TIDMTEP
RNS Number : 0310Q
Telecom Plus PLC
16 June 2020
Embargoed until 07.00 16 June 2020
Telecom Plus PLC
Final Results for the year ended 31 March 2020
Telecom Plus PLC (trading as Utility Warehouse), which supplies
a wide range of utility services focussed on domestic customers,
today announces its final results for the year ended 31 March
2020.
Financial Highlights:
-- Results in line with expectations
-- Revenue up 8.9% to GBP875.8m
-- Adjusted profit before tax up 8.0% to GBP60.8m
-- Statutory profit before tax up 11.9% to GBP48.1m
-- Adjusted EPS up 4.7% to 61.8p
-- Statutory EPS up 8.0% to 45.9p
-- Full year dividend up 9.6% to 57p per share
-- New GBP150m debt facilities agreed until January 2023
Operating Highlights:
-- Continued growth in both Members and Partners
-- Services supplied up 6.4% to over 2.0 million
-- Rising Membership quality, with over 30% now taking their
energy, broadband and mobile services from us
Andrew Lindsay, CEO, commented:
"Our results this morning show record sales, earnings and
dividends, clearly demonstrating the resilience and strength of our
business model. I am extremely pleased at how well our Partners and
Employees have adapted to the Covid-19 environment, and the limited
impact which this is having on our business.
"We have historically demonstrated strong counter-cyclical
qualities, with the opportunity for our Partners to earn money, and
for our Members to save money, becoming increasingly relevant
during challenging economic periods. This dynamic is driving a
healthy recovery in Partner activity despite social distancing
restrictions, as they become increasingly comfortable with new ways
of building their businesses, and growth has recently started
returning towards pre-lockdown levels.
"The strength of our balance sheet is in contrast to most of our
competitors in the energy markets. This, combined with a highly
motivated and growing Partner network, and a significant fall in
the Ofgem price cap expected this autumn, means that we look
forward to the year ahead with considerable confidence."
There will be a virtual meeting for analysts today at 9.00am.
Please contact MHP Communications at: telecomplus@mhpc.com for dial
in details.
For more information please contact:
Telecom Plus PLC
Andrew Lindsay, CEO 020 8955 5000
Nick Schoenfeld, CFO
Peel Hunt
Dan Webster / George Sellar 020 7418 8900
Numis
Mark Lander / Simon Willis 020 7260 1000
MHP Communications
Reg Hoare / Catherine Chapman / Amy O'Sullivan 020 3128 8778
About Telecom Plus PLC ("Telecom Plus"): www.uw.co.uk
Telecom Plus, which owns and operates the Utility Warehouse
brand, is the UK's only fully integrated provider of a wide range
of competitively priced utility services spanning the
Communications, Energy and Insurance markets.
Members benefit from the convenience of a single monthly
statement, consistently good value across all their utilities and
exceptional levels of service. Telecom Plus does not advertise,
relying instead on 'word of mouth' recommendation by existing
satisfied Members and Partners in order to grow its market
share.
Telecom Plus is listed on the London Stock Exchange (Ticker: TEP
LN). For further information please visit www.uw.co.uk
Chairman's Statement
I am pleased to report another satisfactory year for the Company
in which we have seen revenues, profits and dividends all reach
record levels, accompanied by further organic growth in both
customer and service numbers.
Adjusted pre-tax profits increased by 8.0% to GBP60.8m (2019:
GBP56.3m), and statutory pre-tax profits advanced by 11.9% to
GBP48.1m (2019: GBP43.0m), on revenue up by 8.9% to GBP875.8m
(2019: GBP804.4m); adjusted earnings per share for the year rose by
4.7% to 61.8p (2019: 59.0p), and statutory EPS increased by 8.0% to
45.9p (2019: 42.5p).
Customer numbers for the year advanced by 2.7% (2019: 4.0%) to
652,237 (2019: 635,039) and service numbers advanced by 6.4% (2019:
8.8%) to 2,022,716 (2019: 1,901,319) reflecting a further
improvement in the quality of our customer base.
This creditable outcome clearly demonstrates the resilience and
strength of our unique business model. It has been achieved in the
face of an energy market that continues to be distorted by
suppliers with wholly unsustainable pricing strategies , and the
impact from Covid-19 which brought the consistently strong levels
of customer gathering activity we had been seeing from our Partners
throughout the period to a near standstill as the country went into
lockdown.
We received a number of awards during the year recognising both
the value we offer and the quality of service provided by our
UK-based support teams, including being ranked by Which? as one of
the top suppliers and/or as a recommended provider for all our core
services; we also received four awards from Moneywise.
These third party independent and prestigious endorsements are
testament to our customer-centric approach, our commitment to
treating our Members fairly, our ongoing mission to be the Nation's
most trusted utility provider, and the significant resources
invested in delivering the best possible customer service.
Dividend
We are proposing a final dividend of 30p (2019: 27p), bringing
the total for the year to 57p (2019: 52p); this represents an
increase of 9.6% compared with last year, and will be paid on 31
July 2020 to shareholders on the register at the close of business
on 10 July 2020 subject to approval by shareholders at the
Company's AGM which will be held on 23 July 2020.
We remain committed to a progressive dividend policy consistent
with the underlying strong cash generation of our business.
The Environment
As an organisation supplying energy to consumers we are acutely
aware of the environment in which we live, and more importantly our
responsibility to help protect it. Whilst we have limited scope to
influence how much electricity from each type of generation enters
the National Grid each year, we are committed to playing our part
in helping reduce the UK's overall carbon footprint.
We continue to make a significant annual investment in our free
LED light bulb replacement service, which we provide to around
30,000 households each year. Since launching this service, we have
installed over 5,000,000 energy efficient bulbs in 150,000 Members'
homes. By making it both free and easy for our Members to reduce
their electricity usage, we make a direct and significant positive
impact on our carbon footprint as a major energy supplier.
We fully support the national smart meter programme, and
recognise the role that smart meters can play in helping our
Members better understand and reduce their energy consumption.
Taking the decision to establish UW Home Services, and building its
nationwide fleet of almost 300 engineers to enable the timely
delivery of the programme, are important steps towards
decarbonising the UK energy market.
Our boiler installation business only installs highly efficient
A-rated boilers, predominantly from Vaillant and Worcester Bosch,
two of the world's leading manufacturers; this can significantly
reduce the amount being used compared with the less efficient
boilers we are replacing.
In addition, we have recently launched a green electricity
tariff and a carbon-offsetting tree-planting programme, further
demonstrating our commitment to protecting the environment.
Corporate Governance
The UK Corporate Governance Code (the 'Code') encourages the
Chairman to report personally on how the principles in the Code
relating to the role and effectiveness of the Board have been
applied.
As a board we are responsible to the Company's shareholders for
delivering sustainable shareholder value over the long-term through
effective management and good governance. A key role of mine, as
Executive Chairman, is to provide strong leadership to enable the
Board to operate effectively.
We believe that open and rigorous debate around key strategic
issues and risks faced by the Company is important in achieving our
objectives and the Company is fortunate to have non-executive
directors with diverse and extensive business experience who
actively contribute to these discussions.
Further detail of the Company's governance processes and
compliance with the Code is set out in the Corporate Governance
Statement in the Annual Report.
New Board Appointments
We are delighted to announce the appointment of Stuart Burnett
and Suzi Williams to the board, effective immediately following our
forthcoming AGM on 23 July.
Stuart Burnett
As Chief Operating Officer, Stuart is responsible for the day to
day running of our Energy, Telecoms and Financial Services
operations where he has been instrumental in driving the business
forward over the last few years. He has also played a key role in
ensuring the seamless continuity of our operations during the
Covid-19 lockdown.
He joined the company as Legal & Compliance Director in
early 2016, before becoming Commercial Director in 2018 and then
Chief Operating Officer last year. During the earlier part of his
career he qualified as a solicitor with Slaughter and May in 2008,
before working as a senior corporate lawyer at RSA Insurance Group
plc and TSB Banking Group plc.
Suzi Williams (non-executive)
Suzi brings to the board over 25 years' experience in telecoms,
media and consumer businesses in the UK and internationally. As
Chief Brand & Marketing officer at BT she was part of the team
who transformed the business, prior to which she held senior
leadership roles at Capital Radio Group, Orange, the BBC, KPMG
Consulting and Procter & Gamble Europe.
She has been a non-executive director at The AA since 2015,
where she chaired the Remuneration Committee until November 2019,
and currently sits on both their Risk and Nomination Committees.
She is also an independent non-executive at Zegona Communications
where she is Chair of the Remuneration and Nomination Committee,
and at Workspace Group where she sits on all their board
committees.
There are no other matters to disclose in relation to these
appointments under LR 9.6.13.
Recent Trading and Outlook
Recent Trading
Performance since our trading update issued on 21 April has been
encouraging, with churn remaining significantly below the elevated
levels seen during the previous quarter. We are also seeing a
progressive improvement in Partner activity and confidence as they
become increasingly proficient at signing people up remotely for
both our customer and Partner propositions.
The general disruption caused by the lockdown led to a small
reduction in our net customer base during April and May, although
this has now started to reverse, with new Partner recruitment
running over 40% ahead of the same period last year.
These trends support our current expectation for a modest
recovery in customer numbers over the coming months whilst the
country remains in partial lockdown, with a gentle acceleration
thereafter.
Energy Prices
The level of the Price Cap is expected to fall on 1 October 2020
by around GBP100, significantly narrowing the gap between our
standard energy prices (which are set at a sustainable discount to
the Ofgem 'fair price') and the cheapest deals at the bottom of the
market.
