Telecom Plus shares fall after profit warning on price cap impact
Utility supplier Telecom Plus on Wednesday warned that full year profit would be lower-than-expected as the UK government's price cap hit results in the final quarter.
Shares in the multi-utility provider fell in early trade as it said adjusted full year profit before tax was expected to be towards the lower end of earlier forecasts of £56m, the company said.
It added that underlying cash flow remained strong, although net debt increased to approximately £38m from £11.2m, reflecting higher working capital requirements associated with changes to the phasing of certain energy industry payments, higher technology investment , smart meter roll-out costs and a share buy back in July 2018.
“We are encouraged by the profit outlook for the current year. The combination of accelerating growth in customer numbers and a small increase in our gross margins - resulting mainly from the improved supply arrangements with npower - mean that we expect adjusted profits before tax of between £60m and £65m for full year 2020, with a commensurate increase of (around) 10% in the total dividend to 57p per share in line with our published distribution policy,” the company said.
Telecom Plus provides mobile, gas, electricity as well as landline and broadband services.