Whilst crippling wholesale energy prices may have dampened celebrations this year following an £8m loss during November and December 2005, Telecom plus (The Utility Warehouse) is again back on track. With a 'Good Value' recommendation in the Investors Chronicle of June 9th, profits and dividends are expected to rebound strongly.

Whilst gas prices were previously unhedged, an agreement with npower earlier this year, means that Telecom plus is now far less exposed to the price surges of the wholesale gas market. With this probelm solved, Telecom plus can again focus on it's core business of selling utilities to a growing customer base.

Whilst operating margins may be lower than previously envisaged, the npower agreement has already had a positive impact, with the Telecom plus energy business returning to profitability during the last quarter.

Telecom plus Management said that it is confident of resumed growth of dividend and full return to profitability in the new year, also commenting that little effect has resulted from Carphone Warehouse's recent agressive broadband marketing.

Broker KBC Peel Hunt is forecasting a dividend in 2006-07 of 2.5p, rising to 5.5p in 2007-08. Telecom plus shares look good value.

Labels: press-articles

posted by Jeremy Tromans at 6/16/2006 11:13:00 AM   

Have you ever wanted to be in the right place at the right time? Well you are! Marketing Director and Distributor Management Board Member Wes Linden looks back on his 7 years in the business and explains why there has never been a better time to be involved with Telecom plus.

“There are people that joined this business 7 years ago with me. Some of them today, are very glad they did. Others joined 1, 3 or 5 years ago, and also, are reaping the rewards of their efforts now. There are many others who joined, and did a bit, or did nothing, and then moaned, whinged, and said they weren’t going to work until everything was perfect in the Telecom plus garden! As a baby business, there were the occasional teething problems. A lot of people quit or just stopped working. Sadly for many of them, they’ll look back now and think “if only I’d stuck with it”, and have now possibly missed their chance of ever achieving any freedom in their lives.

If you’d have told me 5 or 6 years ago, or Trevor and Karen, Clive and Di, Robin or Steve, that in 5 years time, we would have a company that offers free calls 24/7 anywhere in the UK, and can save customers money on their line rental without the need for a £23.50 smart box; plus we’d have 2 of the most compelling mobile phone deals the UK has ever seen with great choice free handsets (we only used to have one - that cost £99.99 plus £35 connection plus £15 for voicemail!!!!); plus we’d offer the UKís cheapest domestic gas and electricity; plus we’d offer unlimited, unrestricted broadband access cheaper than pretty much every other provider; with over 99% of the marketplace still available; plus an imminent Business Club which will offer great savings to businesses.plus we’d have generic company training at over 20 venues throughout the UK, with an Opportunity Presentation or two (or three, four or five!) taking place nearly every night of the week... plus we’d have a company that consistently gets great publicity articles in the major broadsheets and shares magazines (NUMBER 1 in Europe!!!) to give us the credibility we desired, at a time when most of the population are worrying about what they can do to prevent them having to retire at 75 we’d have bitten your hands off, and even your toes and possibly your entire feet!!!!

If you’d said that a penalty for the fast and exponential growth, was the occasional blip, and the odd period when the company has to pedal faster to keep up with the demand, we’d have accepted that too.

Why should we accept this? Well, because it means that you are “in” now, at the beginning. Let me make that clearer .YOU are in at the beginning. With over 99% of the UK marketplace still to aim for as customers, and the 7 million baby boomers now coming up to retirement realising that relaxing through their golden years is no longer an option, and the younger generation realising they need to do something different than the traditional 9 to 5, 45 year career plan in order to get ahead (not to mention being able to buy their own place!), this is such a good time to be “in” the business.

Occasionally, people say to me - “I wish I had joined when you joined”! I always tell them that if they work their business consistently and persistently for the next 2, 3, 4, 5 years, then people will be saying exactly the same thing to them!! That, and the obvious financial benefits in both residual income and share options, will be your reward for seeing it through - for riding the waves with this fantastic company. For accepting the occasional challenge, in the same way that when you make a mistake on a customer form, the company accept your mistakes! For being a pioneer and helping this company grow to the 1 million customer mark over the next few years and become a billion pound company.