With many independent suppliers continuing to set their retail
prices at whatever level is required to attract new customers on
price comparison sites, irrespective of the impact this is having
on their profitability and cashflow, we have started to see record
losses (in aggregate amounting to over GBP450m) being reported in
their latest published accounts. Over 20 suppliers have left the
market over the last two years, and in the absence of strong
balance sheets to absorb their continuing losses, further
insolvencies seem inevitable.
Outlook
We remain uniquely well positioned to continue to build
shareholder value over both the near term and the years ahead, with
a diverse portfolio of essential household services, a motivated
Partner network, a unique integrated multi-utility business model,
market leading levels of customer retention, and a strong balance
sheet. These attributes have enabled us to build an exceptionally
high-quality customer base, and provide significant confidence over
our future earnings stream .
The income opportunity we offer our Partners has historically
proven highly resilient during recessionary periods, with
increasing numbers of people looking to replace and/or supplement
their traditional sources of income. This is expected to manifest
itself in a further uplift in Partner recruitment and faster growth
in new Members, as the economic reality of Covid-19 starts to
bite.
Historically the Board has always provided forward guidance, and
believe it is appropriate that we should continue to do so.
However, we would emphasise that current uncertainties relating to
the impact of Covid-19 make the range of possible outcomes for the
current year much wider than usual.
On the assumption that social distancing restrictions continue
to be progressively lifted (and are not subsequently retightened),
and with a modest increase in bad debts, we expect the profit
outturn for FY21 to be marginally below the level just reported for
FY20, in line with previous guidance. On that basis, and in the
absence of unforeseen circumstances, we expect to maintain the
dividend at 57p per share for the current year.
Once again, I would like to thank my boardroom colleagues for
their support and all our staff and Partners for their loyalty and
hard work which have played such a huge part in achieving our
strong performance this year. In particular, I would like to pay
tribute to our senior executives and their teams for successfully
managing the transition to remote working so seamlessly in response
to the recent unexpected pandemic, and to our fantastic workforce
who have embraced their new, temporary ways of working with such
positivity; this has enabled us to sustain the high standards of
support for both our Partners and our Members to which we are
committed.
By maintaining our relentless focus on supporting our Partners
and helping them achieve their goals, we will increase the number
of customers saving time and money on their essential household
services with UW, reaching our next milestone of one million
Members. Our medium-term growth objectives beyond this remain
unchanged, and I look forward to the opportunities and value that
achieving them will create for all stakeholders.
Charles Wigoder
Executive Chairman
15 June 2020
Chief Executive's Review
Markets
We supply a wide range of essential services under the UW
(Utility Warehouse) brand - energy, broadband, mobile and insurance
- to households and small businesses throughout the UK; these are
all substantial markets and represent a significant opportunity for
further organic growth.
The individual markets we operate in are generally dominated by
a relatively small number of former monopoly suppliers and other
owners of infrastructure assets, although in each there are also a
number of independent suppliers carving out their own niches,
generally based on offering highly competitive introductory deals
promoted through price comparison sites, national advertising, and
direct marketing campaigns.
Business model
Our business model is fundamentally different from our
competitors in two key respects:
1. Our multi-service customer proposition
We offer our Members a clearly differentiated product, saving
them both time and money by supplying them with all their home
services in one, simple, monthly bill. As the UK's only fully
integrated multi-service provider, we derive significant operating
efficiencies by spreading a single set of overheads across the
multiple revenue streams we receive from each of our Members.
2. Our route to market
Rather than seeking to attract new Members through expensive
advertising or price comparison sites, we rely on the personal
recommendations of over 45,000 Partners. Our Partners can earn a
small percentage of the monthly revenues generated by any Members
gathered, either personally, or by someone in their team. The clear
alignment of interests that this revenue-sharing model creates
enables us to sign up a uniquely high-quality customer
demographic.
We continue to pursue a differentiated strategy in the energy,
communications and insurance markets, focussing on delivering an
integrated multi-utility proposition that includes three key
benefits:
-- Simplicity - just one, simple bill for all your home services;
-- Savings - compared with prices previously paid; and
-- Service - delivered by our award-winning UK-based support teams.
These benefits are underpinned by our commitment to treating our
Members fairly, avoiding the business practice adopted by many of
our competitors of combining cheap introductory deals for new
customers with higher tariffs charged to their legacy customer
bases.
Ultimately our aim is to help our Members to simply get on with
their lives. They can switch once, be confident in the good value
and service we deliver, and never think about utilities again.
Most of our competitors in each of the individual markets in
which we operate seem focussed almost solely on price. We believe
this approach is not only viewed by their loyal customers as
fundamentally unfair, but makes it less likely they will succeed in
creating a sustainable long-term business - as customers who have
chosen to switch based solely on the headline price on a comparison
site will have a high propensity to do so again when their
introductory deal expires.
Our alternative approach of earning the trust of our Members, by
rewarding loyalty and commitment with additional savings and
benefits, is the key point of differentiation that will enable us
to achieve our medium-term growth objectives, helping us maximise
long-term shareholder value. The trusted relationship this creates,
and the consequent longevity of our Members, are illustrated by
switching data within the domestic electricity market: reported
churn amongst small and medium suppliers is currently running at an
annualised rate of almost 33% - over twice the level we are
experiencing.
These core values, as well as the consistently high standards of
service we deliver to our Members from our single support centre in
North London, are critical to our route to market, giving our
Partners the confidence to promote our services to their friends
and family.
The Net Promoter Scores ('NPS') of around 50 that we
consistently achieve reflect our relentless focus on this goal, and
are in stark contrast to the negative NPS scores prevalent within
the energy, telecoms and personal insurance markets.
We continue to invest in our technology systems, which enable us
to integrate all the services we supply into a single monthly bill,
supported by just one set of central overheads. This highly
efficient cost base is a key factor in enabling us to offer
attractive pricing and a wide range of valuable benefits to our
Members, a secure and growing income stream to our Partners, and a
progressive dividend for shareholders. We are pleased with the good
progress we've made on our ongoing programme to enhance and update
these systems, and look forward to the greater business efficiency
and flexibility this will deliver in due course.
We have strong commercial relationships with all our key
suppliers, who recognise the value of our unique route to market
and the importance of maintaining a competitive and clearly
differentiated market proposition.
To this end, we have regular and ongoing discussions with each
of them about how the market dynamics for each of our services are
changing, and the best way to ensure these are appropriately
reflected in our wholesale supply agreements. The average tenure of
these relationships - typically over 15 years - is testament to
their strength, and the value that our suppliers attribute to our
unique multi-service proposition and unique Partner distribution
network, both of which complement their own service offerings.
We are extremely pleased with the further progress we have made
this year in taking advantage of our multiple key points of
differentiation, and towards securing our position as the Nation's
most trusted utility provider.
Strategy
Our strategy is to progressively increase our share of the
markets in which we operate, primarily through organic growth, in
order to build a robust, sustainable and increasingly profitable
business.
We will achieve this by increasing the number of active Partners
that act as advocates of our business, and who, by doing so, are
earning a growing and sustainable income through UW.
At the heart of this strategy is the clear objective of making
it easier for our Partners to promote UW more effectively: we
maintain a relentless focus on delivering best-in-class service and
support to our Members, always treating them fairly, and investing
in our systems and staff to achieve this. Equally importantly, we
continually seek to simplify and, where possible, further improve
the competitiveness of our services, encouraging our Partners and
existing Members to talk about the unique benefits we offer to
their friends and families.
To improve the way we deliver this, we have made a significant
investment over the last 18 months in building a multi-disciplinary
marketing function, resulting in the brand refresh we initiated in
March this year; this aims to simplify our core messaging to
Members and Partners alike, with a clear and consistent
presentation across all the media and tools we use.
The coming decade is likely to provide a number of exciting
opportunities to build upon our existing strong relationship with
our Members, giving them both a better experience and better value
on services they currently obtain from other suppliers, whilst also
delivering a satisfactory return for our shareholders. These
include:
-- expanding our current range of services into related areas -
recent successful examples include launching Home Insurance,
establishing a nationwide boiler installation business and
introducing our Boiler & Home Care policy;
-- expanding the capability of UW Home Services to install smart
meters for other retail suppliers;
-- leveraging the national smart meter programme and shift to
smart energy services such as 'demand side response' programmes
through the installation of EV chargers, solar panels, air source
heat pumps, and in-home battery storage solutions through our
nationwide team of engineers; and
-- relaunching our SME B2B proposition.
We will also be looking at opportunities for replicating our
business model in other countries whose utility markets have been
opened to competition; this clearly offers significant upside, with
limited downside risk due to our infrastructure-light business
model and effective route to market.
Operational performance and non-financial KPIs
Despite a challenging competitive environment, our overall
performance for the year has been encouraging in a number of key
respects:
-- new Partner recruitment up almost 25% year on year
-- strong organic growth with service numbers up by 121,397 (2019: 153,195)
-- continued low churn against a background of record levels of energy switching
-- the proportion of Members switching all their services to us climbing to a record level
-- 47% of our Members now having a smart meter in their property
-- Which? 'Recommended Broadband Provider' March 2020
-- Which? 'Recommended Mobile Provider' April 2020
Against the background of a declining economy as a result of the
Covid-19 pandemic, and with household incomes under unprecedented
pressure, our value-based consumer proposition and the part-time
income opportunity we offer have never been so attractive to both
Members and Partners respectively.
Our continuing organic growth is underpinned by high levels of
confidence amongst our Partners in our brand and financial
strength, the good value we provide through our fair pricing
policies, and our commitment to delivering best-in-class service
and support to our Members.
Our Partners
We offer our Partners a smarter way to earn: in their own time,
on their own terms. They are one of the key strengths of our
business, and certainly our greatest point of differentiation.
