Picture supply: Getty Photographs
There’s an actual gem of a dividend earnings inventory within the FTSE 250 index and it’s referred to as Telecom Plus (LSE: TEP).
It simply appears to maintain on giving for its shareholders. And right this moment, 21 November 2023, the agency issued its half-year outcomes report with the strapline: “Comfortably on monitor to double the dimensions of our high-quality buyer base.”
That sounds spectacular. And it in all probability is understanding Telecom Plus.
A constant document
The corporate has an enviable monitor document. It owns and operates the Utility Warehouse model and describes itself because the UK’s main multiservice utility supplier. Meaning it affords bundled family providers, equivalent to power, broadband, cellular and insurance coverage all by means of one buyer account.
Folks clearly just like the service. Prospects benefit from the comfort of a single month-to-month invoice. And the agency additionally provides that they get “persistently good worth throughout all their utilities and distinctive service ranges”.
An enormous a part of the enterprise mannequin is the best way the service is marketed. And I’d say it’s some extent of distinction between Telecom Plus and its rivals. Prospects join through a community of native ‘Utility Warehouse Companions’ all throughout the nation. In different phrases, particular person brokers.
Anybody can apply to grow to be an agent. The set-up jogs my memory of the best way in style direct advertising and marketing firms used to function within the 60s, 70s and 80s, equivalent to Tupperware, Amway, Kirby and lots of others.
In a lot the identical means that these older companies operated, the companions at Telecom Plus suggest the agency’s providers to pals, household and folks they know by phrase of mouth.
The system works. And the enterprise has delivered uninterrupted progress in buyer numbers “for each one in every of its 25+ years”. The administrators assume the agency’s document means there’s sustainable double-digit buyer progress and earnings potential forward.
Good buying and selling, weak share worth
In the meantime, the figures in right this moment’s report are spectacular. For the six months to 30 September, income rose by simply over 57% 12 months on 12 months. And adjusted revenue earlier than tax moved round 36% larger.
The administrators rewarded shareholders by slapping slightly below 6% on the interim dividend. And that provides to a dividend document that may be a marvel to behold. Shareholder fee continued by means of the pandemic. And the compound annual progress charge of the dividend is operating at a tempting-looking determine slightly below 10%.
However the share worth has been sucked down with the final malaise available in the market just lately. And that state of affairs has pushed up the dividend yield to properly over 5% on a forward-looking foundation for the buying and selling 12 months to March 2025.
As I write, the shares are altering arms at round 1,672p. However my guess is that they’ll seemingly go larger as the subsequent bull market unfolds for shares.
Nevertheless, there are dangers for brand new shareholders. Maybe the most important being that the corporate certainly depends on with the ability to provide good-value offers for its finish clients. However the market could be very aggressive. And it’s doable that different firms may undercut costs sooner or later.
That mentioned, one of many benefits of the advertising and marketing arrange at Telecom Plus is that it saves on prices. And, on steadiness, I’d assume the corporate is properly value additional and deeper analysis now with a view to contemplating it for a long-term diversified portfolio.
Picture supply: Getty Photographs
There’s an actual gem of a dividend earnings inventory within the FTSE 250 index and it’s referred to as Telecom Plus (LSE: TEP).
It simply appears to maintain on giving for its shareholders. And right this moment, 21 November 2023, the agency issued its half-year outcomes report with the strapline: “Comfortably on monitor to double the dimensions of our high-quality buyer base.”
That sounds spectacular. And it in all probability is understanding Telecom Plus.
A constant document
The corporate has an enviable monitor document. It owns and operates the Utility Warehouse model and describes itself because the UK’s main multiservice utility supplier. Meaning it affords bundled family providers, equivalent to power, broadband, cellular and insurance coverage all by means of one buyer account.
Folks clearly just like the service. Prospects benefit from the comfort of a single month-to-month invoice. And the agency additionally provides that they get “persistently good worth throughout all their utilities and distinctive service ranges”.
An enormous a part of the enterprise mannequin is the best way the service is marketed. And I’d say it’s some extent of distinction between Telecom Plus and its rivals. Prospects join through a community of native ‘Utility Warehouse Companions’ all throughout the nation. In different phrases, particular person brokers.
Anybody can apply to grow to be an agent. The set-up jogs my memory of the best way in style direct advertising and marketing firms used to function within the 60s, 70s and 80s, equivalent to Tupperware, Amway, Kirby and lots of others.
In a lot the identical means that these older companies operated, the companions at Telecom Plus suggest the agency’s providers to pals, household and folks they know by phrase of mouth.
The system works. And the enterprise has delivered uninterrupted progress in buyer numbers “for each one in every of its 25+ years”. The administrators assume the agency’s document means there’s sustainable double-digit buyer progress and earnings potential forward.
Good buying and selling, weak share worth
In the meantime, the figures in right this moment’s report are spectacular. For the six months to 30 September, income rose by simply over 57% 12 months on 12 months. And adjusted revenue earlier than tax moved round 36% larger.
The administrators rewarded shareholders by slapping slightly below 6% on the interim dividend. And that provides to a dividend document that may be a marvel to behold. Shareholder fee continued by means of the pandemic. And the compound annual progress charge of the dividend is operating at a tempting-looking determine slightly below 10%.
However the share worth has been sucked down with the final malaise available in the market just lately. And that state of affairs has pushed up the dividend yield to properly over 5% on a forward-looking foundation for the buying and selling 12 months to March 2025.
As I write, the shares are altering arms at round 1,672p. However my guess is that they’ll seemingly go larger as the subsequent bull market unfolds for shares.
Nevertheless, there are dangers for brand new shareholders. Maybe the most important being that the corporate certainly depends on with the ability to provide good-value offers for its finish clients. However the market could be very aggressive. And it’s doable that different firms may undercut costs sooner or later.
That mentioned, one of many benefits of the advertising and marketing arrange at Telecom Plus is that it saves on prices. And, on steadiness, I’d assume the corporate is properly value additional and deeper analysis now with a view to contemplating it for a long-term diversified portfolio.
