FY2031, compared with £132.2 million in FY2026.

The plan involves continued investment in:

  • Customer acquisition
  • Brand development
  • Technology
  • Service propositions
  • Multiservice penetration
  • Operational capabilities

The strategy is designed to prioritise long-term customer and profit growth rather than maximising short-term earnings.

Dividend Policy Has Changed

The FY2026 results also contained an important change for income-focused investors.

Telecom Plus reported a 100p total distribution per share for FY2026, compared with 94p in FY2025, when including the share buyback. However, the Cash Dividend itself fell substantially because the final dividend was reduced to 12p from 57p.

The company is instead combining dividends with share repurchases as part of its capital-allocation strategy.

This distinction is important because investors focusing purely on the cash dividend may view the change negatively, while the broader shareholder-return figure provides a different perspective.

£40 Million Share Buyback

Telecom Plus announced a £40 million share buyback as part of its FY2026 capital-return programme.

Share repurchases reduce the number of shares in circulation and can potentially enhance Earnings per share when executed at attractive valuations.

Recent company activity also shows continued repurchases during July 2026.

Utility Warehouse's Multi-Service Model

The company's core competitive proposition is bundling several household services into one relationship.

Customers can combine:

  • Energy
  • Broadband
  • Mobile
  • Insurance

The model aims to increase customer convenience while giving Utility Warehouse more opportunities to generate revenue from each household.

This creates a potential flywheel:

More customers → more services per customer → higher recurring revenue → stronger economics.

Competitive Pressure Remains

Although the underlying business continues to grow, competition has become an important concern.

Recent commentary around the FY2026 outlook highlighted pressure from competition and the need for significant investment to support the next stage of growth.

This explains why management expects near-term profits to remain constrained while it invests in customer Acquisition and the broader Utility Warehouse proposition.

Key Reasons Behind the Positive Move

1. Revenue Growth

FY2026 revenue increased 5.6% to £1.941 billion.

2. Strong Gross-Profit Growth

Gross profit increased 8.7%, outpacing revenue growth.

3. Customer Expansion

The company continues targeting substantial growth in its multiservice customer base.

4. Long-Term Strategy

The five-year plan targets approximately £175 million of adjusted pre-tax profit by FY2031.

5. Shareholder Returns

The £40 million buyback provides an additional mechanism for returning Capital to shareholders.

Key Growth Catalysts

Customer acquisition: Growing the Utility Warehouse customer base is central to the long-term strategy.

Multiservice penetration: Increasing the number of services per household can improve customer economics.

Broadband growth: Broadband provides an additional recurring household service.

Energy customers: Energy remains a core component of the Utility Warehouse proposition.

Technology investment: Better digital platforms could improve customer engagement and efficiency.

Scale benefits: A larger customer base could improve Operating Leverage over time.

Risks

Competitive pressure: Competition across energy, broadband and mobile could increase customer-acquisition costs.

Lower near-term profitability: Investment under the five-year plan may limit earnings growth in the short term.

Regulatory risk: Energy and financial services are highly regulated markets.

Customer churn: Higher customer switching could reduce recurring revenue.

Energy-market volatility: Changes in wholesale energy prices can affect the operating environment.

Execution risk: The five-year strategy requires significant investment and successful customer acquisition.

Dividend expectations: The reduction in the final dividend may concern income-focused investors.

Valuation

For Telecom Plus, investors should consider:

  • P/E
  • EV/EBITDA
  • Free cash flow
  • Dividend yield
  • Customer growth
  • Revenue per customer
  • Multiservice penetration
  • Net debt/EBITDA
  • Share buyback yield

Customer growth is particularly important because the business model relies heavily on recurring household relationships.

Investors should also distinguish between short-term earnings pressure caused by strategic investment and longer-term earnings potential.

Outlook

The outlook for Telecom Plus PLC (LSE:TEP) is focused increasingly on long-term customer growth rather than maximising near-term profits.

FY2026 demonstrated continued underlying growth, with revenue rising 5.6%, Gross Profit increasing 8.7% and adjusted pre-tax profit growing 4.7%.

However, management is investing heavily under its new five-year plan, targeting more than one million additional customers and approximately £175 million of adjusted pre-tax profit by FY2031.

For the 0.12% rise in your supplied market data, there is no clear evidence of a single major catalyst behind the small daily movement. The more important investment story is the balance between strong customer and gross-profit growth and the near-term pressure created by increased investment and competition.

Going forward, investors should monitor customer additions, multiservice penetration, gross-profit growth, customer-acquisition costs, cash generation, the buyback programme and progress toward the FY2031 profit target.