Telecom Plus (TEP) Trading update summary

Trading performance

• Organic net customer growth reached 10.3%, with total net customer growth at 23.3% due to the TalkTalk broadband acquisition.

• Adjusted profit before tax for FY26 is expected at the bottom end of the £132m–£138m guidance, impacted by reduced energy consumption during a warm winter.

• Customer numbers rose to 1.43m, with 193k broadband customers acquired from TalkTalk.

• Services provided increased by 12.1% to 3.80m, but organic services growth lagged customer growth due to competitive energy and broadband markets.

• Churn rate increased slightly to 14.2%, reflecting heightened competition and aggressive fixed-price energy tariffs.

Financial and shareholder policy

• Year-end leverage ratio expected around 1.0x net debt/adjusted EBITDA, including TalkTalk acquisition costs.

• Shareholder distribution policy revised: at least 80% payout ratio, split between dividends and share buybacks, with at least 50% as ordinary dividends.

• Policy aims to maximize total shareholder returns, reflecting strong cash generation and a robust balance sheet.

Strategic initiatives and outlook

• Cross-sell trial into TalkTalk customers continues to perform well, with 14.5k customers upgraded and cross-sold.

• Partner numbers increased to 77k, supported by favorable macro trends and increased engagement.

• Focus remains on increasing services per customer, reducing churn, and growing contribution per customer.

• Medium-term target is to grow the customer base to two million households and beyond.

• Further updates on strategic initiatives and customer proposition improvements expected with full year results in June.