Through UW, they can create real financial security for
themselves and their families by using their spare time to sign up
new Members and introduce our income opportunity to other
like-minded people; in doing so, they can earn meaningful
short-term financial rewards combined with a long-term residual
income. And by communicating the benefits of our unique
multi-utility retail proposition to high quality customers who in
many cases have never previously switched supplier, they give us a
significant competitive advantage - in stark contrast to the routes
to market adopted by other suppliers of similar essential household
services.
The alignment of financial interest provided by our
revenue-sharing model and the structure of our compensation plan
incentivise our Partners to focus on finding creditworthy
higher-spending Members who will reap the maximum savings from
using our services, and will thus be least likely to churn; by
doing so, they maximise their own long-term income. This ensures
that cases of mis-selling are both inadvertent and extremely
rare.
Our Quick Income Plan enables Partners to accelerate some of
their commission payments on high quality customers that they
introduce to UW. This initiative is a key driver behind the
increasing numbers of new Partners joining each month, and the high
quality of new Members they are gathering.
We are wholly committed to helping 'Team Purple' - our
45,000-strong community of Partners - to achieve their goals
through UW, whatever they may be. To this end, we continue to
invest in the digital tools we provide to them, further enriching
the training and personal development programmes that we run for
them, enhancing and simplifying the compensation plan, and running
a wide selection of short and medium-term incentives to motivate
them to greater levels of activity.
In response to Covid-19 social distancing restrictions, we
brought forward elements of our product roadmap to enable Partners
to sign up both new customers and new Partners remotely. We have
since developed these tools further to enable experienced Partners
to coach and support new Partners remotely on their first
appointments, and remunerate them accordingly. These developments
are exciting enhancements to our Partners' toolkits, and we believe
that they will lead to higher levels of Partner productivity and
success in due course.
We are encouraged by the recent acceleration in the number of
new Partners joining, with over 1,300 joining during the course of
last month; this was almost 50% higher than the same period last
year.
Our Members
2020 2019
-------- --------
Residential 627,058 608,371
Business 25,179 26,668
-------- --------
Total 652,237 635,039
Our focus remains firmly on leveraging our multi-service point
of differentiation in the residential market. There is a
significant difference in average expected customer lifetimes
between Members (and therefore in the revenues and profits they
will generate) depending on whether they own their own home, and on
the number of services we are providing to them.
The most attractive category are homeowners taking all their
services from us through our 'Double Gold' bundle (Energy,
Broadband and Mobile).
Our focus and success in attracting this type of Member has been
reflected in the consistently high proportion of new Members
gathered by Partners who switch all their core services to us, as
can be seen from the following figures:
Percentage of new
Members taking 'Double
Gold' bundle
---------------------------
Q1 FY18 50.9%
Q2 FY18 48.3%
Q3 FY18 48.6%
Q4 FY18 53.2%
Q1 FY19 55.3%
Q2 FY19 57.0%
Q3 FY19 57.6%
Q4 FY19 55.4%
Q1 FY20 59.0%
Q2 FY20 63.4%
Q3 FY20 60.9%
Q4 FY20 60.4%
It is extremely encouraging that since our Partners transitioned
to remote appointments in response to Covid-19, this proportion has
remained above 60%.
Average revenue per Member increased to GBP1,304 (2019:
GBP1,245) due to a combination of higher energy prices, seasonally
normal winter temperatures (the previous year was anomalously
mild), a steadily increasing proportion of fibre broadband services
within our membership base, and rising mobile ARPU as data usage
continues to grow; these were partially offset by a reduction in
average landline call spend.
Whilst we continue to regard the SME business market as an
exciting long-term opportunity, the dynamics of this space make it
extremely difficult to grow in the current energy wholesale pricing
environment.
Services
Our four core categories are Energy, Broadband, Mobile and
Financial Services; in addition, we provide a CashBack card to many
new and existing customers, and still supply a small number of
legacy telephony services.
At the year end, we supplied our members with a total of
2,022,716 services (2019: 1,901,319), an increase of 6.4% during
the year.
2020 2019
Core services
Energy 1,071,665 1,049,830
Broadband 323,901 304,678
Mobile 280,220 252,206
Insurance 28,550 14,485
Other services
Cashback card 288,043 245,620
Legacy telephony (NGN & Landline
only) 30,337 34,500
Total 2,022,716 1,901,319
Note: The lower total service numbers in the above table reflect
our decision to simplify the way we present these, by no longer
counting landline calls, line rental and broadband as separate
services where Members are taking more than one of these linked
elements; all Broadband customers are still taking all three of
these elements, but this is now being recognised as a single
service.
All our core services grew during the year, with the strongest
performances being a doubling in Insurance policies, a 17% increase
in the number of CashBack cards, and an 11% rise in Mobile
services.
We are encouraged that our electricity supply point churn of
just over 1% per month remains significantly below prevailing
industry levels, notwithstanding a widening gap between the Ofgem
'fair' price cap and the introductory deals offered by a number of
other energy suppliers. We attribute this to a combination of
factors including our fair approach to pricing, high standards of
customer service, and the steadily increasing proportion of our
customer base who are taking all our core services.
Supporting our Members
We pride ourselves on delivering a consistently high standard of
service to our Members through a single support centre for all our
core services based in north London; this ensures, where possible,
that the first person a Member speaks to is able to resolve any
issues they may have with their multi-utility account.
At the same time, we are always looking for ways to further
improve the service experience we deliver, hence our ongoing
digital transformation programme, and the numerous qualitative and
quantitative performance measurement tools that we employ to
monitor all aspects of our Members' interactions with us.
We have been delighted at the consistently high ratings, awards
and recognition we receive from Moneywise and Which? for the
quality of the service, support and value we provide to our
Members, and the overwhelmingly positive feedback we receive from
Members in our own surveys. We are particularly pleased to have
been recognised by Which? as their 2020 Recommended Provider for
both our Broadband services and our Mobile services.
This resounding endorsement of our services from the UK's
leading independent consumer champion is primarily a testament to
the consistent hard work of our support teams in North London, but
also reflects our commitment to genuinely earning the trust of our
Members, and provides huge confidence to our Partners when
recommending UW to their friends and families.
Ofgem Energy Price Cap
The Ofgem energy price cap ("the Price Cap") was introduced in
January 2019, and the subsequent immediate reduction in Standard
Variable Tariffs (paid predominantly by millions of disengaged
households) of around GBP75 led to a brief narrowing of the gap
between the price they were paying and the introductory fixed price
deals available to those who choose to switch supplier on a regular
basis ("the Gap"). Unfortunately, the Gap rapidly reverted back
towards its previous level. More recently, as wholesale energy
prices fell throughout last winter, the Gap expanded to record
levels, although it is expected to narrow significantly in October
2020 at the next six-monthly review.
Notwithstanding these fluctuations, we believe that the Price
Cap has created a fairer energy market than before, to the benefit
of millions of disengaged households. This is evidenced by the
significant negative impact being reported by the former 'Big 6' on
the profitability of their UK domestic supply businesses over the
period.
UW Home Services
To enable us to meet the increasingly challenging smart meter
roll-out targets stipulated by BEIS (The Department for Business,
Energy and Industrial Strategy) over the next few years whilst
delivering a satisfactory experience to our Members, we established
a wholly-owned subsidiary ('UW Home Services') to install smart
meters and to manage other necessary meter works in our Members'
properties.
We are extremely pleased with the further progress made by UW
Home Services, building on the solid foundations reported last
year. We successfully expanded the engineering and logistical
capabilities to provide nationwide coverage, with almost 300
trained engineers achieving a run-rate of over 5,000 smart meter
installations per week during the final quarter of the year. This
programme was suspended in late March in response to the Covid-19
lockdown, and has recently begun a phased return to
installations.
Despite the numerous challenges that continue to hinder the
national smart meter programme, UW Home Services successfully
managed the complex transition from first generation to second
generation ("Smets2") meters, and installed approximately 135,000
(2019: 5,000) largely dual fuel meters during the year. This strong
performance takes the penetration of smart meters within our
residential meter portfolio to just under 50%, comfortably ahead of
the average for the industry as a whole.
We are strongly supportive of the smart meter roll-out
programme, which improves billing accuracy, reduces unbilled energy
losses (a cost which is ultimately borne by all consumers as part
of their charges) and helps customers monitor in real time how much
energy they are using. However, it is likely that Government
support will be needed to remove the right of customers to opt-out
from this programme, if this initiative is to achieve its full
potential for improving customer service, grid management, and
reducing costs for everyone.
Boiler Installation
Our boiler installation business (Glow Green) made good progress
during the year, more than doubling the number of boilers it
installed compared with the previous year. Its financial
performance also improved significantly, with our share of its full
year losses falling to GBP0.5m (2019: GBP0.8m loss) after a strong
second half performance.
Glow Green's performance since the year end has been highly
encouraging, and we look forward to higher volumes, higher revenues
and a positive contribution to group profits for the current
financial year.
Insurance
We continue to make solid progress in building our Home
Insurance book, growing the number of policies by c.45% to around
21,000 (2019: 14,500) over the course of the year, whilst also
adding around 7,000 Boiler and Home Care policies from a standing
start. We are pleased that our 'consistently low price' approach to
setting premiums has led to average renewal rates which comfortably
exceed 90% for our Home Insurance product - a level we understand
is unprecedented for this type of policy.
A key priority for the current year is to continue strengthening
our panel of insurers to make our proposition more competitive
across a wider range of risk profiles, further improving our
quote/conversion ratio.
Whilst still small, our Insurance business is profitable, and we
remain confident it will make a material contribution to the
financial performance of the group in due course.
