Telecom Plus Stock

Right. Let's get cracking. Good morning, everyone. I'm Stuart Burnett, Chief Executive of Telecom Plus. And you'll have seen that we released our FY '26 results this morning and published a video presentation on the results online. And Nick and I will take any Q&A on those FY '26 results after the presentation today because we wanted to spend the time this morning to talk through in detail our strategy update and new 5-year plan that we've launched today following the review that we announced in our trading update back in April.

I'm going to lead us through the strategy update together with some of our leadership team. Joining me, you've got Nick Schoenfeld, our CFO, who you know, together with Justin Bozzino, who heads up our partner network; David Walter, our Chief Commercial Officer; and Rob Harris, our Chief Operating Officer; as well as various other members of our leadership team, who I'll introduce you to later. Now in terms of the running order, I'm going to start by providing an overview of our new 5-year plan, and then we'll step through the important features of our business model and the impact of changing market conditions, followed by a detailed run-through of the 5-year plan itself, then what delivery of the plan looks like before wrapping up and moving on to Q&A.

Now there's a lot to cover. It's going to be about 1.5 hours of presentation followed by around 30 minutes of Q&A. So let's dive in. Now the 5-year plan that we're launching today is all about how we return Telecom Plus to delivering on and being rewarded for the unique and special features of the business that I suspect attracted many of you to Telecom Plus in the first place. In short, it's about building on our leading position in acquiring high-value multiservice customers. And the key takeaways are set out on this following slide. So first of all, we have a unique capital-light business model based on acquiring these high-value multiservice customers who've got market-leading lifetimes and financial contributions that our competitors simply cannot match.

And we're able to sign up these multiservice customers when others cannot because of our unique partner route to market, which has been proven over many years as a powerful way to overcome that natural inertia that exists for switching multiple services at once. And this multiservice and partner-driven business model, it really works. We've got a 30-year track record of profitable growth with particularly strong customer and profit growth performance over the last 5 years, nearly 14% and 19% CAGR, respectively. That said, more recently, changes in market conditions with increased competition, particularly in the energy and the broadband markets, have made it more difficult to sign up multiservice customers in volume, resulting in us signing up more lower-quality single-service customers with shorter lifetimes and lower financial contributions, which, of course, dilutes the quality of the overall customer base and the resulting earnings.

So today, we're launching a new 5-year plan focused not simply on top line customer growth, but instead on doubling our high-value multiservice customer base from 0.5 million today to over 1 million by FY '31. And there are 4 key pillars of the plan. First of all, optimizing our multiservice customer proposition; second, scaling our unique partner sales channel; third, building a nationally recognized and trusted brand; and finally, delivering a best-in-class digital experience with AI at its core and with market-leading cost to serve. Delivering on this plan will create significant value, but it will also require significant P&L investment. It's going to require GBP 55 million per annum of P&L investment over the course of the plan, and we'll step through later exactly how that all flows through. And this means that for FY '27 in the current year, adjusted profits before tax will be in the range of GBP 80 million to GBP 90 million.

I absolutely appreciate that this is a big move. But as you'll hear, I think, as we go through the presentation, it's absolutely the right move for the business and the plan is the right plan. And successful delivery of that plan will result by FY '31 in around GBP 79 million a year of additional high-quality profits driven by that increase in multiservice customers and GBP 20 million per annum in additional benefits from our digitalization and AI programs. And together, that will lead to a targeted adjusted profit before tax in FY '31 of GBP 175 million with appropriate contingency built into that number given, of course, we're looking about 5 years out. And importantly, these will be incredibly high-quality compounding earnings with strong and growing cash generation each year, driven by that significant growth in high-quality multiservice customers and with EPS growing well in excess of customer growth.

And finally, and critically, this isn't just a plan on paper. The steps that we're taking are themselves an endorsement of the unique features of the business model that we know works. And there are also a number of very positive signals that we're already seeing from various early-stage trials, which we'll come back to later and which collectively give us high levels of confidence in the deliverability of the plan. So those are the headlines with a real focus on the long-standing foundations that have made Telecom Plus different and successful for over 30 years, especially our multiservice proposition and our partner route to market and a clear decision to take control of our future direction.

And key to all of this is to really understand our business model and in particular, the power of multiservice, why multiservice customers are the centerpiece of the model, why they're so valuable, why we're focused on doubling our number of these special customers from 0.5 million to 1 million over the next 5 years and what that will mean for long-term value creation. Some of you will already be aware of some of this, but it's important to nonetheless step through it because it provides some really important framing.

But there are also some very important new insights and data points, which really go to the heart of why this is the right plan for the business and for you as shareholders. And the starting point is to clarify exactly how our multiservice customer proposition works. Now this slide shows how the proposition is put together. Very simply, the more services a customer takes, the bigger the savings, which provides an incentive to join, an incentive to take more services and then to stay with us for years. And this is structured so that as they take more services, customers receive a bigger discount of their energy bill, funded through some of the additional margin from the additional service or services they take, plus the operational efficiencies that we gain from spreading one set of operating costs across multiple revenue streams.

This is what makes the multiservice proposition affordable and sustainable. And it means that while we still make some additional margin from each additional service the customer takes, we also critically extend their lifetime. So that's how the multiservice proposition works. Now let's turn to the value of these multiservice customers compared to single-service customers. Now in this table, we've broken out our organic customer base into 1, 2, 3 and 4 service customer cohorts. And for clarity, what we're talking about here are core service types, where core services are energy, broadband, mobile and insurance and service types, meaning, for example, we count energy as one, even if a customer takes both electricity and gas. And likewise, multiple mobile SIMs just count as one core service type in this view.

As you can see, multiservice customers have market-leading lifetimes with an astonishing almost 25 years lifetime for the highest quality full-service homeowners. Whilst multiservice customers as a whole average around 13 years of lifetime, significantly more than single-service customers. I would note, however, that even our single-service customers do have a lifetime that would be the envy of many of our competitors. And you can see on this next slide that this means our multiservice customers have an average lifetime, which is 1.7x that of a single-service customer. But of course, lifetime, as I said, is only one part of the equation.

And as you can see from the chart on the right, our multiservice customers have an average annual variable financial contribution of around GBP 185, which is 1.8x the contribution from single-service customers. So 1.7x the lifetime, 1.8x the contribution combined, that's more than 3x the overall value. So put simply, multiservice customers have market-leading lifetimes and financial contributions and therefore, overall lifetime value. If ever there was an endorsement of our multiservice customer proposition and the partner model, which signs up these multiservice customers, then this is it. Our unique model enables us to build a long lifetime, high-value multiservice customer base that our competitors simply cannot match.

And as we'll come on to, it's that high-value multiservice customer segment, which our new 5-year plan is focused on growing. There's one additional benefit from multiservice that I wanted to call out upfront given its importance. And this is what I'd call the innate multiservice data advantage. And by definition, we have significantly more data, insights and touch points with our multiservice customers than any of our competitors get from their customers. We know their energy consumption habits, both volume and time of day. We know where and when they've traveled and how often from their mobile data and their roaming behaviors. We know the number and type of devices connected to their Wi-Fi. We know the size, value, key details of their home, their card spending habits, their payment history. We know their credit quality, contact propensity rate. The list goes on and on. And this presents significant and in a world of AI, rapidly growing opportunities for us to identify and create value in ways and in places that others simply cannot.

In many ways, our multiservice customer base is the perfect use case for AI, giving us access to unique value creation opportunities, including identifying when and how to cross-sell additional products or services, tailoring our proposition to meet the specific needs of that individual customer, identifying churn propensity triggers, supporting our partners to identify which of their contacts are the best prospects for us, identifying efficiencies and service enhancements across the whole end-to-end customer experience and pricing our services and in particular, our insurance services with the benefit of what you might call a 360-degree inside-out view of the customer.

Now we'll come back to many of these points as we go through our plans, but it's a highly valuable feature that shouldn't be overlooked. So we've talked about the unique value of multiservice customers. But the reason why we stand alone in building this sort of high-quality multiservice customer base, well, it's because of our partner route to market. It's the only proven model for signing them up. Indeed, our partner network has been at the core of our success for the last 30 years, exactly because of that ability to sign up multiservice customers. And so why is that? First of all, there is a natural inertia and also like a perceived complexity to switching multiple services all at once. It's the sort of inertia that traditional advertising or digital marketing simply cannot overcome. But a conversation with a local trusted friend or a family member offering personalized support with a genuine recommendation or endorsement, it does exactly that. It overcomes the inertia.

