Telecom Plus PLC (LSE:TEP) shares plunged almost 30% after it reported record annual results and unveiled a plan that aims to more than double its number of multi-service customers to more than 1 million by the 2031 financial year.
The FTSE 250 company, which trades as Utility Warehouse, revealed that adjusted pre-tax profit increased 4.7% to £132.2 million in the past year to March, on revenue up 5.6% at £1.94 billion.
Customer numbers increased 23.3% to 1.43 million, including broadband customers acquired from TalkTalk. Organic customer growth was 10.3%.
Alongside the results, Telecom Plus outlined plans to invest about £55 million a year to expand its multiservice offering, grow its network of local referrers, build brand awareness and improve its digital platform.
The strategy is designed to increase the number and proportion of customers taking multiple services, which generate higher returns and remain with the business for longer.
The company is targeting adjusted pre-tax profit of about £175 million by the 2031 financial year, shareholder distributions of around £100 million a year and a net debt-to-adjusted EBITDA ratio of about 1.0 times.
The investment programme will weigh on near-term earnings, with management expecting adjusted pre-tax profit to fall to £80-90 million in the 2027 financial year as it begins implementing the plan.
Stuart Burnett, chief executive, said: "Successful delivery of the plan will more than double our multiservice customer base to over one million customers by FY31, enhance the quality and resilience of our earnings and result in attractive long-term returns for shareholders."
The company also confirmed a revised shareholder distribution policy. For the 2026 financial year it plans a total distribution of 100p a share, including a £40 million share buyback programme, equivalent to 50p a share.
Shares fell 29.7% to 672p, their lowest since early 2012.
Analyst Charles Hall at house broker Peel Hunt says it is an "aggressive reset" and a "comprehensive plan" from management, that he says has started to deliver early results, with multi-service customer growth having "materially improved", with partner numbers up 5% and activity accelerating to 15%.
But the other impact is that he has reduced his PBT forecast for the current year by 39% to £85 million.
"We reduce our target price from 1,850p to 1,400p, but retain a 'buy' recommendation, given expectations of stronger multiservice customer growth."
** UPDATE: Adds shares and analyst comments **