CashBack
Our CashBack card continues to prove itself as a further point
of differentiation, and an attractive Member acquisition and
retention tool. We believe it is a key factor behind our continuing
organic growth and low churn against a challenging market
background.
It gives Members the opportunity to achieve additional savings
of between 3% and 7% on their shopping at a wide range of
participating retailers, which they receive as an automatic credit
on their next monthly bill from us. During the course of last year
we upgraded existing cardholders onto an enhanced version of the
card, offering Members the additional benefit of earning 1%
CashBack on everyday household shopping at non-participating
retailers.
Technology
We are making good progress on our digital transformation
project to update our systems and processes. Whilst this is
creating significant additional costs in the short term, we are
also starting to see some of the benefits - for example, the
successful transition to home working in response to the recent
Covid-19 lockdown. We anticipate that increasing benefits will
materialise progressively over the coming years.
I remain confident this continuing investment is the right
long-term decision for the business, and that our new technology
platform will support us in providing best in class service levels
to our Members across the increasing range of services we supply,
and delivering the tools and support our Partners need to make the
most of the part time income opportunity we offer.
Our operating costs remain lower than those of any of our peers
on a like-for-like basis, and we look forward to the additional
operating efficiencies and performance improvements which our new
systems are expected to deliver in due course.
Andrew Lindsay MBE
Chief Executive Officer
15 June 2020
Financial Review
Overview of Results
Adjusted Statutory
2020 2019 Change 2020 2019 Change
---------- ---------- ------- ---------- ---------- -------
Revenue GBP875.8m GBP804.4m 8.9% GBP875.8m GBP804.4m 8.9%
Profit before
tax GBP60.8m GBP56.3m 8.0% GBP48.1m GBP43.0m 11.9%
Basic EPS 61.8p 59.0p 4.7% 45.9p 42.5p 8.0%
Dividend per share 57.0p 52.0p 9.6% 57.0p 52.0p 9.6%
In order to provide a clearer presentation of the underlying
performance of the group, adjusted profit before tax and adjusted
basic EPS exclude share incentive scheme charges of GBP1.3m (2019:
GBP1.8m) and the amortisation of the intangible asset of GBP11.2m
(2019: GBP11.2m) arising from entering into the energy supply
arrangements with npower in December 2013; this decision reflects
both the relative size and non-cash nature of these charges. The
reconciliation for adjusted EPS is set out in note 2. As set out in
note 5, FY20 has been prepared under IFRS 16 Leases, FY19 was
prepared under IAS 17 Leases.
Summary
Adjusted profit before tax increased by 8.0% to GBP60.8m (2019:
GBP56.3m) on higher revenues of GBP875.8m (2019: GBP804.4m). The
increase in revenues reflects the larger customer base, seasonally
normal gas consumption (the corresponding period in the prior year
was anomalously mild) and higher energy prices during the period.
The improvement in adjusted pre-tax profit mainly reflects the
organic growth in the number of services we are providing to our
Members and the continued impact from the improved terms agreed
with certain key suppliers, partially offset by continued
investment in staff headcount, and higher technology costs.
Within our Customer Acquisition operating segment, net costs
decreased to GBP17.1m (2019: GBP19.5m), mainly reflecting the
improved commercial terms from our wholesale telephony suppliers
(mainly relating to lower net broadband connection charges),
partially offset by higher commission payments to Partners.
Distribution expenses increased to GBP27.7m (2019: GBP26.0m),
mainly reflecting higher commissions paid to Partners and increased
activity at our boiler installation business ('Glow Green').
Administrative expenses increased during the year by GBP10.8m to
GBP78.7m (2019: GBP67.9m) mainly as a result of higher staff
remuneration costs, greater costs associated with our digital
transformation programme, and expanding our marketing function.
Adjusted earnings per share increased by 4.7% to 61.8p (2019:
59.0p), with statutory EPS increasing by 8.0% to 45.9p (2019:
42.5p). In accordance with previous guidance and our strong cash
position, the Board is proposing to pay a final dividend of 30p per
share (2019: 27p), making a total dividend of 57p per share (2019:
52p) for the year.
Margins
Our overall gross margin for the year was 19.1% (2019: 18.6%)
mainly reflecting the continued impact from the improved terms
agreed with certain key suppliers for the full period.
Customer Management
We continued to grow the number of services we are supplying,
with an increase of 121,000 services (2019: 153,000) during the
course of the year, taking the total number of services provided to
our Members to a little over 2 million (2019: 1.9 million).
The increase in revenues reflects the larger customer base,
seasonally normal gas consumption (versus the anomalously mild
prior year) and higher energy prices during the period:
Revenues GBPm 2020 2019
Electricity 384.2 351.2
Gas 284.8 268.1
Landline and Broadband 125.4 116.5
Mobile 37.4 32.5
Other 23.7 16.6
------ ------
855.5 784.9
Customer Acquisition
Our Customer Acquisition operating segment loss decreased to
GBP17.1m (2019: GBP19.5m), mainly reflecting improved commercial
terms from our wholesale telephony suppliers, partially offset by
higher commission payments to Partners.
Distribution and Administrative Expenses
Distribution expenses include the share of our revenues that we
pay as commission to Partners, together with other direct costs
associated with gathering new Members which are included as part of
the Customer Acquisition Segment result for the year. These rose to
GBP27.7m (2019: GBP26.0m), reflecting higher commissions paid to
Partners and increased activity at Glow Green.
Within administrative expenses, the bad debt charge for the year
increased to GBP10.4m (2019: GBP8.1m) representing 1.2% of revenues
(2019: 1.0%). This reflects a higher proportion of Members with at
least two energy bills outstanding, which rose to 1.76% (2019:
1.50%). This was largely due to ongoing delays in fitting
prepayment meters, caused by a combination of technical limitations
with Smets-2 meters, and disruption to normal warrant processes
prior to, and during the transition to using UW Home Services for
carrying out these works on a nationwide basis. Since lockdown, we
have been unable to fit any warrant-related prepayment meters in
Members' homes, and it is currently unclear when this activity will
recommence.
The number of prepayment meters we installed during the year,
some of which were provided at the Member's own request, remained
flat at 4,310 (2019: 4,209). At the end of the year we had an
installed base of 72,726 (2019: 74,840) prepayment meters,
representing approximately 6.8% of the energy services we supply;
this remains significantly below the average level of prepayment
meters within the industry of around 16% (source: Ofgem). The
investigation into the Group's debt management processes announced
by Ofgem in June 2018 remains ongoing, and any potential exposure
is not considered likely to be material.
Overall, administrative expenses (excluding share incentive
scheme charges and amortisation of the energy supply agreement
intangible) increased during the year by GBP10.8m to GBP78.7m
(2019: GBP67.9m) mainly as a result of higher staff costs, higher
bad debts and increased technology costs. The increase in staff
costs reflects our underlying growth in the number and range of
services we supply, and the investment in strengthening our
technology resources, regulatory functions and management
structure, together with increased activity during the period at
Glow Green and our meter operator UW Home Services.
Cash, Capital Expenditure, Working Capital and Borrowings
In January 2020 we agreed new GBP150 million borrowing
facilities with Barclays Bank PLC, Lloyds Bank PLC and Bank of
Ireland Group PLC for the period to 17 January 2023, with an option
(subject to bank consent) to extend for up to a further two
years.
We ended the period with a net debt position of GBP59.4m
including lease liabilities of GBP9.0m (of which GBP3.4m relates to
the new accounting standard on leases IFRS 16 which applied from
the beginning of the period) (2019: GBP37.0m including lease
liabilities of GBP1.6m). The underlying increase mainly reflects
the success of our Quick Income Plan for Partners, capital
expenditure on the digital transformation programme, the growth of
our own meter operator (UW Home Services) and the changes to the
corporation tax quarterly instalment regime. The Group's Net
Debt/adjusted EBITDA ratio remains low at around 0.9x (adjusted
EBITDA of GBP69.2m used in this ratio represents adjusted pre-tax
profit of GBP60.8m (see table above) plus depreciation and
amortisation of fixed assets of GBP6.3m and net interest costs of
GBP2.1m).
Our net working capital position showed a reduced year on year
cash outflow of GBP13.3m (2019: cash outflow of GBP22.3m); this
outflow primarily reflects the continuing success of the Quick
Income Plan for Partners and the investment made in supplying
higher quality broadband routers to customers. Capital expenditure
of GBP10.3m (2019: GBP7.5m) related primarily to our continuing
digital transformation programme.
Under the terms of our energy supply arrangements, the npower
billing profile to the Group broadly equates to our customer
billing profile, which helps to reduce the amount of working
capital we need.
Dividend
The final dividend of 30p per share (2019: 27p) will be paid on
31 July 2020 to shareholders on the register at the close of
business on 10 July 2020 and is subject to approval by shareholders
at the Company's Annual General Meeting which will be held on 23
July 2020. This makes a total dividend payable for the year of 57p
(2019: 52p), an increase of 9.6% compared with the previous
year.
Our intention going forward remains to achieve a dividend
pay-out ratio of around 85% of adjusted EPS over the medium-term,
whilst maintaining our long-standing progressive dividend policy.
Consistent with this approach, and reflecting the profit guidance
we have provided, we expect to maintain our dividend at 57p per
share for FY21, subject to any impact from Covid-19.
Share Incentive Scheme Charges
Operating profit is stated after share incentive scheme charges
of GBP1.3m (2019: GBP1.8m). These relate to an accounting charge
under IFRS 2 Share Based Payments ('IFRS 2').