Secondly, the people who respond to direct advertising or digital campaigns or switch to a price comparison website are typically what I would call savvy switchers, who are typically loss-making in year 1 for their supply and will then switch around every year or the moment that you try to make a fair return by rolling them off from their introductory tariff. These are exactly the sort of customers that we don't want. Whereas the local contacts our partners are speaking to at the school gates, on the side of the footy field, in the queue at the butchers, at the golf club, they're typically not regular switchers. They are not looking to switch. But they like the idea of the savings, the simplicity and the service that you get from our multiservice offer. And they buy into that personal recommendation of long-term peace of mind pricing and the idea of never needing to switch again. And it's a genuine moat around our business.

We've got the expertise in building and managing out this vast local volunteer network that nobody else in the country can match. We've consistently seen growing demand per partner opportunity. The partner numbers have doubled in the last 5 years. And more recently, we've even seen an increase from the 77,000 partners at the end of last year, end of FY '26 to over 81,000 today, an increase of over 4,000 in just 2.5 months, showing that it's more relevant and more in demand now than ever before. And through this large network of partners, we are just 1 degree removed from the vast majority of the UK's best customers up and down the country. And looking ahead, we benefit from several multi-year structural tailwinds. The cost of living squeeze, more and more people in genuine need, not only of savings, but also income and additional income that can help them weather the storm of rising costs and unaffordable mortgage payments and the challenging jobs market.

As the work transition, growing numbers of people who are looking for more flexible part-time way to earn. And while traditional gig economy employers can provide short-term income, the regular income of active partners make and especially the passive income they get is second to none in the UK. And then finally, the pensions crisis will be a multi-decade rather than just a multi-year tailwind. People simply aren't saving enough for retirement. And so as well as providing a flexible working option for pensioners, the passive revenue share income that our opportunity provides is an ideal supplement for pension income.

And in terms of the size of this opportunity, we did some research with the CVR that shows that there are currently 20 million adults in the UK who have some form of second or part-time source of income. So as we double our current partner numbers to around 150,000 over the coming years, that will still only be less than 1% market share of this growing marketplace. And then finally, a word on AI. The AI is already proving its worth in enhancing our partners' ability to perform their roles, giving them better tools and better information, and we'll come back to some of that later. It certainly doesn't disrupt their role just as the launch of the Internet or the launch of price comparison sites haven't disrupted it either because it's the personal connection, the explanation and the recommendation together with that sort of sense of community and being a part of something that overcomes the inertia and the perceived complexity.

So unlike more commoditized services like price comparison sites, we look forward to an AI-enabled world with a great deal of optimism and excitement. So that's multiservice and partner. Now on to the one other key feature of our business model that I wanted to call out, which is our capital-light approach. We are experts at acquiring and looking after high-quality customers in what you might call the capital-light downstream or retail part of each of our markets. And we partnered with experts in the capital-intensive upstream parts. So part of this, we put in place long-term wholesale supply agreements across each of our service verticals, ensuring that we have long-term access to the services, the features, the infrastructure as well as the wholesale pricing that we need to compete. As one of the largest and strongest of the independent challengers in each of our markets and with a proposition and route to market that's not seen as a direct competitor to our wholesale providers. In fact, they view it as complementary. This means that we have good strong negotiating leverage and ensuring we have market-leading terms.

A one case in point is our long-term energy wholesale supply agreement with E.ON, which runs to 2033 and provides us with insulation from price volume volatility, whether due to extreme weather conditions or macro political events around the globe. In addition, we're not exposed to the collateral or mark-to-market requirements associated with forward hedging. But it's a similar story in broadband and mobile, where we are what you call a virtual operator, and we're not exposed to the capital costs of the networks and the upstream infrastructure. As a related point, it also means that we're not exposed to the technology or obsolescent risks or the volume risks that exist upstream. And again, in insurance, we primarily operate as a broker, albeit we do have a captive insurer in the group to provide security of supply, and we put in place extensive reinsurance.

And all in all, this capital-light model has enabled us to maintain a long-run net debt to EBITDA to adjusted EBITDA ratio of around 1x, whilst at the same time, growing the business and returning 80% of adjusted PAT to shareholders. So pulling all of that together, here is a visualization of our unique business model, which some of you will recognize, showing how it all fits together. And it all starts with our multiservice customer proposition. By bundling together energy, broadband, mobile and insurance, we acquire those multiservice customers with market-leading lifetimes and contributions that we talked about. And as well as the more value, the more services that they take, multiservice customers benefit from the simplicity of getting all of these services on one bill, one phone number, one app, one password, combined with our award-winning customer service.

And together, that means that once they join us, they don't want to leave. Essentially, we aim to be their last ever switch. And we also get a number of structural financial benefits from multiservice customers. More margin, lower bad debt, lower cost to serve, a higher contribution to our fixed overheads. And we reinvest some of this back into the customer proposition. And that means that we can put together a compelling customer offer whilst at the same time growing profitably. And this creates a proposition, which is genuinely worthy of recommendation. And that's how we sign up our multiservice customers, that word-of-mouth recommendation by our partners. So our partners are the key to unlock the access to the multiservice customers.

So that's the business model. And as I said earlier, this is a business model that really works. We've got that 30-year track record of customer growth and strong financial performance. And as you can see here, that performance in terms of customer and profit growth has been particularly strong over the last 5 years with a CAGR in organic customers of 13.8% and an adjusted profit before tax of 18.7%. But more recently, changes in market conditions have made it more difficult, as I said earlier, to sign up as many of the high-quality multiservice customers that we were talking about a moment ago. Now you'll remember that back in 2022, our core energy market was then impacted by the Ukraine war and the ensuing energy crisis. And this had a number of consequences.

It cleared out the uncapitalized unsustainable operators who had brought this sort of destructive price competition to the energy market and regulatory changes were introduced to make sure that unsustainable suppliers like that could never operate in the market and brought in new financial resilience and capital adequacy rules. And we view these as very positive changes. They removed the unsustainable price competition that had impacted our growth between 2014 and 2021 and were designed to ensure that suppliers operate rationally and based on a level playing field. During this period, whilst most other suppliers essentially set up shop and stopped taking on new customers and instead use that sort of hiatus period to modernize and digitalize and replatform their technology stacks, we instead seized the opportunity to return our business to significant growth.

Our view based on the market dynamics at the time was, firstly, that single-service customers would not only be profitable as they have always been for us, but also that they would have much longer lifetimes given there would be less switching. And secondly, that we would need to invest less in both acquiring and holding on to these customers given the market was more rational and we set our business growth targets based on these assumptions. But since then the market dynamics have shifted. Octopus has emerged as a new type of challenger. It is the U.K.'s largest supplier now. It is up to over 25% market share from just 6% 5 years ago. And it has achieved this by investing hundreds of millions of pounds in building a strong brand never seen before in this marketplace and an advanced digital platform and customer experience.

The has coincided with customer expectations shifting rapidly and that is set to continue as the energy market as a whole modernizes and customers start to engage with and demand self-serve capabilities as well as new developments like time-of-use tariffs and other innovative tariff types. And you can see on this chart that we are the only other large supplier alongside Octopus that is gaining organic market share. All of the other remaining large players, British Gas, E.ON, EDS, Scottish Power, Ovo they are all now losing market share. And as a result, they have been competing hard on price to stem losses. As you can see on the chart, British Gas technically moved forward on this chart because it acquired inorganically the customers of yet another failed supplier, Rebel Energy, out of the supplier of last resort process last year. This chart shows how our energy competitors have been offering linked to the above increasingly competitive introductory pricing over the last year. Whilst the degree of competitive price investment was already fairly high in FY '25 that you can see on the left hand side of the chart that has meaningfully stepped up over the last year as you can see over on the right.

