Telecom Plus (TEP) H2 2026 & Strategy update earnings summary

Executive summary

• Launched a five-year plan to double high-value multiservice customers from 500,000 to over 1 million by FY31, prioritizing quality, digital transformation, and brand building.

• The plan is built on four pillars: optimizing the multiservice proposition, scaling the Partner sales channel, building a nationally recognized brand, and delivering a digital experience with AI at its core.

• Requires significant P&L investment of £55m per annum, with targeted adjusted profit before tax (PBT) of £175m by FY31 and ROCE above 30%.

• Early trials and pilots show strong momentum in multiservice customer growth, increased Partner activity, and improved brand awareness.

• Achieved double-digit customer growth, with total customers rising 23.2% year-over-year to 1.43 million, including 193k acquired from TalkTalk.

Financial highlights

• FY27 adjusted PBT is expected to be £80m–£90m, reflecting upfront investment, with FY31 targeted at £175m, driven by multiservice and digitalization.

• Revenue grew 5.6% year-over-year to £1,941m; gross profit rose 8.7% to £389m, with gross margin improving to 20.0%.

• Adjusted EBITDA reached £162m, up from £148m; adjusted EPS increased 3% to 123p.

• CapEx is expected to be around £20m annually, with working capital outflows of £25–30m per year.

• At least 80% of adjusted profit after tax will be distributed to shareholders, with a minimum 50% as dividends.

Outlook and guidance

• Targeting over 10% growth in multiservice customers in FY27, more than doubling the previous year's growth rate.

• FY31 targets: 1 million+ multiservice customers, >50,000 annual cross-sells, insurance as a fourth core service, and best-in-class digital capabilities.

• H1/H2 profit split for FY27 will be 15%/85% due to investment phasing.

• Leverage ratio to rise modestly to 1.5x in FY27, returning to 1.0x by FY31.

• Shareholder returns to remain at least 80% of adjusted PAT, with at least 50% as ordinary dividend.