As a result of the relative size of share incentive scheme
charges as a proportion of our pre-tax profits, and the
fluctuations in the amount of this charge from one year to another,
we are separately disclosing this amount within the Consolidated
Statement of Comprehensive Income for the period (and excluding
these charges from our calculation of adjusted profits and
earnings) so that the underlying performance of the business can be
clearly identified. Our current adjusted earnings per share have
also therefore been adjusted to eliminate these share incentive
scheme charges.
Taxation
A full analysis of the taxation charge for the year is set out
in note 4 to the financial statements in the Annual Report. The tax
charge for the year is GBP12.4m (2019: GBP10.2m).
The effective tax rate for the year was 25.7% (2019: 23.7%),
this remains higher than the underlying rate of corporation tax due
mainly to the ongoing amortisation charge on our energy supply
contract intangible asset (which is not an allowable deduction for
tax purposes), and a reduction in the deferred tax asset associated
with unexercised employee share options.
Nick Schoenfeld
Chief Financial Officer
15 June 2020
Principal Risks and Uncertainties
Background
The Group faces various risk factors, both internal and
external, which could have a material impact on long-term
performance. However, the Group's underlying business model is
considered relatively low-risk, with no need for management to take
any disproportionate risks in order to preserve or generate
shareholder value.
The Group continues to develop and operate a consistent and
systematic risk management process, which involves risk ranking,
prioritisation and subsequent evaluation, with a view to ensuring
all significant risks have been identified, prioritised and (where
possible) eliminated, and that systems of control are in place to
manage any remaining risks.
The directors have carried out a robust assessment of the
Company's emerging and principal risks. A formal document is
prepared by the executive directors and senior management team on a
regular basis detailing the key risks faced by the Group and the
operational controls in place to mitigate those risks; this
document is then reviewed by the Audit Committee. A new principal
risk associated with the recent outbreak of the Coronavirus has
been identified and is detailed below. No other new principal risks
have been identified during the period, and save as set out below,
nor has the magnitude of any risks previously identified
significantly changed during the period.
Business model
The principal risks outlined below should be viewed in the
context of the Group's business model as a reseller of utility
services (gas, electricity, fixed line telephony, mobile telephony,
broadband and insurance services) under the Utility Warehouse and
TML brands. As a reseller, the Group does not own any of the
network infrastructure required to deliver these services to its
membership base. This means that while the Group is heavily reliant
on third party providers, it is insulated from all the direct risks
associated with owning and/or operating such capital-intensive
infrastructure itself.
The Group's services are promoted using 'word of mouth' by a
large network of independent Partners, who are paid predominantly
on a commission basis. This means that the Group has limited fixed
costs associated with acquiring new Members.
The principal specific risks arising from the Group's business
model, and the measures taken to mitigate those risks, are set out
below.
Reputational risk
The Group's reputation amongst its Members, suppliers and
Partners is believed to be fundamental to the future success of the
Group. Failure to meet expectations in terms of the services
provided by the Group, the way the Group does business or in the
Group's financial performance could have a material negative impact
on the Group's performance.
In developing new services, and in enhancing current ones,
careful consideration is given to the likely impact of such changes
on existing Members.
In relation to the service provided to its membership base,
reputational risk is principally mitigated through the Group's
recruitment processes, a focus on closely monitoring staff
performance, including the use of direct feedback surveys from
Members (Net Promoter Score), and through the provision of rigorous
staff training.
Responsibility for maintaining effective relationships with
suppliers and Partners rests primarily with the appropriate member
of the Group's senior management team with responsibility for the
relevant area. Any material changes to supplier agreements and
Partner commission arrangements which could impact the Group's
relationships are generally negotiated by the executive Directors
and ultimately approved by the full Board.
Information technology risk
The Group is reliant on its in-house developed and supported
systems for the successful operation of its business model. Any
failure in the operation of these systems could negatively impact
service to Members, undermine Partner confidence, and potentially
be damaging to the Group's brand. Application software is developed
and maintained by the Group's Technology team to support the
changing needs of the business using the best 'fit for purpose'
tools and infrastructure. The Technology team is made up of
highly-skilled, motivated and experienced individuals.
Changes made to the systems are prioritised by business, Product
Managers work with their stakeholders to refine application and
systems requirements. They work with the Technology teams
undertaking the change to ensure a proper understanding and
successful outcome. Changes are tested as extensively as reasonably
practicable before deployment. Review and testing are carried out
at various stages of the development by both the Technology team
and the operational department who ultimately take ownership of the
system.
The Group has strategic control over the core Member and Partner
platforms including the software development frameworks and source
code behind these key applications. The Group also uses strategic
third-party vendors to deliver solutions outside of our core
competency. This largely restricts our counterparty risks to
services that can be replaced with alternative vendors if required,
albeit this could lead to temporary disruption to the day-to-day
operations of the business.
Monitoring, backing up and restoring of the software and
underlying data are made on a regular basis. Backups are securely
stored or replicated to different locations. Disaster recovery
facilities are either provided through cloud-based infrastructure
as a service, in critical cases maintained in a warm standby or
active-active state to mitigate risk in the event of a failure of
the production systems.
Data security risk
The Group processes sensitive personal and commercial data and
in doing so is required by law to protect customer and corporate
information and data, as well as to keep its infrastructure secure.
A breach of security could result in the Group facing prosecution
and fines as well as loss of business from damage to the Group's
reputation. Recovery could be hampered due to any extended period
necessary to identify and recover a loss of sensitive information
and financial losses could arise from fraud and theft. Unplanned
costs could be incurred to restore the Group's security.
The Group has deployed a robust and industry appropriate
Group-wide layered security strategy, providing effective control
to mitigate the relevant threats and risks. External consultants
conduct regular penetration testing of the Group's internal and
external systems and network infrastructure.
The Information Commissioner's Office ('ICO') upholds
information rights in the public interest and the Group is a data
controller registered with the ICO. If the Group fails to comply
with all the relevant legislation and industry specific regulations
concerning data protection and information security, it could be
subject to enforcement action, significant fines and the potential
loss of its operating licence.
Information security risks are overseen by the Group's
Information Security and Legal and Compliance team.
Legislative and regulatory risk
The Group is subject to varying laws and regulations. The energy
and communications markets in the UK are subject to comprehensive
operating requirements as defined by the relevant sector regulators
and/or government departments. Amendments to the regulatory regime
could have an impact on the Group's ability to achieve its
financial goals and any failure to comply may result in the Group
being fined and lead to reputational damage which could impact the
Group's brand. Furthermore, the Group is obliged to comply with
retail supply procedures, amendments to which could have an impact
on operating costs.
The Group is a licensed gas and electricity supplier, and
therefore has a direct regulatory relationship with Ofgem. If the
Group fails to comply with its licence obligations, it could be
subject to fines or to the removal of its respective licences.
Further regulatory changes relating to retail energy price caps,
faster switching, the rollout programme of smart energy meters, and
the development of existing environmental and social policies,
could all have a potentially significant impact on the sector, and
the net profit margins available to energy suppliers.
The Group is also a licensed supplier of telephony services and
therefore has a direct regulatory relationship with Ofcom. If the
Group fails to comply with its licence obligations, it could be
subject to fines or to the removal of its licences. Regulatory
changes relating to the European Electronic Communications Code
could have an impact on the telephony sector with increased
regulatory burden and on the Group's product offering.
The Group is an Appointed Representative of a Financial Conduct
Authority ('FCA') authorised and regulated insurance broker for the
purposes of providing insurance services to Members. If the Group
fails to comply with FCA regulations, it could be indirectly
exposed to fines and risk losing its status as an Appointed
Representative severely restricting its ability to offer insurance
services to Members.
In general, the majority of the Group's services are supplied
into highly regulated markets, and this could restrict the
operational flexibility of the Group's business. In order to
mitigate this risk, the Group seeks to maintain appropriate
relations with both Ofgem and Ofcom (the UK regulators for the
energy and communications markets respectively), the Department for
Business, Energy and Industrial Strategy ('BEIS'), and the FCA. The
Group engages with officials from all these organisations on a
periodic basis to ensure they are aware of the Group's views when
they are consulting on proposed regulatory changes or if there are
competition issues the Group needs to raise with them. An
investigation into the Group's debt management processes announced
by Ofgem in June 2018 remains ongoing, and any potential exposure
is not considered likely to be material.
It should be noted that the regulatory environment for the
various markets in which the Group operates is generally focussed
on promoting competition; it therefore seems reasonable to expect
that most potential changes will broadly be beneficial to the
Group, given the Group's relatively small size compared to the
former monopoly incumbents with whom it competes. However, these
changes and their actual impact will always remain uncertain and
could include, in extremis, the re-nationalisation of the energy
supply industry.
Political and consumer concern over energy prices, vulnerable
customers and fuel poverty may lead to further reviews of the
energy market which could result in further consumer protection
legislation being introduced through energy supply licences with
price controls for certain customer segments currently being
proposed. In addition, political and regulatory developments
affecting the energy and telecoms markets within which the Group
operates may have a material adverse effect on the Group's
business, results of operations and overall financial
condition.
Financing risk
The Group has debt service obligations which may place operating
and financial restrictions on the Group. This debt could have
adverse consequences insofar as it: (a) requires the Group to
dedicate a proportion of its cash flows from operations to fund
payments in respect of the debt, thereby reducing the flexibility
of the Group to utilise its cash to invest in and/or grow the
business; (b) increases the Group's vulnerability to adverse
general economic and/or industry conditions; (c) may limit the
Group's flexibility in planning for, or reacting to, changes in its
business or the industry in which it operates; (d) may limit the
Group's ability to raise additional debt in the long-term; and (e)
could restrict the Group from making larger strategic acquisitions
or exploiting business opportunities.