And this level of discounting has meant that it has made it more difficult to acquire as many multi-service customers as for even with our multi-service discounts, for example, for our three service customers. We might often only appear in the middle of the pricing tables at the moment versus some single-service towers being offered by competitors. And at the same time, customers have greater incentives to churn, often able to save what looks like a headline GBP 150 or GBP 250 saving or more by switching. Now, this has resulted in us signing up fewer multi-service customers and more lower quality single-service customers across both energy and mobile and seeing our overall churn rate increase. However, there's one additional trend which I think is really important to understand and which underpins the fact that despite the recent market shifts and this increased competition, the business model is well set with the right plan and the right actions to keep acquiring more multi-service customers and critically that the value of those multi-service customers remains as high as ever and is really worth investing in.

Now, as you can see here, when we look at the 12-month churn rate of different cohorts of our customers over time, you can see on the left that the churn rate of our single-service customers have increased quite meaningfully in recent years in response to some of those recent changes in market conditions. On the flip side, however, the churn rate of our multi-service customers has actually improved over the same period even despite the changing market conditions and increased competition. So this clearly demonstrates that the highly valuable heart of our business, those multi-service customers remain strong and intact despite changing market conditions. And it's here where we'll be focusing our future growth because as I said earlier, we've got 0.5 million of these multi-service customers with the market leading lifetimes and contribution level and a value that none of our competitors can match.

And by the end of our 5-year plan, we expect to have over 1 million of these customers. Customers who are able to retain and build value even in more competitive challenging market conditions. Now before we move on, a quick word about broadband as well as some of these changes in market conditions and competitive dynamics aren't just in energy. At the same time, in the broadband market, the nationwide full-fiber rollout and the emergence of Altnets. So these are some of the new full-fiber broadband providers like Cityfibre, Community Fibre, Netomnia, and others that you'll have heard of who are needing to demonstrate to their financial backers that they can get volume on their networks has resulted in an acute period of competition for broadband.

And you can see here the downward pressure on broadband pricing over the last few years, which is all in the face of course of meaningful underlying cost inflation. Now, while some consolidation has begun to take place in this market and we know from experience that as new technologies are rolled out, in broadband, there's typically a period of margin compression followed by margin expansion back to normal levels. But right here, right now, these dynamics have impacted our broadband gross adds and our broadband churn levels.

So, what does all this mean? Well, as those market shifts have played through, as well as our strong total customer and profit trajectory that we showed you earlier, we've also seen the following trends. First of all, our number of organic services per customer has fallen, as you can see on the left. Whilst on the right you can see how our churn rate has increased back to these higher historic levels driven by single-service churn as mentioned above after significant fall in the big dip you can see in the middle which was during the energy crisis. Now I think it's worth digging a little bit deeper into the fall in services per customer.

Now as you can see on that chart on the left, the fall in service per customer really started from FY '23 onwards. And in that same period between FY '23 and FY '26, it's important to note that, first of all, that we have still increased in absolute terms our base of high-value multiservice customers. And you can see that on the left-hand side here, we've increased them over that period from around 400,000 multiservice customers at the end of FY '23 to 500,000 at the end of FY '26. Albeit as you can see on the chart on the right that, that rate of increase has slowed quite meaningfully over the same period, given those changed market dynamics that we've already highlighted. But even in those more challenging market conditions, we've shown that we can still grow in absolute terms our multiservice customer base, but we've not been set up to do it at the expected rate.

And what this means is that over the last few years, whilst we've still grown our multiservice customers in absolute terms, the percentage of single service customers in our overall base has increased and the percentage of multiservice customers in our base has decreased, as you can see here. And of course, that has a knock-on effect in reducing our overall customer quality. It means reduced average customer lifetimes and contributions and therefore, reduced lifetime values. And reversing these trends, so growing the percentage of our customer base for multiservice with the percentage of single service customers, therefore, reducing is, in our view, the key step if we want to return to being valued as a growing high-quality earnings compounder.

And you can see here why it's so important. So as a reminder, these top 2 charts show the total customer and profit growth trajectory over the last few years, and we showed those charts earlier. But in the bottom left here now, you can see how the quality of the customer growth measured here by services per customer has been falling, and how with a growing proportion of shorter lifetime, lower contribution single service customers where the churn rate of these single service customers is actually increasing for the reasons we mentioned earlier, this obviously has an impact on the quality of future earnings, which over time would put pressure on future profits.

And one view of this is obviously the derating which we've experienced that you can see in the bottom right-hand side of the slide. And what we're announcing today are the clear steps that will reverse those trends on the bottom of the slide, significantly increasing the quality of the customer base, enabling us to consistently build high-quality earnings faster than we add customers. Now, all of that said, I would stress here that single-service customers still remain a valuable part of the overall business. Despite their shorter average lifetime and lower contribution, they're still profitable, albeit less profitable than multi-service customers. And whilst they have shorter lifetimes at 7 years, they still have a lifetime with the envy of most of our competitors. They make an important contribution to covering our overheads in industries where scale is of course important. They improve our wholesale commercial negotiating position, particularly in the telecom space where our wholesale economics improve with scale.

And of course, single-service customers can also be the multi-service customers of the future. We know who they are and we can target our cross-sell efforts towards them as a feeder pool. So what does that mean for future inorganic opportunities? Well, right here, right now, the focus is absolutely on organically growing our multi-service customer base. Albeit, of course, where we identify compelling value from inorganic opportunities, we'll take a look at them, but only as a complement to our organic multi-service strategy, not instead of it. And that brings us to where we are here today. In summary, we have a business model which has the key inherent features and the clear opportunity to create real value over the coming years through doubling down on multi-service customers. Changes in market conditions have meant that this business model is not fully maximizing the significant opportunity resulting in an increased percentage of single-service customers with shorter lifetimes and increasing churn.

As you'll be aware, we had a medium-term target of 2 million customers and that remains as a medium-term target. But as I've unpacked, it's essential that we really apply our focus on doubling our most valuable segment, our multi-service customers. They have longer lifetimes, they make higher contributions, and critically they are resilient to changes in market conditions. Now, the size of the total customer base will rise on the tide, but the value creation from scaling these high-quality multi-service customers is the real prize here. And we have a clear plan to address this and set the business on a path to deliver high-quality compounding growth and creating significant long-term value through doubling our multi-service customers to 1 million over the next 5 years. So now let's step through the plan.

Now the plan covers the following 4 areas. First of all, optimizing our unique multi-service proposition. Second of all, scaling our partner sales channel. Third, building a nationally recognized and trusted brand and fourth delivering a best-in-class digital experience with AI at its core and with market-leading cost to serve and you can see the metrics that we'll be looking to move as a result over on the right-hand side increasing our multi-service customer growth rate, increasing in-life cross-sells, significantly increasing insurance service growth and launching a number of new insurance products, increasing the number of active partners in our network, building our brand awareness and lowering our admin cost per service.

Now, as we said earlier, this is an integrated investment plan across a number of different, but related areas, all designed to increase the number and percentage of multi-service customers, boost our partner channel, and deliver high-quality compounding earnings growth going forwards. It reflects the fact that market dynamics are changing, customer expectations are evolving, competition retention is increasing, and technology is reshaping how value needs to be delivered. And we see a clear opportunity to build on our existing proven strengths, harnessing the unique features of our business model, combined with the power of technology, data and AI to transform how we acquire and deliver both for partners and customers and enhance the value we offer them whilst unlocking some undeveloped areas of the business. Now as mentioned earlier, delivering on this plan will require significant P&L investment in order to unlock the significant value creation, and Nick is going to step you through the numbers on this.

Thank you, Stuart. So, on this following slide, we set out the GBP 55 million per annum planned investment during the 5-year plan. Now, this is of course a significant investment, but this has the key goal of doubling our multiservice customers to 1 million by FY '31 in addition to enabling our digitalization and productivity projects. So, this plan is linked to clear measures which will be used to track the outcome of these investments. The actual targets which we have against these measures will be discussed when we go through each of these plans later on in the presentation. Starting with our multiservice price investment, we have a total envelope of approximately GBP 30 million per annum.

Now Stuart will share some more detail about these pricing investments later on, but for obvious competitive reasons, we can't go into the specific details as to how this will actually be deployed in practice to the individual services and customer subgroups. But this will of course be carefully targeted in a way to maximize multiservice adoption. Furthermore, we plan to invest around GBP 5 million each year in cross-selling to our existing customer base. For instance, that's equivalent to GBP 100 incentive across 50,000 of our customers to take additional services in a particular year where for example, cross-selling another service to a 3 service customer will increase their lifetime by 10 years from 14 years to 24 years.

