Telecom Plus PLC: Full-Year Results and New Five-Year Plan to Double Multiservice Customers by FY31

Strip that out and organic customer growth was still 10.3%, which is strong. In other words, Telecom Plus did not need the acquisition to grow – the existing machine was still bringing in customers at a healthy clip.

But there is a catch. Service growth lagged customer growth, and the average number of core services per organic customer fell to 2.45 by Q4 FY26 from 2.52 in Q4 FY25.

That matters because Utility Warehouse is at its best when customers take multiple services – energy, broadband, mobile and insurance – on one account. Those customers tend to stay longer and be more profitable. If customer numbers rise but the mix becomes less multiservice, the quality of earnings can weaken.

TalkTalk broadband deal looks sensible so far

The TalkTalk customer acquisition looks encouraging. Telecom Plus says 160,000 of those customers had been migrated onto its systems by year end, with the rest expected by the end of the first quarter of FY27.

More importantly, cross-selling is working early on, with 14,500 customers upgraded and cross-sold by 31 March. That is exactly the sort of thing investors want to see, because the whole logic of the deal is to turn broadband-only relationships into broader, stickier customer accounts.

Telecom Plus dividend cut explained: why shareholders still get more overall

This is the bit that may confuse some investors at first glance. The final dividend has been slashed to 12p from 57p, which looks ugly in isolation.

But the total shareholder distribution for FY26 actually rises to 100p from 94p. The reason is that Telecom Plus is now splitting capital returns between dividends and share buybacks.

For FY26, that means:

• Interim dividend: 38p
• Final dividend: 12p
• Total ordinary dividend: 50p
• Share buyback: £40 million, equivalent to 50p per share

The new policy is to return at least 80% of adjusted profit after tax each year, with at least 50% of that as ordinary dividends. The balance can go into buybacks or special dividends.

Management says the shares are currently trading below 20 times implied post-tax earnings under its formula, so it has chosen a buyback. In plain English, the board thinks the shares are cheap enough that repurchasing them is a sensible use of cash.

Why FY27 profit guidance is the real market mover here

Now for the cold shower. Adjusted pre-tax profit for FY27 is expected to be just £80 million to £90 million, versus £132.2 million in FY26.

That is a very sharp drop, and it is entirely driven by investment. Telecom Plus plans around £55 million per annum of profit and loss investment as part of its new five-year strategy.

The money will go into four areas:

1. Optimising the multiservice proposition
2. Scaling the Partner sales channel
3. Building a nationally recognised and trusted brand
4. Developing a best-in-class digital experience with a market-leading cost to serve

This is the key judgement call for investors. If you want smooth near-term profit progression, you probably will not like this. If you believe stronger investment now can build a better, larger, more resilient Utility Warehouse later, it starts to look more interesting.

Five-year plan to FY31: ambitious, but not random

The FY31 targets are ambitious. Telecom Plus wants adjusted pre-tax profit of around £175 million, shareholder distributions of around £100 million, return on capital employed above 30%, and net debt to adjusted EBITDA of around 1.0x.

The headline target is to grow high-quality multiservice customers from around 500,000 to more than 1 million by FY31. That is not just about adding bodies. It is about adding the more valuable type of customer.

To be fair, this plan is not coming out of nowhere. The company says early trials are already showing stronger multiservice growth and increased Partner activity. It also continues to grow its Partner base, which rose to 77,200 from 71,700.

My view on Telecom Plus results: positive long-term, messier short-term

There is plenty to like here. Organic customer growth of 10.3% is strong, the TalkTalk integration seems to be moving along, gross profit rose faster than revenue, and the balance sheet still looks manageable with net debt to adjusted EBITDA at 0.9x.

There are also clear weak spots. Churn rose to 14.2% from 13.7%, insurance services fell 8.3%, bad debt increased to £41.2 million from £33.4 million, and average services per customer moved the wrong way. Competition in energy and broadband is clearly making life harder.

So my read is this: FY26 was good, but not flawless. The bigger issue is whether the market will be patient enough to wear a much weaker FY27 while management spends for growth.

If the five-year plan works, Telecom Plus could emerge with a stronger brand, more multiservice customers and higher-quality earnings. If it does not, investors will have swallowed a big profit dip for not much reward. That makes the next 12 to 18 months crucial.

What matters most for investors in the next update

• Whether multiservice customer numbers start improving at the pace management expects
• Whether the average number of services per customer stabilises or rises
• Progress cross-selling the TalkTalk customer base
• Any movement in churn and bad debt
• Evidence that the £55 million annual investment is producing traction

In short, Telecom Plus has chosen growth over short-term comfort. That is brave, and potentially rewarding, but it raises the execution bar. Investors now need proof, not just promises.