04 March 2023
By Maynard Paton
I have recorded another podcast with my good friend Roland Head. This time we talked about Telecom Plus, the FTSE 250 reseller of utilities that appears to be a beneficiary of higher energy bills. We discussed the group’s appealing growth record, upbeat future prospects, unusual marketing approach and dividend income potential:
We cover:
- Introducing Telecom Plus, its Utility Warehouse business and the unusual advertising through ‘partners’.
- Multi-level marketing, ‘pyramid’ partner recruitment and selling multiple services to customers face-to-face.
- The 12-bagger share price performance and 14% annual dividend growth.
- Energy hedging, revenue per customer, disappearing competition and a discounted supply deal.
- Half-year results showing revenue and profit up c50% with customer numbers up 24%.
- High energy bills, attracting one million new customers and the chance of energy prices falling.
- OFGEM, customer service, the need for extra staff and the impact on profit margins.
- Utility Warehouse’s PR and partners enjoying a freebie Maldives holiday.
- Steve Critchley’s 390,000 Utility Warehouse customers and his sales tactics in the dry cleaners.
- Founder Charles Wigoder selling shares at the £24 top.
- AGM protest votes on pay and proposed shareholder meetings on Zoom only.
- The 4%-plus yield and the prospect of higher income during the next few years.
- Signing up as a Utility Warehouse customer and anecdotal price comparisons.
- Our concluding thoughts on the business, future growth and valuation.
Extra links:
- [SharePad] Screening For My Next Long-Term Winner: TELECOM PLUS
- Steve Critchley interview
- Utility Warehouse website
- Roland Head’s dividend website
Happy listening!
Maynard Paton
PS: The podcast was recorded on 28th February 2023.
As a long term customer (home and business) and an on/off investor in this business I can add some additional detail:
1. Customer service has, for me, always been brilliant at Utility Warehouse.
2. The Chairman (founder) is quite brilliant (you can read about him on Wikipedia). He was impressive when I saw him at an AGM quite a few years ago.
3. My view is that a few agents do brilliantly so the average ‘customers per agent’ is very skewed.
4. Whilst the margins are low, ROE is high.
Hi Charles
Many thanks for the response. Always good to hear from the customer’s perspective!
Both Roland and I could not calculate any significant potential savings with UW given our own circumstances. I did remark during the podcast — but was edited out I think — questioning what the customers had previously been paying to be able to think UW was a super deal!
Agreed, full marks to Mr Wigoder for creating the business and leading it to the FTSE 250. Impressive indeed. With the agents, no doubt there is a relatively handful of top agents doing the bulk of the recruiting. And ROE is high — can’t remember if that was mentioned in the podcast, sorry if not!
Maynard
Hi Maynard
I’m not sure about the overall UW savings, but for me they are not the top priority. I prefer to pay a fair price and get great service. I really hate dealing with firms that have poor customer service, and that now seems to be the norm. So as long as a company treats me well and does not overcharge me, then I stick with them.