I remember many people who have fallen overboard since I joined. Some of them told me they were going to “become rich” and that they were going to be “massive players”. I often wonder how they are getting on now, and how they feel when they hear of our success in the daily national newspapers. I wonder whether they think that the reason they had for “putting their tools down” and folding their arms 4 or 5 years ago, because they couldn’t cope with the company growing, and the occasional teething problem that went with it, was in hindsight a bad move? Do they still feel quite so strongly about the invoice being a day late; their customer call being made to wait on the line for too long; their milkman telling them it’s a pyramid; or the £23.50 square smart box we used to have, not being programmed correctly for their Aunt Milly!?! It’s in moments of decision that your destiny is shaped....

I wonder how those who turned down a stake in The Body Shop, ebay, Betfair or Orange in their early days feel? I wonder how people feel when they see their lottery numbers come up, and then remember they forgot to buy a ticket that week? I wonder how Tottenham Hotspur feel about the fact they didn’t take the Russian multi-billionaire Roman Abramovich seriously, when he wanted to take over the club, seeing their neighbours Chelsea set to win every trophy there is? The world is full of nearly-men and missed opportunities”.

Back to today - what a great time it is to be involved. We know that early in your business, you’ll have teething problems yourself. You’re not sure how to handle certain queries, you worry about what to say, you’re disappointed someone has said no, you are upset that one of your customers received their modem a bit late, your guest didn’t turn up to the COP etc. etc. It happens to us all. In fact it happens to everyone, and still happens to me and the other Leaders today. The people who you see winning the prizes, and getting the promotions, have normally had more people say “no” to them than anyone else! They’re not lucky... it’s a simple equation - as the golfer Arnold Palmer said when a journalist commented to him that he’d had a lucky shot in a golf tournament: “It’s a funny thing, the more I practice the luckier I get”. But we’re here to support you, as are the COE Trainers at your local centre, and your local COP hosts. So talk to us!

If you are suffering from a challenge with anything in your Utility Warehouse business, don’t bottle it up - if you need help speak to your upline, or your upline Marketing Director - we are here to help. Do you know who your upline Marketing Director is? They have a vested interest in your success and will be happy to hear from you. They have a wealth of experience that you can benefit from too. If you have not yet made contact then call Executive Services and ask to be put in touch with your upline MD. They’ll pass on your details to him/her and they’ll contact you pretty swiftly.

2006 is going to be a great year for us, but as the saying goes “you gotta be in it to win it”! The trade-off is that occasionally we need to work together and help the company through these periods of massive growth, whilst helping them to grow “more massive” (great English huh? That is why I dropped out of university!). Make sure in 2010 they’ll be saying “I wish I joined when you did”!!!

Labels: distributor-opinion

posted by Jeremy Tromans at 6/15/2006 01:54:00 AM   

Cindy and I joined Telecom plus in its launch year - 1997 and raced through the levels of SE, ED and 50 Plus Club within the first eight months. However, other business interests meant that although my team continued to work and developed extremely strong businesses, I didn't take the active role I should have taken. I was earning a residual income but I wasn't growing my business from the top. Then one day, the Diana half of Clive and Diana phoned and asked, “Dennis, do you know what you haven't earned in the past 18 months.”

I was stunned. No, I hadn't any idea…and it was such a lot of money! That single question, gave me the shot in the arm I needed! I had gone back to working long hours for someone else's benefit and causing health problems for both Cindy and I! Within a month of that reality check, I was back…with a focus and a different approach!

In the early days, focusing on quantity rather than quality, we had found that many of those who signed-up didn't stay. But now, I don't try to convince people to join as Executives. I gently sow seeds with a 'do you know anybody who would like…to change their lifestyle…to earn some serious money etc.' Sometimes I get leads but often I find that the person I am talking to will open up - and I have learnt to listen! What's their lifestyle, what are their goals, what motivates them? Are their expectations realistic, are they achievable? Most importantly, do I think they are the right fit? It's a two-way thing, are we right for them, are they right for us?

I use my own example: starting as a 15 year old school drop-out, through my phase running a successful businessf or some years, then almost hitting rock bottom and bankruptcy - to where I am today, having recently achieved one of my own very personal goals. It's a brand new Mercedes SL; much bigger and much shinier than the DinkyToy version I first admired as a 12 year old and had my eye on ever since! This one is sitting on my drive, not on my shelf!