On Insurance, we're planning an investment of GBP 6 million which is to both launch new products and promote our Insurance offering. This will be split between approximately GBP 3 million of incremental OpEx investment in building capability across the insurance ecosystem and approximately GBP 3 million of investment directly into insurance pricing. Now building out this fourth core service will create even more opportunities to attract multiservice customers. We plan to spend GBP 4 million each year scaling our Partner opportunity which will be split between the Partner commission structure and the capabilities required to broaden the Partner opportunity as we'll explain later on.

The investment focuses on our key multiservice customer acquisition channel. After all, it's through the Partners that were able to acquire multiservice customers at scale in a way that others cannot through traditional acquisition methods. Our GBP 5 million brand investment is built around local impact. The aim here is to make every Partner conversation easier which enables Partners to convert more multiservice customers. As recognition increases, the burden of proof drops and that unlocks an important compounding effect.

Lastly, we plan to invest GBP 5 million of OpEx each year in order to leapfrog our digital experience to best-in-class and further develop our AI initiatives that will enable the delivery of significant operating cost savings per customer and per service whilst at the same time improving the quality of the customer service journey. As you'll see later on, by FY '31, we expect to deliver GBP 20 million of annual benefits from this net of inflation. As you'll see when we go through each of these plans in more detail later on, this investment is targeted to deliver significant long-term value with the growth of our multiservice customer base with its high lifetime values at its core.

And here on the next slide, you can see how the 5-year plan will build over long-term shareholder value. Now, as mentioned, we're targeting a doubling of our multiservice customer base from approximately 500,000 today to 1 million by FY '31, delivering the enhanced variable contribution and customer lifetime, which results from that growth. Now to understand the impact on FY '31 relative to FY '27, we start on this slide with the midpoint of our indicated FY '27 adjusted PBT range of GBP 80 million to GBP 90 million, which we'll come back to later.

Now, as we said earlier, multiservice customers provide a variable annual contribution of over GBP 185 each. Now, we expect to double the number of multiservice customers from approximately 500,000 in FY'26 to 1 million in FY '31. Now given that we expect up to 75,000 of such customers to be added in FY '27, then between FY '27 to FY '31, we plan to be adding approximately 430,000 of them whilst keeping the number of single service customers broadly stable. So that means an incremental variable contribution from the focus on multiservice customers of approximately GBP 79 million per annum by FY '31 relative to FY '27. In addition, there are around GBP 20 million of expected operating cost savings net of inflation from our digitalization plans.

Taken together, that would take us to our adjusted PBT target for FY '31 to around GBP 175 million after including a contingency given that we're looking 5 years out. And in addition, to the increase in quantum of profits. Critically, this plan delivers a significant increase in the quality of profits given that it is driven by a doubling of high-quality multiservice customers from 500,000 to 1 million over the next 5 years. These customers will each provide 1.8x more annual variable contribution than single service customers at GBP 185. And in addition to that, the average multiservice customer has 1.7x the lifetime of a single service customer at 13 years.

On top of that, we actually expect the makeup of the multiservice portion of the customer base to evolve and improve as the plan progresses as we cross-sell to more customers and sell more insurance. Now, for instance, we expect the growth in the number of 4 service customers to be faster than the growth in 3 service customers and so on. Now, that further mix change within the multiservice space would increase the average lifetime of multiservice customers from 13 years to 15 years over the course of the plan. Now looking at the overall plan that will arrest and reverse the current deterioration in customer mix that we've been seeing.

The expected lifetime of our customer base in FY '31 will therefore be around 35% longer than the average lifetime that the overall base would have in 5 years' time if we simply left the current trends to continue. And of course, with that increase in customer lifetimes, we expect lower churn, lower bad debt, greater economies of scale, and lower cost to serve from that evolved customer base over time. And that's why we firmly believe that this is the right course of action and the right plan to create shareholder value. As Stuart has already mentioned, and we'll be demonstrating later by describing the results of trials that we've been undertaking, we had a high level of confidence in delivering the plan. Stuart?

Brilliant. Thank you very much, Nick. So now let's go through the actual detail of the plan itself. I'm going to kick off talking through how we will optimize our multiservice proposition before then handing over to some of the team to talk through the other 3 pillars. And there are 4 proposition areas where we intend to focus. First of all, sharpening our price investment. Second of all, implementing a market-leading cross-sell capability. Third, building out insurance as our fourth core service. And then finally, relaunching our small business offering. And you can see the metrics I'll be looking to move over on the right-hand side. So looking at each of these in more detail, starting off with price investment.

Now, ensuring that our multiservice proposition is compelling to customers on the way in and provides peace of mind value over time is key to building a long-term multiservice customer base. Now, given the competitive dynamics we discussed earlier, plus the fact that multiservice customers have such a high value, we'll be making targeted price investments across all of our core services and the multiservice bundle itself for both new and existing customers. Now, Nick mentioned this earlier, I can't signpost in full to all of our competitors exactly what that pricing strategy will be, but it will include carefully targeted investments across the following areas. Underpinning our energy competitiveness with more competitive fixed tariffs and a new tracker tariff.

Repositioning our broadband offer at the competitive front end. Continued investment in our market-leading mobile offering. Extra sign-ups or welcome bonuses for new multiservice customers. Adding new features and rewards into our Cashback Card. Broadening the range of recontracting and retention offers across a bundle whilst also ensuring that our in-life prices are competitive for our long-standing loyal customers. And these price investments are expected to drive a significant increase in our rate of multiservice customer growth. We're targeting over 10% increase in our multiservice customer numbers in FY '27, the current year, and a doubling to more than 1 million multiservice customers in total by FY '31.

And the price investment will be focused not just on driving multiservice itself, but in particular driving those highest tiers of multiservice that Nick talked about given those outsized lifetimes and value that you get from 4 service customers and the target that Nick mentioned of shifting the mix within multiservice towards 4 service so that we see the average multiservice customer lifetimes rise to 15 years over the course of the plan. And as we build out and implement these price investments, we'll also be building out a more, what you might call, intelligent pricing engine to enable more sort of bespoke data-driven pricing which will support our cross-sell plans and in particular our insurance pricing strategy. Both of which we'll come back to later.

So that's the pricing investment across the bundle to ensure that the proposition is compelling even in a more competitive marketplace. Let's now turn to how we plan to supplement this by building out a market-leading cross-sell capability. Now, as mentioned earlier, our Partners have this unique and proven ability to drive multiservice uptake for new customers on day 1. But motivating customers to add additional services to their bundle in-life is an opportunity that we've just simply not yet maximized. Around 60% of our organic customer base today is still single service. Only around 3% of our current customer base today takes 4 or more services. So cross-sell into our existing customer base, it's effectively a greenfield opportunity.

The value from cross-sell from single service to multiservice is significant. We've touched on some of these earlier, but as we went through, the step up from multiservice results in 1.8x the contribution and 1.7x the lifetime on average, plus those particular opportunities of, adding 10 years of lifetime as you take someone from 3 services to 4 services by adding insurance. And of course, even though it's a greenfield opportunity, we don't begin from a truly standing start. Following the acquisition and migration of those customers from TalkTalk, we were able to upgrade and cross-sell around 14,500 customers over the course of last year.

Now, this strong performance was possible without all of the various capabilities needed to be best-in-class being in place. So, accordingly, our confidence is high that as we build out those capabilities and deploy cross-selling across our whole base that we'll see material further progress and upside. So how will we deliver that cross-sell momentum and shift the value of the customer base? Well from the outset with an annual target of at least 50,000 service cross-sells, we'll be increasing the intensity of cross-selling across the existing customer base using those learnings that we've got from our TalkTalk trials. This will include more regular direct digital campaigns across all services as well as activating our Partners. And this will also be in place to support new product launches like motor insurance later in the year, which we'll come back to.

With this momentum established, we'll begin adding data-driven sophistication to it with specialized, what you might call, AI agents offering personalized digital cross-sell journeys for existing customers using things like tenure and service behavior as triggers amplified by prompts to convert through the app, through the contact center, and through various Partner touchpoints. Now, as trailed earlier, these multiservice data points we have on our customers means that we have deeper insights than our competitors do. And that creates real opportunities for this sort of AI-driven cross-sell to outperform industry norms.

