Interim Results

Telecom Plus PLC
5 November 2001



                              TELECOM plus PLC 
 
 
5 November 2001 
 
 
           Interim results for the half year ended 30 September 2001 
 
Telecom plus plc, the UK's best value multi-utility (gas, electricity,
telephony, internet), announces interim results for the half year ended 30
September 2001.  
 
 
Financial and business highlights: 
 
* Profits before tax of £2.0m (2000: £0.9m) 
 
* Full gas licence to supply homes throughout Great Britain received 
 
* Go-plus internet service successfully launched 
 
* Interim dividend of 2 pence per share (2000: 0.5p) 
 
 
Commenting on the results, Chairman Peter Nutting, said: 
 
'The award of the full gas licence has been an important milestone for the
company. We have already seen that customers like to take multiple services,
and when they do, they are more likely to stay with us.  
 
While many other companies in our sector have struggled, we are pleased that
profits have continued to rise, and the business is providing our growing
customer base with a broader range of services.'  
 
 
For press enquiries or further information, please contact: 
 
Charles Wigoder                              Neil Boom 
Telecom plus PLC                             Gresham PR 
020 8955 5000                                020 7329 7555 
 
 
Chairman's Statement  
 
I am pleased to report a period of strong progress for the business. In the
six months under review pre-tax profits have more than doubled to £2.0m
(2000: £0.9m). This reflects both an increased contribution from our Virtual
Network Business, where turnover increased by 21% to £13.8m compared with the
corresponding period last year (2000: £11.4m), and reduced losses in our
Distribution Business. 
 
In September we were awarded an unrestricted gas licence by energy regulator
OFGEM to supply domestic residences throughout Great Britain. As Telecom plus
is the first company from outside the energy sector to be granted a licence
of this type, we regard this as an important endorsement by the regulator of
our systems and management team. As a result, there has recently been an
increase in activity from our distribution channel that has produced a
corresponding rise in the number of new customers.  
 
Our ability to offer customers gas and electricity in addition to fixed line
and mobile telephone services, coupled with the introduction of a
multi-service application form early last month, has led to a significant
increase in the average number of services taken by each new customer. We
believe this is an encouraging indication that there will be widespread
appeal for our broad range of low cost utility services, which we expect to
be reflected in the performance of our Virtual Network Business during the
remainder of the current financial year. 
 
During the summer we launched go-plus, a competitively priced internet access
service. This is being marketed to existing customers through literature
enclosed with their bills, and also to new customers through our distribution
network. Naturally, it is also being marketed on the internet itself. We do
not expect go-plus to have any material short-term impact on our overall
financial performance, but we believe this new service is strategically
important over the longer term.  
 
In view of the Company's strong cash flow and rising profitability, the Board
has decided to pay an interim dividend of 2p (2000: 0.5p) per share. This
interim dividend will be paid on 
7 December 2001 to shareholders on the register at 16 November 2001.
Depending on the Company's financial performance during the remainder of the
current financial year, the Board intends to recommend a final dividend of
not less than 2p per share, making a total of not less than 4p per share for
the year. 
 
I would like to thank our staff and our distributors for their patience, hard
work and loyalty during the extended period it has taken to put together a
comprehensive and competitive range of services. We believe we are now
strongly positioned as the UK's first low cost multi-service utility company
and my Board colleagues and I are extremely excited about the opportunities
for organic growth which are now open to us. 
 
 
Peter Nutting  
Chairman 
5 November 2001

                                                  TELECOM plus PLC 
                                                  Profit & Loss Account
                                                                              
                                        6 months        6 months          Year 
                                           ended           ended        ended 
                                    30 September    30 September     31 March 
                                            2001            2000         2001 
                                     (unaudited)     (unaudited)    (audited) 
                                           £'000           £'000        £'000 

  Turnover                               14,644          13,773       28,106  
  Cost of sales                          (8,771)         (9,372)     (18,083) 
  Gross profit                            5,873           4,401       10,023  
  Sales and marketing costs              (1,050)         (1,132)      (2,393) 
  Adminstrative expenses                 (2,949)         (2,362)      (5,234) 
  Operating profit                        1,874             907        2,396  
  Interest receivable                       262             139          372  
  Interest payable                         (103)           (136)        (258) 
  Profit before taxation                  2,033             910        2,510  
  Taxation                                 (565)            (28)         (74) 
  Profit after taxation                   1,468             882        2,436  
  Dividends                              (1,092)           (267)      (1,077) 
  Retained profit                           376             615        1,359  
  Basic earnings per ordinary               2.7p            1.7p         4.6p 
  share                                                                       
  Diluted earnings per ordinary             2.6p            1.6p         4.4p 
  share                                                                       
  Dividend per share                        2.0p            0.5p         2.0p 


