UPDATE 2-Telecom Plus rides on Npower deal, comfortable with outlook

Wed May 21, 2014 4:43am EDT

* Full-year revenue rises 9.5 pct to 658.8 mln stg

* Customer base in the full-year grows to over 530,000

* Shares jump as much as 10.7 pct in morning trade

* Says comfortable with mkt outlook of 50 pct jump in adj profit (Adds analyst comments, details, share price)

May 21 (Reuters) - British utility Telecom Plus Plc said it remained 'comfortable' with market expectations for a 50 percent jump in profit this year as demand for its services continued to grow, sending its shares up as much as 10.7 percent.

Shares in the company, which provides gas, electricity, fixed line telephone and broadband internet services, were the top percentage gainers on the London Stock Exchange on Wednesday morning.

"We remain comfortable with market expectations for adjusted pretax profits for the current year of 63 million pounds, and to delivering a progressive increase in dividends," Chief Executive Andrew Lindsay said in a statement.

The company reported a 25 percent rise in full-year adjusted pretax profit at 44.6 million pounds ($75.1 million) for the year ended March 31, helped by an increase in customer base and an initial contribution from the new energy supply arrangements with Npower.

"Forecasts show continuing strong earnings-per-share growth, with associated benefits to the dividend even as the net debt is paid down from the current level of 53.6 million pounds, already below 1x prospective EBITDA," finnCap analyst Andrew Darley wrote in a note to clients.

Full-year revenue increased 9.5 percent to 658.8 million pounds. The company's customer base grew to 530,639 during the period from 461,032 in the prior year.

Telecom Plus has reported a strong set of prelims, 5 percent ahead of forecasts for adjusted profit before tax and adjusted diluted earning per share, despite revenue pressure from the unusually mild winter, Darley wrote.

The company said average revenue per customer would have shown a further increase during the year, helped by an improved customer base and slightly higher retail prices, but these positive factors were more than offset by lower energy consumption during an exceptionally mild winter.

Telecom Plus said new members taking all five core services - gas, electricity, home phone, mobile and broadband - have doubled since the introduction of the new bundled service structure in November.

The owner of the Utility Warehouse brand said the number of services provided in the year rose to more than 1.9 million from 1.6 million a year earlier.

NPOWER PUSH

Telecom Plus bought back Electricity Plus and Gas Plus Ltd from Npower in a 218 million pound deal in November, nearly eight years after selling them to the British arm of Germany's RWE AG.

The deal with Npower, which supplies gas and electricity, was expected to improve energy margins by 4.25 percent and allow the company to offer more competitive tariffs along with ensuring a 20-year supply contract.

Telecom Plus on Wednesday said it raised full-year dividend by 12.9 percent to 35 pence per share.

Shares in the FTSE 250 company were trading up 10.7 percent at 1514.89 pence at 0828 GMT. ($1 = 0.5935 British Pounds) (Reporting by Noor Zainab Hussain in Bangalore; Editing by Gopakumar Warrier)

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