For example, we already know that if you've downloaded and used the app, then you're 3x more likely to respond and add another service when prompted. We already know that you're 4x more likely to switch a service to us if we contact you within a certain time window of your renewal for that service, enabling us to do things like capture renewal dates for the services we don't provide to you and then market to the customer at the right moment. And this is just the beginning, just a couple of early examples. By 2031, as you know, we're now targeting 1 million multiservice customers. And by this stage, cross-sell will no longer be a campaign mechanic. It'll be a continuous AI-driven program running across digital Partner service channels simultaneously with 50,000-plus service upsells a year being just part of how we operate.

I mentioned it earlier, but 1 of the services that is perfectly set to benefit from this cross-sell opportunity or this capability is insurance where we're focused on turning this massive opportunity into our fourth core service. So, let's now take a look at how we will do that. UK personal lines insurance, our target market here, it's a GBP 40 billion-plus market and it's characterized by poor retention, commoditized pricing, low trust. They're exactly the conditions where a differentiated relationship model like ours wins. Now there's a key reason why we're so excited about the opportunity in this marketplace. You see, typically insurers price risk from the outside in. They take your postcode, your credit score, your declared behavior, and so on. But we have a unique opportunity to price from the inside out.

See as mentioned earlier, we know our customers' behavior across energy, broadband and mobile. Even their Cashback Card spending habits. We understand their home stability, their payment reliability, their tenure across multiple services. The cross-bundle sort of data sets that we hold in our customers is effectively -- and you think as a proprietary risk signal providing a unique right to win and our existing customer base represents potentially therefore a largely untapped pool of pre-qualified, high-tenure insurance prospects giving us a structural underwriting and pricing advantage that no pure-play insurer can replicate.

So how far are we on our insurance journey? Well, over the last 5 years, we built out our insurance ecosystem, building both a broker and an internal underwriter to give us control over the product design and pricing. Our broker is fully FCA regulated in the UK, whilst our underwriter is established in Gibraltar, fully capitalized for growth and regulated by the GFSC. We've launched a home insurance product and a boiler cover product as our sort of core insurance products.

We have around 113,000 policies in force and that represents, I think, just under 8% of our current customer base. Now over FY'23 and FY'24, as you can see on the chart on the right, we saw rapid growth in insurance services or 140% growth in the number of policies being taken out. However, you'll also recall that this came to a halt with the voluntary pause in new sales of insurance products whilst we were in dialogue with the FCA around 1 of our non-core legacy products. Now we restarted insurance sales early in FY '26 after a positive dialogue with the FCA but as the graph shows here, growth is yet to recover.

Now in that intervening period we've built out the team and we now have a clear plan to drive scale and insurance, including leveraging the unique data sets that we already hold on our customers that I just spoke about. So how exactly will we do that? Well, here are the 3 steps we're going to take. First of all, we're investing in replatforming our insurance business onto OpenGI, which is a more comprehensive insurance platform, which will broaden the panel of underwriters that we're able to work with, whilst also provide a more sort of modern, slicker platform for launching new products. We'll also be strengthening our pricing of both acquisition and renewal and increasing the sophistication, intensity of our insurance cross-sell campaigns, leveraging the capabilities we spoke about earlier.

Secondly, we'll be launching our first motor insurance product in the second half of this year. This moves us into an additional sort of roughly GBP 22 billion marketplace for a product which is an essential purchase for nearly every household in the UK. Now, this is going to be our first major new product launch in around 5 years and has the potential to drive significant penetration into our existing customer base. If you simply assume 1.5 cars per household and just 8% penetration to match our existing insurance penetration rate, that could amount to over 200,000 policies over the next 5 years. Now, looking further ahead to FY'28, we expect to extend into Pet with then Travel and Life as potential followers, we'll be aiming for 1 new insurance product launch per year.

And then finally, we'll be leveraging these data advantages that I spoken about earlier to really power growth across each of these sort of insurance product lines. Just to give you another example, we've identified a correlation between energy usage patterns and home insurance claims. And this is a data point that nobody else out there can see and nobody else can therefore price for, but we can. To give another example, we will be able to see when our existing customers are shopping for insurance online, for example, on the price comparison side, which is where most households these days shop for their insurance. And we'll then be able to quote for them on that price comparison side, knowing that they're an existing customer of ours for other services and with the benefits of what we already uniquely know about them, all of those different behaviors and sort of insights that I mentioned earlier, plus the knowledge that they'll be deepening their multiservice relationship with us with the increase in lifetime that comes from that.

So hopefully, now you're beginning to see and share some about the scale of the opportunity ahead in insurance and why the sort of the feature of this business are really well set to leverage that. By FY '31, we expect to see insurance as a true fourth core service. We'll be targeting sort of 20% penetration of a much larger customer base, generating significant gross profit and materially extending customer lifetimes.

And then the last of the elements of this pillar is the relaunch of our small business offering, which is focused on micro businesses. This is a large and highly adjacent marketplace where we have a very relevant proposition and also the experience here to know that we can play to win. There are around 5 million of these micro businesses in the U.K. We're talking about these are local businesses employing fewer than 10 people, local shops, hairdressers, estate agents, just sort of high street premises, many of which are run from these dedicated premises and they need energy, broadband, mobiles and insurance. These own and run local businesses are a real obvious add-on to the core residential offering that we already have.

In many cases, our partners might actually be the small business owner or they know the people who are running these businesses. Some of these business owners may already be residential customers of ours. And small business owners typically have utility needs that are very similar to those of a residential customer. Now we've historically signed up and serviced these small business customers even without a fully fledged small business proposition. We built up to over 25,000 small businesses in the past, almost by accident, but stopped actively seeking them out during the energy crisis back into 2021, 2022, given the scale of the residential customer growth opportunity that was there at the time.

As a result, the number of our small business customers today has dropped from around 25,000 to 10,000, but we're working on relaunching this offering to the market next year, and we view this as an exciting additional opportunity to really broaden our target markets and provide an additional stream of leads and income for our partners. To frame the size of this opportunity, at its peak, between 5% and 10% of our new customers being signed up each month were small business customers on this. So that's the first pillar, all focused on optimizing our multiservice customer proposition. Now over to Justin to talk about our second key pillar around how we take that multiservice proposition to market. Justin?

Thank you, Stuart. So I'm Justin Bozzino, and I'm responsible for leading and managing our network of partners. Now you've already heard from Stuart how Team Purple, our partner network is so important. Quite simply, that's a reason we're able to sign up so many multiservice customers, building a happy, long-term, high-value customer base that nobody else could match, a wide and deep moat around the business model. And we have a 3-step plan, how we're going to really scale partners, fulfilling this channel's unique potential and driving our multiservice customer base to 1 million by FY '31. And these 3 steps are all about opening up the opportunity for more people to be a partner so we can double partner numbers over the next 5 years, providing a best-in-class digital experience to make it easier for partners to succeed and be more active more often and putting in place strategic partnerships to broaden our access to high-quality customers across the country.

So firstly, it's about building the tracks that the partners of the future can run on. What does that mean? Well, today, we have, in essence, one way to earn, the UW partner. you join, you do training, you generate leads, you sign up customers, sign up other partners and help them get going. It is an incredible model, one that's been at the core of our growth, as Stuart said, and we are absolutely committed to it. However, it's not how everyone wants to earn. It requires you to be all in with us when perhaps you don't want such a committed relationship at least at the start. So we're going to be launching 2 more ways to earn. The first, we're calling customer-focused partners. So we have lots of people who love talking to customers, but are not so keen on building teams of partners.

And that's a core part of the current partner proposition. These partners just want to get on with recommending our multiservice proposition to people they know. And so we want to build a track for them to succeed their passion, sharing the increasingly compelling customer opportunity Stuart was talking about. And the second, we call connectors, and they're like affiliates. Now this is a really well-developed market, very digital, very social media-friendly and it taps into the influencer market, both small and large. It's not one we're a meaningful part of at present. However, plenty of people want to refer us but don't want to complete the sale. And conversely, there are plenty of partners who are excellent at explaining what UW does, but can run short of people to speak to.