                                     TELECOM plus PLC 
                                     Segmental Analysis
 
                                                                      
                         6 months        6 months        Year 
                            ended           ended       ended 
                     30 September    30 September    31 March 
                             2001            2000        2001 
                            £'000           £'000       £'000 

Virtual Network                                               
Turnover                  13,840          11,389      24,289  
Operating costs          (11,131)         (9,198)    (19,422) 
Operating profit           2,709           2,191       4,867  

Distribution                                                  
Turnover                     804           2,384       3,817  
Operating costs           (1,639)         (3,668)     (6,288) 
Operating loss              (835)         (1,284)     (2,471) 

Total                                                         
Turnover                  14,644          13,773      28,106  
Operating costs          (12,770)        (12,866)    (25,710) 
Operating profit            1,874             907      2,396  
 


 
                                              TELECOM plus PLC 
                                                Balance Sheet
                                                                              
                                           As at           As at        As at 
                                    30 September    30 September     31 March 
                                            2001            2000         2001 
                                     (unaudited)     (unaudited)    (audited) 
                                           £'000           £'000        £'000 
  FIXED ASSETS                                                                
  Tangible assets                         2,047           1,400        2,134  

  CURRENT ASSETS                                                              
  Stocks                                  1,680           2,057        2,048  
  Debtors                                 3,320           2,459        3,311  
  Investments in quoted loan              1,302               -            - 
  securities                                                                  
  Cash at bank and in hand                8,917           7,537        9,008  
                                         15,219          12,053       14,367  
  CREDITORS                                                                   
  Amounts falling due within                                                  
  one year                               (7,194)         (4,573)      (6,867) 

  NET CURRENT ASSETS                      8,025           7,480        7,500  
  TOTAL ASSETS LESS                                                           
  CURRENT LIABILITIES                    10,072           8,880        9,634  

  CREDITORS                                                                   
  Amounts falling due after more                                              
  than one year                          (1,936)         (2,424)      (2,097) 
                                          8,136           6,456        7,537  

  CAPITAL AND RESERVES                                                        
  Called up share capital                 2,731           2,668        2,702  
  Share premium account                   3,989           3,492        3,795  
  Profit and loss account                 1,416             296        1,040  

  Shareholders' funds                     8,136           6,456        7,537  

  These unaudited results do not amount to statutory accounts within the      
  meaning of section 240 of the Companies Act 1985.  
                         
  The results for the year ended 31 March 2001 have been extracted from the   
  full statutory accounts for that period, which have been delivered to the     
  Registrar of Companies and on which the auditors gave an unqualified report.  
                                     

                                                TELECOM plus PLC 
                                               Cash Flow Statement 
 
                                                                              
                                        6 months        6 months         Year 
                                           ended           ended        ended 
                                    30 September    30 September     31 March 
                                            2001            2000         2001 
                                     (unaudited)     (unaudited)    (audited) 
                                           £'000           £'000        £'000 
  Reconciliation of operating                                                 
  profit to operating cash flow                                               
  Operating profit                        1,874             907        2,396  
  Depreciation                              156             115          265  
  Decrease in stocks                        368             214          223  
  Increase in debtors                        (9)           (550)      (1,402) 
  (Decrease)/increase in                   (502)           (151)       1,919  
  creditors                                                                   
  Amortisation of loan stock                 12              12           22  
  issue costs                                                                 
  Net cash flow from operating            1,899             547        3,423  
  activities           
                                                       
  Net cash flow from operating            1,899             547        3,423  
  activities                                                                  
  Return on investments and                                                   
  servicing of finance                      159               4          129  
  Capital expenditure                       (69)           (408)      (1,592) 
  Dividends paid                           (811)              -         (267) 
  Management of liquid resources         (1,302)              -            - 
  Financing                                  33           3,443        3,364  
  (Decrease)/increase in cash               (91)          3,586        5,057  
  Reconciliation of net cash flow                                               
  to movement in net funds                                                    
  (Decrease)/increase in cash               (91)          3,586        5,057  
  Capital element of hire                    18              68          148  
  purchase payments                                                           
  Change in net funds resulting                                               
  from cash flow                            (73)          3,654        5,205  
  Conversion of loan stock to               173              91          428  
  equity shares                                                               
  Cash used to increase liquid            1,302                 -          - 
  resources                                                                   
  Movement in net funds for the           1,402           3,745        5,633  
  period                                                                      

  Net funds at 31 March 2001              6,812           1,179        1,179  
  Net funds at 30 September 2001          8,214           4,924        6,812