Each of these prospective adverse consequences (or a combination
of some or all of them) could result in the potential growth of the
Group being at a slower rate than may otherwise be achieved.
Fraud and bad debt risk
The Group has a universal supply obligation in relation to the
provision of energy to domestic customers. This means that although
the Group is entitled to request a reasonable deposit from
potential new Members who are not considered creditworthy, the
Group is obliged to supply domestic energy to everyone who submits
a properly completed application form. Where Members subsequently
fail to pay for the energy they have used, there is likely to be a
considerable delay before the Group is able to control its exposure
to future bad debt from them by either switching their smart meters
to pre-payment mode, installing a pre-payment meter or
disconnecting their supply, and the costs associated with
preventing such Members from increasing their indebtedness are not
always fully recovered.
Fraud and bad debt within the telephony industry may arise from
Members using the services, or being provided with a mobile
handset, without intending to pay their supplier. The amounts
involved are generally relatively small as the Group has
sophisticated call traffic monitoring systems to identify material
occurrences of usage fraud. The Group is able to immediately
eliminate any further usage bad debt exposure by disconnecting any
telephony service that demonstrates a suspicious usage profile, or
falls into arrears on payments.
More generally, the Group is also exposed to payment card fraud,
where Members use stolen cards to obtain credit (e.g. on their
CashBack card) or goods (e.g. Smartphones) from the Group; the
Group regularly reviews and refines its fraud protection systems to
reduce its potential exposure to such risks.
Wholesale price risk
The Group does not own or operate any utility network
infrastructure itself, choosing instead to purchase the capacity
needed from third parties. The advantage of this approach is that
the Group is largely protected from technological risk, capacity
risk or the risk of obsolescence, as it can purchase the amount of
each service required to meet its Members' needs.
Whilst there is a theoretical risk that in some of the areas in
which the Group operates it may be unable to secure access to the
necessary infrastructure on commercially attractive terms, in
practice the pricing of access to such infrastructure is typically
either regulated (as in the energy market) or subject to
significant competitive pressures (as in telephony and broadband).
The profile of the Group's Members, the significant quantities of
each service they consume in aggregate, and the Group's clearly
differentiated route to market has historically proven attractive
to infrastructure owners, who compete aggressively to secure a
share of the Group's growing business.
The supply of energy has different risks associated with it. The
wholesale price can be extremely volatile, and Member demand can be
subject to considerable short-term fluctuations depending on the
weather. The Group has a long-standing supply relationship with
npower under which the latter assumes the substantive risks and
rewards of buying and hedging energy for the Group's Members, and
where the price paid by the Group to cover commodity, balancing,
transportation, distribution, agreed metering, regulatory and
certain other associated supply costs is set by reference to the
average of the standard variable tariffs charged by the 'Big 6' to
their domestic customers less an agreed discount, which is set at
the start of each quarter; this may not be competitive against the
equivalent supply costs incurred by new and/or other independent
suppliers. In addition, the timing of any quarterly price changes
under the npower arrangement may not align with changes in retail
prices, creating temporary short-term fluctuations in the
underlying margins earned by the Group from supplying energy.
However, if the Group did not have the benefit of this long-term
supply agreement it would need to find alternative means of
protecting itself from the pricing risk of securing access to the
necessary energy on the open market and the costs of balancing.
Competitive risk
The Group operates in highly competitive markets and significant
service innovations or increased price competition could impact
future profit margins. In order to maintain its competitive
position, there is a consistent focus on ways of improving
operational efficiency. New service innovations are monitored
closely by senior management and the Group is generally able to
respond within an acceptable timeframe by offering any new services
using the infrastructure of its existing suppliers. The increasing
proportion of Members who are benefiting from the genuinely unique
multi-utility solution that is offered by the Group, and which is
unavailable from any other known supplier, is considered likely to
materially reduce any competitive threat.
The Directors anticipate that the Group will face continued
competition in the future as new companies enter the market and
alternative technologies and services become available. The Group's
services and expertise may be rendered obsolete or uneconomic by
technological advances or novel approaches developed by one or more
of the Group's competitors. In the event that smaller independent
energy suppliers were to experience financial difficulties as a
result of increasing wholesale prices for instance, it is possible
that customers could also have a loss of confidence in the Group,
given that it is also an independent energy supplier. The existing
approaches of the Group's competitors or new approaches or
technologies developed by such competitors may be more effective or
affordable than those available to the Group. There can be no
assurance that the Group will be able to compete successfully with
existing or potential competitors or that competitive factors will
not have a material adverse effect on the Group's business,
financial condition or results of operations. However, as the
Group's membership base continues to rise, competition amongst
suppliers of services to the Group is expected to increase. This
has already been evidenced by various volume-related growth
incentives which have been agreed with some of the Group's largest
wholesale suppliers. This should also ensure that the Group has
direct access to new technologies and services available to the
market.
Infrastructure risk
The provision of services to the Group's Members is reliant on
the efficient operation of third party physical infrastructure.
There is a risk of disruption to the supply of services to Members
through any failure in the infrastructure e.g. gas shortages, power
cuts or damage to communications networks. However, as the
infrastructure is generally shared with other suppliers, any
material disruption to the supply of services is likely to impact a
large part of the market as a whole and it is unlikely that the
Group would be disproportionately affected. In the event of any
prolonged disruption isolated to the Group's principal supplier
within a particular market, services required by Members could in
due course be sourced from another provider.
The development of localised energy generation and distribution
technology may lead to increased peer-to-peer energy trading,
thereby reducing the volume of energy provided by nationwide
suppliers. As a nationwide retail supplier, the Group's results
from the sale of energy could therefore be adversely affected.
Similarly, the construction of 'local monopoly' fibre telephony
networks to which the Group's access may be limited as a reseller
could restrict the Group's ability to compete effectively for
customers in certain areas.
Smart meter rollout risk
The Group is in part reliant on third party suppliers to deliver
its smart meter rollout programme effectively. In the event that
the Group suffers delays to its smart meter rollout programme the
Group may be in breach of its regulatory obligations and therefore
become subject to fines from Ofgem. In order to mitigate this risk
the Group regularly monitors the performance of suppliers and
addresses any issues as they arise.
The Group may also be indirectly exposed to reputational damage
and litigation from the risk of technical complications arising
from the installation of smart meters or other acts or omissions of
meter operators, e.g. the escape of gas in a Member's property
causing injury or death. The Group has mitigated this risk through
using reputable third-party meter operators and through the
establishment of the Group's own meter operator UW Home Services
Limited.
Energy industry estimation risk
A significant degree of estimation is required in order to
determine the actual level of energy used by Members and hence that
should be recognised by the Group as sales. There is an inherent
risk that the estimation routines used by the Group do not in all
instances fully reflect the actual usage of Members. However, this
risk is mitigated by the relatively high proportion of Members who
provide meter readings on a periodic basis, and the rapid
anticipated growth in the installed base of smart meters resulting
from the national rollout programme.
Gas leakage within the national gas distribution network
The operational management of the national gas distribution
network is outside the control of the Group, and in common with all
other licensed domestic gas suppliers the Group is responsible for
meeting its pro-rata share of the total leakage cost. There is a
risk that the level of leakage in future could be higher than
historically experienced, and above the level currently
expected.
Key man risk
The Group is dependent on its key management for the successful
development and operation of its business. In the event that any or
all of the members of the key management team were to leave the
business, it could have a material adverse effect on the Group's
operations. The Group seeks to mitigate this risk through its
remuneration policy.
Single site risk
The Group operates from one principal site and, in the event of
significant damage to that site through fire or other issues, the
operations of the Group could be adversely affected. In order to
mitigate, where possible, the impact of this risk the Group has in
place appropriate disaster recovery arrangements.
Acquisition risk
The Group may invest in other businesses, taking a minority,
majority or 100% equity shareholding, or through a joint venture
partnership. Such investments may not deliver the anticipated
returns, and may require additional funding in future. This risk is
mitigated through conducting appropriate pre-acquisition due
diligence where relevant.
UK withdrawal from the EU risk
The Directors do not anticipate that, as a UK centric business
supplying core household services (where any increases in costs
tend to be passed through into retail prices), the UK's withdrawal
from the EU ("Brexit") will have any material negative impact on
the Group's earnings or growth. It is not expected that Brexit will
have a significant impact on the security of supply of the services
the Group provides given its arrangements with key suppliers.
It is possible that if Brexit has a meaningful negative impact
on the UK economy in the short term, certain consumers may face
temporary hardship. However, as a supplier of essential
non-discretionary household services to a large and diverse
customer base, it is not expected that this will have a material
overall impact on the Company's sales levels and exposure to credit
risk. Nonetheless the situation is being kept under review.
Virus outbreak risk
In the absence of a vaccine or effective treatment, the Company
faces a number of risks from any highly infectious virus or disease
which causes serious incapacity amongst those infected, including:
(i) staff may be unable to attend their normal place of work and
fulfil their normal duties due to falling ill or being required to
self-isolate (either due to exposure to carriers of the virus, or
to reduce the likelihood of being so exposed); (ii) the Company may
be required to shut Network HQ to prevent transmission of the virus
in the workplace; (iii) the efficiency of our operations may be
reduced; (iv) we may be unable to recruit and train new members of
staff; (v) customers may find it more difficult to contact the
company (vi) we may be unable to resolve faults and challenges
faced by customers which require a visit to their home or other
engineering works to be carried out (vii) customers may stop paying
their bills, or we may be required by the Government to offer
payment holidays to customers in respect of their utilities (in a
similar fashion to the mortgage payment provisions), putting
pressure on the Company's working capital; (viii) we may be
restricted from carrying out normal debt enforcement procedures
including suspension of telephony services and installation of
smart meters; (ix) the Company's Partners may find it more
difficult to grow their businesses during a period when
restrictions on movement are imposed by the Government; (x) we may
be unable to visit customers' homes to install smart meters and/or
our free lightbulb replacement service; (xi) the various providers
of third party infrastructure used to supply our services may be
unable to cope with the increased demands placed upon them; and
(xii) churn could increase during periods when customers are
isolated at home.