The key to our business growth now is to cherry pick. We gather those with determination and with a goal. We work closely with our team to develop them and we find we’re motivated by seeing them succeed and achieve their goals, after all, their success pays off for us too. As Executives, we are sponsors. Do you know what that means? It's defined as someone who assumes responsibility for some other person…and that's exactly how we see our role. So we're currently concentrating on getting the team to gather four customers a month with a goal of seeing 10 of themtaking the fabulous Silver Whisper cruise - then it's SMD status for us by Spring 2007!

Labels: distributor-opinion, testimonials

posted by Jeremy Tromans at 6/15/2006 01:46:00 AM   

As MD of my own property renovation business I was responsible for 48 staff and all the associated issues and after 33 years felt that there must be something more to life than working between 70 and 100 hours per week.

As a self employed business owner I had been asked to take a look at various business opportunities over the years and tried 4 different networking opportunities, 2 of which gave up before I did! I was rather sceptical when I first encountered The Utility Warehouse, after all, why should this be any different from the rest? The concept of networking is no different in this business, you still have to make and work your list, talk to people, be consistent and persistent but that's where the similarity ends. The services we provide are true consumables; we provide them all on one convenient bill and what a choice we offer!

I was hesitant, and I wasn't sure I believed it when I was told that I would receive all the help that I needed from my upline, right the way up to Clive & Diana. But these were not empty promises! From the moment I started my new business in January 2005, my sponsor Robin has been a tireless source of strength. Without him, I would not have hit my first target, which was to achieve the position of Senior Executive within 60 days.

My life has changed…I now work about 20 hours a week and have a true residual income. Even if I continue at just half my monthly growth rate, in just 4 years I will surpass the earnings it had taken me 33 years to achieve! I still set targets and aim for them - at the moment, I am watching my progress each month as there is no way I am going to miss the boat! I am definitely going to be on the Silver Whisper cruise! Apart from that, my future goal is to become a Marketing Director by Express Day 2006. Those are my own targets for the next year but now I would like to pass on what I have learnt and help some really great people in our team get to their Senior Executive positions and beyond.

Labels: distributor-opinion, testimonials

posted by Jeremy Tromans at 6/15/2006 01:41:00 AM   

Message from Charles Wigoder, Chief Executive, Telecom plus Plc. Published in Distributor Publication,News Plus - 19th May 2006.

What a great business this is! Since finalising our arrangements with npower, we can now focus all our resources on making this business bigger and better than ever. Our new retail energy prices are still below the cost in the wholesale markets, but our new arrangements mean that instead of losing money, our energy supply businesses are now profitable - and all our Distributors are benefiting from increased residual income payments as a result of both higher retail prices and also the payment of full-rate CVC on “energy only” customers. Our current prices are still extremely competitive and most households can achieve significant savings by moving their energy,telephony and internet services from their current suppliers, to The Utility Warehouse.

We've recently updated our Business Manual and introduced new training for SEs (to help them build their businesses to ED and beyond). We've also been running special BlackBerry training sessions to helpyou promote this increasingly essential communications tool. And we've launched new business energy tariffs, creating an enormous new potential income source which could transform your current earningsf rom Business Club customers.

We have also been focusing on increasing the number of services being taken by existing customers - our recent bill message in March to around 80,000 of our Club members who did not yet have Home Phone Line Rental resulted in a conversion rate of over 5% - so we will be rolling this message out tothe remainder of our customer base during May, as well as repeating it again in June to those customers in the original sample who did not respond last time. And of course, Distributors earn higher CVC on Home Phone customers who have transferred their line rental to us. We also ran a special offerpromoting our broadband package in the April bills, and have extended this offer so you can make it available to new customers as well until the end of June. Unfortunately for technical reasons, this offercannot be extended to existing broadband customers.