Well, this opportunity marries both of them up. So the really good news here is that we launched the pilot last year, just getting the proposition out, letting it organically grow. And the quality of customers that we gained from this pilot was excellent, over 2,500 customers, 88% on multiservice. So we know there is a demand. There's a plethora of businesses, charities, PTAs and people who want to do this. So over the next year, we're going to really beef up the journey, communications, incentives, experience and so on to make them feel a real part of UW. So those different tracks, not only do we increase the overall numbers of partners, but we also increase the range of people we can reach. As Stuart said, having doubled partner numbers over the last 5 years. Now we're looking to essentially double again over the next 5. So 150,000 seems eminently achievable with these tracks.

And second, it's all very well having these partners, but it needs to be regularly active. And in that respect, we can draw on some reliable and mature industries to really energize the network here. Firstly, gamification. And we do this already. We do it pretty well. For example, with our Free Energy Club, where we currently have over 600 partners on a street-based incentive. But it's not quite as joined up as it might be, and it also is really digital first, and that's what we will be investing in. Think of all the nudges you'll serve to keep you active on Strava, Duolingo or whatever your app of choice is. We're going to be leveraging those insights to build out the journeys, nudges, recognition and so on, so we can significantly increase the engagement and therefore, activity from partners.

Secondly, removing the friction in signing up to utility warehouse. And multiservice bundles by their very nature, include multiple options in each service and within each bundle. And this can trip up customers and particularly newer partners, which is why we have a budding system with experienced partners supporting new partners. That's been really successful, but it hinders explosive growth if we have to rely on it. Emerging copilot technology is going to be key here. So instead of having to rely on an experienced supporting partner, they can have their questions and objections answered by our own copilots, enabling partners to do what they do best, recommend without having to be utility geeks. And we're using an early version of this called Askmii, which is already managing 1,400-plus queries a day from our partners. And that's what Stuart meant when he said, we won't be disrupted by AI. We'll use AI to keep disrupting others.

And third, we're building out significant digital expertise, which we'll use to allocate inbound leads for highest converting partners based on skill set, demographic, geographic area and so on. This architecture can also be used for partners to cross-sell to single-service customers, further increasing our services per customer at a low cost and high attachment rate. Our goal here is to increase the number of partners who are active each year in signing up a customer from 20,000 in FY '26 to over 40,000 in FY '31. And to move that, we need to move the number of partners who are signing up a customer in any 1 month, and we're targeting an increase of over 10% this year versus the second half of FY '26.

And finally, our recently launched strategic partnership builds on the other elements in the plan. We've already signed up the National League with its 72 football clubs, which make up the fifth and sixth tiers of English football. But we chose them as strategic partner very deliberately because they have fiercely loyal and local fan bases. These are clubs like Chester, Weston-super-Mare, so they're perfectly matched to our local partners. For every supporter who signs up for a partner, we're making a contribution back to the league, which helps support clubs and the communities around them. And any new multiservice customer gets a voucher to spend in their teams club shop, so for a new club shirt, and that puts money directly back into the coffers of their team. All of that is incredibly powerful.

Our national league partnership reflects the brand values, which David is going to talk about and crucially our local presence in every club. We talk about being in your corner and around the corner. And you can see in the image there, our brand sponsorship at Wembley for the National League playoff final a few weeks ago. And following on from this, we've recently signed an agreement with the post office. We're trialing space in several post offices with partners actually in store all day in a smart conversation with your bank manager type space, and that's something only we can provide authentically.

They'll be speaking to customers about how they get a better deal on their home services, and we'll reach places other suppliers could not hope to reach. It's a big pilot to revitalize the High Street, and we are a key part of that with the services we offer and how we reach the public. Now we can afford to be picky here and really choose the best partners, learning from these trials with the post office and national league and our general learnings from connectors. Over time, we expect to build up a handful of similar relationships, ideally with organizations that have both national reach and local presence and with whom we can work to build on our partner-led customer base, which brings us on to our next key action area, building out a nationally recognized and trusted brand, which David is going to talk through.

Thank you, Justin. So I'm David Walter, chief commercial officer. So pillar three is all about building a nationally recognized and trusted brand. Some businesses have a problem because they overpromise and they underdeliver against those promises. But for UW, the issue is really quite different to that because we have outstanding customer satisfaction, a really high level of trust amongst our existing customer base, but almost no one outside of our customer base really knows who we are. And this plays out in our brand funnel, as you can see here, where we have genuine awareness at 22%, consideration at 11%, and amongst the overall UK population trust of just 10%. And this really narrows the growth audience because if you haven't heard of us, you're really much less likely to trust us to provide those essential services into your family and into your home.

Now, our partners, as Justin just described, are really tenacious in turning that around one conversation at a time, but it's a headwind, and it's a headwind that just doesn't need to be there. Our brand refresh very deliberately puts partners front and center. We believe in the power of people helping people. It's a brand idea that we can really own. It's emotionally distinctive and most importantly, it directly connects the reality of how our partners show up and how our service teams show up for customers every single day.

So building our brand will remove that headwind that partners are faced with when they strike up a conversation. But more than that, it's going to drive partner pride, partner recruitment, partner confidence, and the lead conversion of prospective customers into actual customers on the books. I guess the message is that building a nationally recognized and trusting brand isn't a soft metric. It's not a soft metric. It's an essential part of the growth ecosystem at Utility Warehouse. We launched the brand refresh to customers, partners, and staff in April. And we also ran a pilot campaign so that we could gather some data on how this would play through and how it would land. And the findings have been really exciting. What we saw from the pilot was a 4 percentage point increase in brand awareness and we saw a 10% increase in customers gathered by partners in the pilot areas relative to the control areas.

I'd love to give you a sense of the brand direction that we're taking. So on the left here, you can see how the brand identity shows up on our website, and on the right, we introduced our new brand ambassador Cat Deeley. Now Cat today is an integral part of the partner appointment where we use videos like the one I'd love to show you now to explain our proposition to customers.

[Presentation]

And here you have a still from the pilot campaign that I mentioned a little bit earlier. So it highlights that special role that partners are playing as a friend, as a neighbor who really can't help, but help. So we position it here saving you hundreds of pounds on your household bills, but really doesn't look like any utility company that you've ever seen before. So let's talk through the plan that we'll execute to build this nationally recognized and trusted brand. We'll be taking a local-first approach to building national fame. So we'll go town by town where our partners are most active and we'll be leveraging out-of-home and hyper-local activations. And this will pair together with a focused investment in national media so that we really effectively prime the pump for partners.

What we'll be optimizing for is awareness that compounds into partner confidence, partner performance, and the ability to convert leads into new customers. A brand headwind that we flip around and turn shift into a brand tailwind. So as a result, genuine awareness will rise over time to 50%. Trust will rise to 33%. So that our brand fame opens up the opportunity and partners close it. So there we are. And now let's move on to the fourth pillar and the final part of the plan. How we will deliver a digital experience underpinned by AI with market-leading cost to serve. I'm going to hand over to Rob who will talk us through this part of the plan.

Thank you, David. Good morning everyone. I'm Rob Harris, chief operating officer. Customer experience at UW has been historically strong and often award-winning. Just last year, we gained the Which? Recommended status for both Energy and Broadband. Whilst our customer experience has been very strong, it's also been very traditional, almost solely through telephony. Today, customer and partner expectations have changed and digital capabilities have advanced dramatically. Many of our competitors use the 2022 energy crisis to replatform and transform their digital assets. During the same period, as Stuart mentioned earlier, at UW, we prioritized maximizing growth. Now, is our moment to transform.

Our plan is not only to progress our digital capability to match the best in market, but to leverage AI to leapfrog this last generation of change. But it's how we bring this to life that really matters. Now, I was leading the retail market, the retail network at Barclays when we launched the first banking app. We used our branch teams to educate, support, and demonstrate what our customers could now do without waiting through this new app. It was those teams that created the shift in customer behavior. Our partner teams at UW are unique in our sector and they'll perform exactly the same role ensuring pace and depth of digital adoption. Our approach has switched from being voice and agent first to digital-first, which transforms both where and how our customers are served. We'll soon offer omni channel assistance, meeting our customers where they are and how they want to be served, either in-app, online, through chat, WhatsApp, and of course, through email and telephony channels, enabling our customers to solve problems on their terms when and how they want.