These are mitigated by: (i) the Company has proven technology to
enable most employees to carry out their duties remotely; (ii) the
demographic mix of our customer base is heavily skewed towards
homeowners and older/retired Members; this means we are
significantly less exposed to payment issues than most other
providers of similar services; (iii) the Company has a strong
balance sheet with modest gearing, and access to significant,
recently refinanced, additional debt facilities (if required) to
cover any temporary pressure on working capital; in extremis, these
could be enhanced by a temporary suspension of the dividend; (iv)
the Company has developed tools which are now in widespread use,
enabling Partners to sign-up new customers, recruit new Partners,
and to help existing Partners support new Partners remotely to
teach them how to build their own successful UW business; and (v)
the wide range of services provided to Members gives us significant
resilience from a revenue and profit perspective against an
external event which affects any individual revenue stream.
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2020
Note 2020 2019
GBP'000 GBP'000
Revenue 1 875,774 804,438
Cost of sales (708,077) (654,874)
---------- ----------
Gross profit 167,697 149,564
Distribution expenses (27,662) (25,981)
Share incentive scheme credits/(charges) 1 (10)
--------------------------------------------------- ------- ---------- ----------
Total distribution expenses (27,661) (25,991)
Administrative expenses (78,683) (67,916)
Share incentive scheme charges (1,285) (1,772)
Amortisation of energy supply contract
intangible (11,228) (11,228)
--------------------------------------------------- ------- ---------- ----------
Total administrative expenses (91,196) (80,916)
Other income 1,328 1,656
---------- ----------
Operating profit 1 50,168 44,313
Financial income 280 206
Financial expenses (2,336) (1,520)
---------- ----------
Net financial expense (2,056) (1,314)
Profit before taxation 48,112 42,999
Taxation (12,352) (10,174)
Profit for period 35,760 32,825
Profit and other comprehensive income for
the year attributable to owners of the
parent 35,911 33,103
Loss for the year attributable to non-controlling
interest (151) (278)
Profit for the period 35,760 32,825
---------- ----------
Basic earnings per share 2 45.9p 42.5p
---------- ----------
Diluted earnings per share 2 45.7p 42.3p
---------- ----------
Consolidated Balance Sheet
As at 31 March 2020
2020 2019
Assets GBP'000 GBP'000
Non-current assets
Property, plant and equipment 37,767 30,579
Investment property 8,432 8,621
Intangible assets 167,719 173,655
Goodwill 5,324 5,324
Other non-current assets 25,185 19,052
--------- ---------
Total non-current assets 244,427 237,231
--------- ---------
Current assets
Inventories 4,633 4,781
Trade and other receivables 57,718 48,450
Prepayments and accrued income 132,270 119,190
Cash 43,611 24,166
--------- ---------
Total current assets 238,232 196,587
--------- ---------
Total assets 482,659 433,818
--------- ---------
Current liabilities
Trade and other payables (35,291) (31,064)
Current tax payable - (5,065)
Accrued expenses and deferred income (121,323) (111,386)
--------- ---------
Total current liabilities (156,614) (147,515)
--------- ---------
Non-current liabilities
Long term borrowings (94,020) (59,598)
Lease liabilities (8,969) (1,616)
Deferred tax (1,104) -
Total non-current liabilities (104,093) (61,214)
Total assets less total liabilities 221,952 225,089
--------- ---------
Equity
Share capital 3,962 3,950
Share premium 143,896 141,732
Capital redemption reserve 107 107
Treasury shares (5,502) (5,502)
JSOP reserve (1,150) (1,150)
Retained earnings 81,068 86,230
Non-controlling interest (429) (278)
--------- ---------
Total equity 221,952 225,089
--------- ---------
Consolidated Cash Flow Statement
For the year ended 31 March 2020
2020 2019
GBP'000 GBP'000
Operating activities
Profit before taxation 48,112 42,999
Adjustments for:
Net financial expense 2,056 1,314
Depreciation of property, plant and equipment 4,142 3,100
(Profit)/loss on disposal of fixed assets (51) 1
Amortisation of intangible assets 13,345 12,509
Amortisation of debt arrangement fees 491 229
Decrease in inventories 148 1,320
Increase in trade and other receivables (27,821) (5,695)
Increase/(decrease) in trade and other payables 14,410 (23,457)
Non-cash adjustments arising from IFRSs 9 and
15 - 6,348
Non-cash adjustments arising from acquisitions - (834)
Share incentive scheme charges 1,284 1,783
Corporation tax paid (17,097) (12,148)
--------- --------
Net cash flow from operating activities 39,019 27,469
--------- --------
Investing activities
Purchase of property, plant and equipment (2,910) (2,495)
Purchase of intangible assets (7,409) (5,054)
Disposal of property, plant and equipment 87 5
Purchase of shares in subsidiaries acquired
(net of cash acquired) - (709)
Interest received 295 167
Cash flow from investing activities (9,937) (8,086)
--------- --------
Financing activities
Dividends paid (42,214) (39,739)
Interest paid (2,582) (1,310)
Drawdown of long term borrowing facilities 145,000 20,000
Repayment of long term borrowing facilities (110,000) -
Fees associated with borrowing facilities (1,069) -
Repayment of lease liabilities (948) (274)
Issue of new B shares in subsidiary - 1
Issue of new ordinary shares 2,176 2,696
Purchase of own shares - (4,742)
Cash flow from financing activities (9,637) (23,368)
--------- --------
Increase/(decrease) in cash and cash equivalents 19,445 (3,985)
Net cash and cash equivalents at the beginning
of the year 24,166 28,151
Net cash and cash equivalents at the year end 43,611 24,166
--------- --------
Consolidated Statement of Changes in Equity
For the year ended 31 March 2020
Capital Non-controlling
Share Share redemption Treasury JSOP Retained interest
capital premium reserve shares reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April
2018 3,930 139,055 107 (760) (1,150) 90,901 - 232,083
Profit and total
comprehensive income - - - - - 33,103 (278) 32,825
Dividends - - - - - (39,739) - (39,739)
Credit arising on
share options - - - - - 1,783 - 1,783
Deferred tax on share
options - - - - - 182 - 182
Issue of new ordinary
shares 19 2,677 - - - - - 2,696
Issue of B shares
in subsidiary 1 - - - - - - 1
Purchase of cancelled
shares - - - (4,742) - - - (4,742)
Balance at 31 March
2019 3,950 141,732 107 (5,502) (1,150) 86,230 (278) 225,089
-------- -------- ----------- ---------- --------- --------- --------------- --------
Balance at 1 April
2019 3,950 141,732 107 (5,502) (1,150) 86,230 (278) 225,089
Opening balance
adjustments - - - - - (26) - (26)
Revised opening balances 3,950 141,732 107 (5,502) (1,150) 86,204 (278) 225,063
-------- -------- ----------- ---------- --------- --------- --------------- --------
Profit and total
comprehensive income - - - - - 35,911 (151) 35,760
Dividends - - - - - (42,214) - (42,214)
Credit arising on
share options - - - - - 1,284 - 1,284
Deferred tax on share
options - - - - - (125) - (125)
Retained earnings
tax adjustments - - - - - 8 - 8
Issue of new ordinary
shares 12 2,164 - - - - - 2,176
Balance at 31 March
2020 3,962 143,896 107 (5,502) (1,150) 81,068 (429) 221,952
-------- -------- ----------- ---------- --------- --------- --------------- --------
Notes
1. Segment reporting
The Group's reportable segments reflect the two distinct
activities around which the Group is organised:
-- Customer Acquisition; and
-- Customer Management.
Customer Acquisition revenues mainly comprise sales of equipment
including mobile phone handsets and wireless internet routers to
customers. Customer Management revenues are principally derived
from the supply of fixed telephony, mobile telephony, gas,
electricity, internet services, home insurance and boiler
installation services to residential and small business
customers.
The Board measures the performance of its operating segments
based on revenue and segment result, which is referred to as
operating profit. The Group applies the same significant accounting
policies across both operating segments.
Operating segments
Year ended 31 March 2020 Year ended 31 March 2019
Customer Customer Customer Customer
Management Acquisition Total Management Acquisition Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 855,529 20,245 875,774 784,973 19,465 804,438
----------- ------------ --------- ----------- ------------ ---------
Segment result 67,317 (17,149) 50,168 63,862 (19,549) 44,313
----------- ------------ --------- ----------- ------------ ---------
Operating profit 50,168 44,313
Net financing expense (2,056) (1,314)
Profit before taxation 48,112 42,999
Taxation (12,352) (10,174)
--------- ---------
Profit for the period 35,760 32,825
--------- ---------
Segment assets 466,468 16,191 482,659 421,312 12,506 433,818
Total assets 466,468 16,191 482,659 421,312 12,506 433,818
Segment liabilities (257,424) (3,283) (260,707) (205,558) (3,171) (208,729)
--------- ---------
Net assets 221,952 225,089
--------- ---------
Capital expenditure (10,077) (242) (10,319) (7,365) (184) (7,549)
Depreciation 4,045 97 4,142 3,024 76 3,100
Amortisation 13,345 - 13,345 12,509 - 12,509
----------- ------------ --------- ----------- ------------ ---------
Statutory operating profit is stated after deducting share
incentive scheme charges (GBP1.3m) and the amortisation of the
energy supply contract intangible asset (GBP11.2m).