The recent broadband launch from Carphone Warehouse got enormous publicity - you can only admire the professionalism of their PR team. The truth of course doesn't quite match the hype...to get their “Free Broadband” you have to pay £21 per month for their line rental and calls package (which is significantly more expensive than our equivalent line rental and calls offer). Not to mention the £30 connection charge, the 18-month contract or the £70 disconnection fee. All the same, we do not intend to sit back and let them steal either customers or market share from us. We are committed to delivering great value to our customers - we've done so for over 9 years now, and we are not intending to stop anytime soon! It will however take time to put in place new commercial partnerships and to develop a new range of broadband packages in response to this latest move by Carphone Warehouse...watch this space!

We are seeing great attendance levels at COPs and COE training sessions which are being translated into increased activity by those who have attended, with a significant increase in the number of new Distributors joining the business and a corresponding increase in customer numbers.……and our fantastic holiday promotion is once again within the reach of every current Distributor. Those of you currently on track haveless than 6 months to go before guaranteeing your place on our exclusive 6 Star luxury cruise - with a number of places still available for those who were unable to achieve the qualifying criteria during the firstfew months.

Our business is now going from strength to strength, with more and more people beginning to appreciate our unique business model and the benefits it offers. We have some fantastic plans we intend to implement over the coming years and with the security of our new energy arrangements, can focus all our management attention on improving our internal systems and making our services even more attractive to our customers. There has never been a better time to be involved with Telecom plus.

For the benefit of all those who have joined the business over the last few months, together with anyone who does not receive our regular “Hot News” updates, we are including within this issue all the main announcements which have been published since our last main issue of News plus. Finally, make sure you put 17 September 2006 in your diary, and reserve seats for yourself and your teamat this year's Express Day before we sell out. We have some fantastic announcements planned, combined with training and new ideas to help you grow your business. You will also have the opportunity to meet both our senior management team and all the successful Distributors and leaders in the Network. It's a great day, and the best way to give your business a lift this Autumn. Don't miss it!

Charles Wigoder
Chief Executive

Labels: corporate-news, director-news

posted by Jeremy Tromans at 6/15/2006 01:31:00 AM   

The Telecom plus Win a Mini promotion has been a great success during the last 12 months, proving to be a really effective way of introducing prospective new Utility Warehouse customers to the great savings offered by the Utility Warehouse Discount Club.

At events across the UK, Independent Utility Warehouse Distributors have employed this free car promotion to good effect, providing an excellent conversation starter and opportunity to present club membership benefits.

The winner is…..Mrs Sara Amadi of Taunton! Sara’s winning entry was drawn at the end of the Board meeting in head office on Monday June 5th from the 34,000 entries received.

An absolutely incredulous Sara asked if Telecom plus was sure as she’d never won more than a £10 prize on the lottery before!! Sara lives near Taunton with her young family and is a nurse. She entered the draw at her children’s school Christmas Fair and is absolutely thrilled that she did!!

Interestingly, Mini ownership is one of the many benefits presented by the Utility Warehouse business opportunity. Around 50 existing Independent Distributors have to date taken advantage of a Mini One ownership scheme offered by the Company, which allows qualifying distributors the opportunity of a 'free' Mini One.

Labels: distributor-news

posted by Jeremy Tromans at 6/07/2006 10:44:00 AM   

Telecom plus Directors have expressed great confidence in the future prospects for the company now that the wholesale energy issues have been permanently resolved, together with their intention to remain competitive in the broadband market with new service(s) to be launched later this year once the necessary supporting infrastructure has been built.

Financial & business highlights

• Turnover up 33% to £136.3m (2005: £102.5m)
• Loss before tax of £1.6m (2005: profit £10.5m)
• Final dividend of 1.0p (2005: 6.0p)
• Elimination of exposure to wholesale energy prices
• Number of services provided increased 23% to 496,000 (2005: 402,000)
• Significant increase in value of investment in Oxford Power Holdings

Peter Nutting, Chairman, said:

"We are still the UK’s only fully- integrated supplier of a wide range of attractivelypriced
utility services, combined with a distribution channel of proven ability in cost
effectively gathering significant numbers of high quality new customers each month.
This combination continues to give us a considerable competitive advantage in the
domestic market. With the recent elimination of our exposure to wholesale energy
prices, the directors are confident that the current year will see a return to overall
profitability and a resumption of growth in our dividend payments to shareholders."