This omni channel model enables us to make the shift from a reactive service model to a proactive one. We're also transforming how we serve our customers. We're making the shift from a homogeneous service where everyone receives the same level of service to a value-based model much like what is common in banking, airlines, and hotels. So our most valuable and loyal customers will receive a differentiated level of service with teams focused on retaining, growing, and optimizing, thus improving experience, value, and cost to serve. Rather than teams simply processing requests and answering queries, we're creating intelligent next-best actions. Using this unique multiservice data that we have on our customers and leveraging that, combining it with external insights, we can deliver personalized offers, personalized prompts to help our customers get the best of UW.

Now much of this capability will be leveraging AI. And we now have a dedicated agentic team that is currently designing and building specialized agents that are quickly resolving the most frequent queries our customers have and often solving issues before our customers even recognize them. We'll be using these agents in both the front, middle, and back office to drive improved value, improved experience, and efficiency. The agents remove complexity from pretty sophisticated workflows, removing friction from our system and thus dramatically reducing failure demand which is expensive and thereby accelerating the speed of resolution for our customers.

We expect digital interactions, those with no human intervention, to increase from below 10% today to in excess of 65% by the full-year 2031. These changes will not only deliver a step change in customer experience but significant cost efficiency too. Our admin cost per service type is targeted to reduce by around 30% post-inflation over the same period. And on this next slide, we bring this to life. These are the costs associated with customer operations. Essentially, our variable costs. You can see how this program will broadly offset the additional cost of servicing customer and service growth as well as inflation over the period to full-year 2031.

Our fixed cost will remain essentially flat over the period as will our payroll. So, as our cost base remain flat, but our cost per service materially reduces. AI is at the heart of our digital-first strategy, but what we're talking about here is more a fundamental modernization of customer experience at UW. Let me bring to life how we're using AI to accelerate that shift. The multiservice proposition in many ways is a perfect use case to leverage AI. It's perfect because it's so rich in data and it's also pretty complicated to deliver. Well, AI will help us leverage our data to generate greater value and simplify complicated processes. We've already touched on how this will play through with revenue generation through enabling cross-selling or supporting enabling our partners more effectively. But for our customers, we're making progress now and we'll deliver material benefits this year.

I've set out a number of initiatives that are either in pilot or early rollout. To call out a few regarding our quality and compliance, we have three regulators at UW. Our compliance framework is complex. We're currently training AI agents to mark and score interactions. This will give us 100% coverage and real-time agent feedback as opposed to the current analog model which covers under 10% of all interactions. This new solution will always be on and requires less than 10% of the existing team. We also have agent Copilot. This is an AI-powered assistant embedded into our agent systems listening to calls. This supports the agent in real-time, providing knowledge, service, and sales prompts live on the call with our customers. This enables us to develop true multiservice agents, speeding up support and enabling our agents to deal with more complex requests confidently.

Our voice and email channels are currently piloting agentic agents. These are AI voice agents answering simple queries in real-time. We also have the same equivalent on email that are directly responding to our customers' requests. Again, increasing the speed of resolution and dramatically reducing wait times for our customers. And with regards to software development, by the end of this current financial year, our technology teams expect AI to be writing around 20% of all code. These changes will lead to a material shift in productivity, quality, and customer experience. They'll also enable us to reduce our admin costs by around 5% this year.

Genesys is our customer platform provider. So, all chat, email, and voice interactions run through this software. We're really pushing them to innovate and enable us. And as such, they've awarded us the pioneer of 2026 just last month. Mainly, I think, because we're the biggest user of Copilot across Europe and the first globally to go live with agentic agents. We're embracing this new wave of AI and seeing firsthand how it's enabling us to improve the speed and quality of experience at a lower cost. The nature of the multiservice model really lends itself to leveraging these capabilities. So there's much more to come in this space. Back over to you, Stuart.

Brilliant. Thank you very much, Rob. So there you have the plan. So now let's talk about delivery of the plan, starting with what we expect the business to look like in FY '31 after successful delivery. Now, we've talked about all of these things as we've gone through the presentation and the update today. So I won't go through it line-by-line, but I'll call out a few highlights. Hitting 1 million-plus multiservice customers is of course a key metric, but all of those other key operational metrics here are really important in making sure we build out the ecosystem or the platform that will set us on our path to our next multiservice customer target once we break through 1 million.

And critically, with the multiservice mix evolution we expect to see during the course of the plan as we focus on bringing in more customers all the way up to those higher tiers of three and four services. We expect the average multiservice customer lifetime of those million customers will be around 15 years. The 2 million customer total customer target is still there, but the focus is absolutely on growing the multiservice customer base with the 2 million total customer target being a secondary measure over the medium term. And you can see the strong financial metrics at the bottom of the slide as well. But the key here is that because of all of those key operational metrics being hit, the quality of the earnings that results is incredibly high, underpinned as they will be by the long lifetime multiservice customers and a business that is really playing to its strengths.

Now, in terms of tracking progress and delivery against the plan, we've got a number of key progress metrics, I'm calling them, that we've mentioned during the presentation. Now, I'm sure you'll hear lots of ambitious 5-year plans promising stellar growth and returns, but first up, this is a refocus on our proven strengths, not a wild new strategy. And secondly, we want to be completely transparent with you about how we're progressing, which is why we will report on these metrics at each full and half-year results update while the plan is running so that you can really measure how we're performing against our targets and really track progress against delivery of the five-year plan.

I don't plan on running through them again here, but you can see them all set out on the slide. And there'll be both the FY '31 target, but also each year that comes, have a year-ahead target, and obviously set out on here you have our FY '27 target, and in terms of what that all then means for the current year FY '27, you can then see our outlook summarized on the next slide. We plan to achieve at least a 10% increase in multiservice customers, which is a more than doubling of that growth rate in multiservice customers compared to the 3.9% growth rate we saw in FY26.

The investments that we've talked you through today will impact profits in the short term and we expect adjusted profit before tax this year FY '27 to be in that range of GBP 80 million to GBP 90 million. Note that our H1/H2 profit split will be roughly 15%-85% due to the timing and phasing of those planned investments across the year, which will broadly follow our revenue split 40%-60% H1/H2. There's a slide in the appendix of the deck for people in the room. For people not in the room, that they can find on the website and we can also cover that off in Q&A as necessary.

We intend to continue to distribute at least 80% of adjusted profit after tax to shareholders. As we set out in our trading update in April, we intend that at least 50% of that distribution to be by way of dividend with the balance allocated to share buybacks if our forward PE is below 20x, otherwise by way of special dividend. The investment plan for FY '27 will also see our leverage ratio rise modestly, but we expect it to remain at a very comfortable level for a profitable growing business providing essential household services at about 1.5x before coming back to 1.0x as we go.

And as we move through the year, we expect to be able to show that we're making really strong initial progress with delivery of our 5-year plan, taking tangible steps to really refocus on what makes this business special, multiservice customers and the high-quality compounding growth they deliver. I mentioned this early on. Critically, this is not just a plan on paper. It's a plan grounded on reality and deliverability. And as you can see here, over recent months on the left-hand side, we've been trying a number of early-stage initiatives. And the early indications from those initiatives are already very promising.

First of all, we've already seen over on the right-hand side our multiservice customer growth rate in the first two months of the new financial year. Off the back of these initial trials and tests we've been doing, more than double from that 3.9% growth rate last year, FY '26, to an annualized rate of 9.7% across April and May. And that trend is actually continuing and actually accelerating as we move into June.

Second, we've begun to see insurance returning to growth over the last few weeks. In fact, it's early days, it's small numbers, but the tide is turning. Third, our partner activity rates have been increasing. I mentioned earlier the significant increase, the 4,000 increase we've seen in total partners in the last few months, but our activity rates are increasing as well. Monthly active partners, which provides an early indication of the improvement of yearly active partners, is up 15% in the last two months compared to the second half of last financial year.

And then fourth, as David mentioned earlier, we ran a pilot or a trial of local advertising utilizing some of the new brand positioning and we saw a 4 percentage point increase in brand awareness and 10% increase in customers gathered by partners in the pilot areas compared to the control areas. So collectively, these early-stage positive signals give us a high-level of confidence that this is the right plan and that the plan will deliver. So we've stepped through the 5-year plan in detail and shown why we have high levels of confidence in delivery and we also have the experienced team in place to implement and deliver on it with decades of experience both in the business combined with extensive external experience at other leading businesses. Now you've heard from some of the team today and others are in the room and you may hear from them in future updates and presentations. So before we move on to Q&A, let's return briefly to where we started and the key takeaways.