Revenue by service
2020 2019
GBP'000 GBP'000
Customer Management
* Electricity 384,246 351,197
* Gas 284,748 268,140
* Fixed communications 125,394 116,522
* Mobile 37,393 32,477
* Other 23,748 16,637
------- -------
855,529 784,973
Customer Acquisition 20,245 19,465
875,774 804,438
------- -------
The Group operates solely in the United Kingdom.
2. Earnings per share
The calculation of basic and diluted earnings per share ("EPS")
is based on the following data:
2020 2019
GBP'000 GBP'000
Earnings for the purpose of basic and
diluted EPS 35,911 33,103
Share incentive scheme charges (net of
tax) 1,203 1,649
Amortisation of energy supply contract
intangible assets 11,228 11,228
--------- ---------
Earnings excluding share incentive scheme
charges and amortisation of intangibles
for the purpose of adjusted basic and
diluted EPS 48,342 45,980
--------- ---------
Number Number
('000s) ('000s)
Weighted average number of ordinary shares
for the purpose of basic EPS 78,205 77,975
Effect of dilutive potential ordinary
shares (share incentive awards) 401 335
--------- ---------
Weighted average number of ordinary shares
for the purpose of diluted EPS 78,606 78,310
Adjusted basic EPS 61.8p 59.0p
Basic EPS 45.9p 42.5p
Adjusted diluted EPS1 61.5p 58.7p
Diluted EPS 45.7p 42.3p
It has been deemed appropriate to present the analysis of
adjusted EPS excluding share incentive scheme charges due to the
relative size and historical volatility of the charges. In view of
the size and nature of the charge as a non-cash item the
amortisation of intangible assets arising from the energy supply
agreement with npower has also been adjusted.
3. Dividends
2020 2019
GBP'000 GBP'000
Prior year final paid 27p (2019: 26p) per
share 21,100 20,257
Interim paid 27p (2019: 25p) per share 21,114 19,482
-------- --------
The Directors have proposed a final dividend of 30p per ordinary
share totalling approximately GBP23.6 million, payable on 31 July
2020, to shareholders on the register at the close of business on
10 July 2020. In accordance with the Group's accounting policies
the dividend has not been included as a liability as at 31 March
2020. This dividend will be subject to income tax at each
recipient's individual marginal income tax rate.
4. Related parties
Identity of related parties
The Company has related party relationships with its
subsidiaries and with its directors and executive officers. Related
party transactions are conducted on an arm's length basis.
Transactions with key management personnel
Directors of the Company and their immediate relatives control
approximately 23.8% of the voting shares of the Company. No other
employees are considered to meet the definition of key management
personnel other than those disclosed in the Directors' Remuneration
Report in the Annual Report.
Details of the total remuneration paid to the directors of the
Company as key management personnel for qualifying services are set
out below:
2020 2019
GBP'000 GBP'000
Short-term employee benefits 1,765 1,729
Social security costs 233 228
Post-employment benefits 20 20
2,018 1,977
Share incentive scheme charges 56 86
------- -------
2,074 2,063
------- -------
During the year, the Group acquired goods and services worth
GBP367 (2019: GBP25,000) from companies in which directors have a
beneficial interest. No amounts were owed to these companies by the
Group as at 31 March 2020. During the year, the Group sold goods
and services worth GBPNil (2019: GBPNil) to companies in which
directors have a beneficial interest.
During the year directors purchased goods and services on behalf
of the Group worth approximately GBP835,000 (2019: GBP755,000). The
directors were fully reimbursed for the purchases and no amounts
were owing to the directors by the Group as at 31 March 2020.
During the year the directors purchased goods and services from the
Group worth approximately GBP29,000 (2019: GBP29,000) and persons
closely connected with the directors earned commissions as Partners
for the Group of approximately GBP7,000 (2019: GBP10,000).
Subsidiary companies
During the year ended 31 March 2020, the Company purchased goods
and services from the subsidiaries in the amount of GBP102,000
(2019: GBP171 ,000 purchased by the Company from the
subsidiaries).
During the year ended 31 March 2020 the Company also received
distributions from subsidiaries of GBP50,000,000 (2019:
GBP30,000,000). At 31 March 2020 the Company owed the subsidiaries
GBP67,348,000 which is recognised within trade payables (2019:
GBP76,197,000 owed by the Company to the subsidiaries).
5. Financial reporting standards applied for the first time in
current year
Background
IFRS 16 (Leases) was applied for the first time as of 1 April
2019. The effects resulting from the first-time application are
detailed in this section. Details of the nature of the expected
impact of IFRS 16 was set out on pages 103 to 104 of the Company's
Annual Report for the year ended 31 March 2019.
The Company has decided to apply IFRS 16 in modified form
retrospectively for the first time as at 1 April 2019, without
restating the prior-year figures, accounting for the aggregate
amount of any transition effects by way of an adjustment to equity
and presenting the comparative period in line with previous
standards.
The effect that the first-time application of IFRS 16 had on
retained earnings and other comprehensive income in the statement
of comprehensive income in the current period are detailed in the
tables below.
Retained earnings reconciliation IFRS 16
GBP'000 GBP'000
Retained earnings as at 31 March 2019 86,230
--------
Effects of IFRS 16 (26)
of which increase in accumulated depreciation costs (330)
of which increase in accumulated interest costs (59)
of which decrease in accumulated property lease rental
costs 363
Retained earnings as at 1 April 2019 86,204
--------
Impact of IFRS 16 on the Balance Sheet as at 31 March 2020
As at Changes As at
31 March in recognition 31 March
2020 2020
Before accounting After accounting
changes changes
GBP'000 GBP'000 GBP'000
Property, plant and equipment 34,393 3,374 37,767
Lease liabilities (5,539) (3,430) (8,969)
Retained earnings 81,124 (56) 81,068
Impact of IFRS 16 on the Statement of Comprehensive Income for
the year ended 31 March 2020
Year Changes Year
ended in recognition ended
31 March 2020 31 March
2020
Before accounting After accounting
changes changes
GBP'000 GBP'000 GBP'000
Depreciation (3,700) (442) (4,142)
Interest costs (2,263) (73) (2,336)
Property lease rental costs (485) 485 -
Reconciliation of finance lease liabilities to operating lease
commitments
A reconciliation of the operating lease commitments as at 31
March 2019 set out in note 17 of the Annual Report 2019 to the
opening finance lease liabilities under IFRS 16 as at 1 April 2019
is set out below:
GBP'000 GBP'000
Operating lease commitments as at 31 March 2019 3,938
--------
Effects of IFRS 16 (96)
of which discounting (447)
of which other adjustments 351
Lease liabilities under IFRS 16 as at 1 April 2019 3,842
--------
Summary of accounting policy changes - IFRS 16
The adoption of IFRS 16 has resulted in several operating leases
relating to property being recognised on the balance sheet, as the
distinction between operating and finance leases has been
removed.
The Group has recognised right-of-use assets representing its
right to use underlying assets, and corresponding lease liabilities
representing its obligation to make lease payments. Right-of-use
assets have been valued as equal to lease liabilities. The lease
term has been calculated as the non-cancellable period of the lease
contract, except where the Group is reasonably certain that it will
exercise contractual extension options. When measuring the lease
liabilities for leases that were classified as operating leases,
the Group discounted lease payments using its incremental borrowing
rate of 2.0%. Operating lease expenses have been replaced by a
depreciation expense on the right-of-use assets recognised and an
interest expense. Where the interest rate implicit in the lease
cannot be readily determined, the Group's incremental borrowing
rate has been used.
As permitted by IFRS 16, the Group has adopted the following
practical expedients on transition:
-- Not to reassess contracts to determine if the contract
contains a lease and not to separate lease and non-lease
elements.
-- Lease payments for contracts with a duration of 12 months or
less and/or contracts for which the underlying asset is of a low
value have, where appropriate, continued to be expensed to the
income statement on a straight-line basis over the lease term.
-- To apply the portfolio approach where a group of leases has similar characteristics.
The Group has adopted IFRS 16 using the modified retrospective
approach. Consequently, comparatives for the period ended 31 March
2019 have not been restated.
6. Basis of preparation
The financial information set out above does not constitute the
Group's statutory information for the years ended 31 March 2020 or
2019, but is derived from those accounts. The Group's consolidated
financial information has been prepared in accordance with
accounting policies consistent with those adopted for the year
ended 31 March 2019 . Statutory accounts for 2019 have been
delivered to the Registrar of Companies and those for 2020 will be
delivered following the Company's annual general meeting. The
auditor has reported on these accounts, their reports were
unqualified and did not contain statements under the Companies Act
2006, s498(2) or (3).
7. Directors' responsibility statement
The directors confirm, to the best of their knowledge:
(a) the financial statements, prepared in accordance with
International Financial Reporting Statements ("IFRSs") as adopted
by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and
the undertakings included in the consolidation taken as a whole;
and
(b) the Chairman's Statement, Chief Executive's Review,
Financial Review and Principal Risks and Uncertainties include a
fair review of the development and performance of the business and
the position of the Group and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
The directors of Telecom Plus PLC and their functions are listed
below:
Charles Wigoder - Executive Chairman
Julian Schild - Deputy Chairman and Senior Non Executive
Director
Andrew Lindsay - Chief Executive Officer
Nick Schoenfeld - Chief Financial Officer
Andrew Blowers - Non Executive Director
Beatrice Hollond - Non Executive Director
Melvin Lawson - Non Executive Director
By order of the Board
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EAPKSFDXEEFA
(END) Dow Jones Newswires
June 16, 2020 02:00 ET (06:00 GMT)
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