Chairman's statement

As you will already be aware, we experienced very difficult trading conditions last
year due to the extreme volatility and record prices in the wholesale energy markets
during November and December. Indeed, the losses we experienced in our gas
business alone during those two months reached almost £8m, more than off- setting
the satisfactory profits of £5.5m achieved during the first half- year.

This led to our decision to enter into the transaction with npower which we announced
in February 2006. Although not completed until 31 March 2006, it became effective
retrospectively from 1 January 2006 in all financial respects, and enabled our energy
business to return to profitability during the last quarter of the financial year. The
structure of the transaction preserves our unique business model from a customer
perspective as a fully integrated multi- utility supplier, whilst passing the substantive
risks and rewards of hedging and buying energy to a larger business partner. In
future, we expect to make a small positive margin from supplying energy to our
customers, albeit at a lower level than anticipated when we entered the energy
business some years ago, irrespective of the level (or volatility) of wholesale energy
prices, or fluctuations in demand caused by unseasonably cold or warm weather.

Notwithstanding these issues, I am pleased to report that we achieved considerable
growth during the year, with turnover increasing by 33% to £136m (2005: £102m).
This was due to a combination of higher retail energy prices and growth of over 23%
to 496,000 (2005: 402,000) in the number of services being provided to our
customers.

However, as a result of the losses in our gas business during November and
December, combined with exceptional costs of around £1.9m associated with entering
into the new npower arrangements, we incurred an overall pre-tax loss for the year of
£1.6m (2005: profit £10.5m). Notwithstanding this small loss, we are proposing a
final dividend of 1p for the year, reflecting our strong balance sheet and confidence in
the future prospects for the business.

The final dividend will be paid on 4 August 2006 to shareholders on the register at the
close of business on 7 July 2006 and is subject to approval by shareholders at the
Company’s Annual General Meeting which is being held on 12 July 2006.

Important highlights during the year included the successful launch of our new
Business Club in August 2005, which we anticipate will become an increasingly
important growth area for the Company over the coming years; substantial growth in
the number of broadband customers we supply; and the extremely encouraging takeup
by both existing and new customers of the opportunity to transfer their home
phone line rental to us.

Since the year-end, International Power Plc has announced the purchase from existing
shareholders (other than Telecom plus) of a 30% stake in Oxford Power Holdings Ltd
("OPH"). This transaction places an implicit value of £4.8m on our 20% investment
in OPH compared with a total cost of £1m.

At the AGM we will be saying good-bye to John Levin who is not standing for reelection
as a Director. He was one of the original founders of the business and made a
significant contribution to the management of the Company during its start- up period.
I would also like to take this opportunity to thank all the people involved with
Telecom plus who have played such an important role in developing the business this
year, in particular our extremely hard-working head office team and our network of
Independent Distributors, who display great skill and determination in continuing to
grow our business.

Outlook

Since the year end, Carphone Warehouse (through their Talk Talk brand) have been
attracting considerable publicity for their new combined broadband and telephony
package. Although it is still early days, we have seen little effect from this offer on
our own business, either in relation to growth in our own broadband base or on churn.

We are committed to maintaining a competitive position in this sector, and expect to
be launching a new range of broadband packages later this year once the proportion of
local exchanges which are unbundled has increased. We are confident the
competitive advantages provided by our integrated business model and low-cost route
to market will enable us to generate an acceptable return from supplying this service
in future.

Within our telephony business, margins have started to edge upwards recently as we
negotiate lower wholesale prices with our partners. Our position has been helped by
consolidation within the sector, which has made the call volumes under our control
increasingly sought after.

We are still the UK’s only fully integrated supplier of a wide range of attractivelypriced
utility services, combined with a distribution channel of proven ability in cost
effectively gathering significant numbers of high quality new cus tomers each month.
This combination continues to give us a considerable competitive advantage in the
domestic market. With the recent elimination of our exposure to wholesale energy
prices, the directors are confident that the current year will see a retur n to overall
profitability and a resumption of progressive growth in our dividend payments to
shareholders.

Peter Nutting
Chairman
6 June 2006

Labels: corporate-news

posted by Jeremy Tromans at 6/06/2006 10:25:00 AM