In essence, we're prioritizing and focusing on growth in multiservice customers rather than simply total customers, given that multiservice customers are our special feature, the core of our business and the key driver value. Our plan is to double the number of these multiservice customers to 1 million over the next 5 years, leveraging our unique business model with its 30-year track-record. This plan will involve P&L investment of GBP 55 million a year over the course of the plan across four key pillars. Optimizing our multiservice proposition, scaling our partner sales channel, building a nationally recognized and trusted brand, and enhancing our digital and AI capability to improve both the customer experience and drive down costs.

Delivering on this plan and doubling our multiservice customer base will not only result in targeted adjusted PBT of around GBP 175 million by FY '31, but critically these will be higher-quality earnings generated from a loyal and secure multiservice customer base with market-leading lifetimes of up to around 25 years as well as lower bad debt, lower churn, lower cost to serve and with average multiservice customer lifetimes increasing during the plan to 15 years. Taken together, the actions that we'll be taking will result in a strong, competitive, profitable, and growing business designed to embrace the latest technology and growing its high-quality earnings through focusing on its unique strengths.

And as I mentioned, critically, it's not just a plan on paper. We're already seeing some tangible positive signals from these early-stage trials, giving us high confidence in delivery of the plan. And together with soon. I can't wait to get cracking and get Telecom Plus really motoring again. Thank you. We now have time for Q&A. I think Nick is going to join me up on the stage. I'm happy to take questions both on the strategy update in new 5-year plan we've just been talking you through, as well as of course on our FY '26 full-year results. There's a microphone in the room. So, if you could please raise your hand for a question and the microphone will appear.

Lovely. Thanks Charles Hall from Peel Hunt. Stuart, could I just start on the single service customers? Obviously, there's been a lot of focus in this in multiservice, and you're expecting single service to be broadly flat over the 5-year plan. How confident are you that you can keep it flat if all the emphasis is going on to multiservice, both in terms of pricing and initiatives with partners?

So we still expect that we'll be signing up new multiservice customers as we go forward. Multi single service customers -- single service customers as we go forward, and we also continue to generate single service customers from home moves. Which is a dynamic where a multiservice customer that we currently have in one property, they then move to another property, they leave their energy service behind and a new single service customer comes in. So both the fundamental will still be just as part of the general new customer sign-up mix, some single service customers, and it'll also be a group of single service customers that just appear from that home move dynamic.

I think we're actually relaxed if that number is slightly below broadly stable or whether it's slightly above broadly stable. The key focus and the value creation comes from the increase in the multiservice customers over the timeframe. That absolutely is where the focus is. But for those two reasons, we expect to see single service customers continuing to be added into the mix.

And one of the notable charts had multiservice churn actually coming down last year. So the issue was very much on the churn side was very much in single service, and so you're saying that you're happy for that single service churn to remain high because you're not putting as much emphasis into them?

Those single service customers, they're still profitable for us and they still have a reasonable lifetime, and certainly a higher lifetime than most competitors of ours will have for their single service customers. So they're not bad customers. They're just not the unique customer type that we're able to generate through our partners multiservice customers, and the customers are really worth investing behind and building this business around.

And then you split out that multiservice versus single service churn. Is that why you're looking at putting the price emphasis at the new customers rather than on retention?

So the pricing investment will actually be split across a few different areas. It will be split across both each of our individual services at the front-end across, which will be roughly a third of the price investment, on what you might call multiservice incentives. So incentives beyond the pure price of the individual tariff or the service to take more services. So what you might call a welcome bonus or a broader bundle incentive, and then roughly a third are what you might call recontracting retention loyalty benefits for existing customers. So there'll be a spread across all of those. It's not just at the front-end.

And then Nick, the contribution, the GBP 185 that you highlighted. Can you just walk through how that's being calculated and how much of the initiatives that are coming through contributing to that moving over time, like adding insurance products?

Yes, absolutely. So that is a variable contribution. So in other words, you've got the revenues from that additional, imagine an additional customer coming online. It's the incremental revenue, the incremental raw cost of sales, the incremental bad debt, commissions paid to partners, the incremental operating costs as well that were associated with bad debt. I think I might have mentioned that actually at the FY '27 level of costs. So for instance, within that number is not the digitalization benefits that we are expecting to get. That's the first point.

The second point is that within that number, we've got that number for FY '27. We've used that in the construction for FY '31. So it does not include, for instance, general price rises over and above -- which are inflationary for instance, on the one hand, and it also is assuming that within that multiservice mix that the mix of two service, three service, and four service customers is exactly the same. When actually we know that there is upside from the fact that we're going to with the relaunch of insurance and the various initiatives and the pricing initiatives we've talked about, that mix will change in favor of three service and four service customers that the upside associated with that is not within that variable contribution number if that makes sense.

Yep, that makes sense. And then you also talked about small business opportunity. How would they compare in terms of the multiservice mix and the contribution?

So they're obviously a small part of the embedded contribution at the moment. Very, very small part. Obviously, as those plans develop, that will also be incremental upside to that. Yes.

Hello. It's Michael Donny from Investec. Two for me, one for Stuart, one for Nick. Stuart, when you looked, as I'm sure you did, at what Octopus and OVO was investing in for their growth, was there anything that you specifically saw and thought, No, I'm not going to do that. That's not right for our business? Or is everything that you can see them doing to drive their growth matched on to your 4 sub bits of your 55? So that's question 1, and I'll do it.

Okay. So, while of course we look at what other people are doing in our marketplace, and the competitive shifts in our marketplace is obviously something we talked about today. We are competing differently from them. So they are trying typically to sign up single service customers and they're therefore prioritizing what they're doing with that mindset. We're an energy supplier signing up single service customers. We don't think of ourselves as just an energy supplier, and we're not prioritizing signing up single service customers.

So our -- the way we've actually thought about and constructed our plan is based on the unique features and fundamentals of our business model, which actually don't really map that closely to their business models because they're typically very similar to each other, and we have, we're differentiated in a number of ways. So, our plan is a bespoke Telecom Plus plan based on investing in our proven strengths and the critical pillars. We've already got the last two months showing that the initial trials of the decisions that we've taken and put into the plan are working, which gives us the confidence it's the right plan as well.

That's great. Thanks. And then for you, Nick, can you just building a bit on Charles's question, can you talk us through the main leakage points between what you're calling the contribution level and the adjusted PBT and how -- what might surprise us about the difference between those two numbers over the five years of the plan because I'm not totally sure I understand the contribution bit just yet.

Okay. So the contribution bit, the most important thing is it doesn't include fixed costs. It only includes the variable contribution piece. So just to make sure that that's absolutely clear that includes the revenues, including by the way, the discounts that we are providing. So it's an average of the first-year discount that is provided say in the first or second year, and then the ongoing pricing. So it includes the discount that we are providing to customers embedded within that. You've got the raw material costs associated with the provision of those services that we pay to our wholesale partners. You've got the commission that we pay to our partners because that's of course is variable, and you have the bad debt associated with those customers, which is also variable.

So those are the individual dynamics that are within there, but it is taking the FY '27 number just to explain in terms of the overall rules. So it's looking at the FY '27 mix of multiservice customers as things stand as of now. But when insurance comes, insurance which is back in growth mode, and as we put in those additional insurance initiatives into play, the mix of the four-service type mix within multiservice, which comprises two, three, and four. Four will grow faster than three-service types. Three-service types will grow faster than two-service types. And as a result of that, that upside is not captured into that static number that has been used. I don't know if that helps clarify what the positive is on the upside.

Yeah, I think positively it does help us think about how what that line's going to look like in 5 years' time. Okay, I'll leave it there. Thank you.

Alex Smith from Berenberg. Just a quick one on that GBP 185 number. Just kind of what the contribution energy is to that overall number in terms of the mix and the nominal number I guess, and I assume that is the largest contributor, and therefore I guess in the short term, is that the biggest hurdle to almost deliver savings there given the competition in energy markets, and I guess what's stopped competitors also beginning to deliver extra cost savings for customers like your Octopus?

So I think first of all, at the moment, we apply our energy discount -- our multiservice discounts are loaded against energy and they're obviously set at a certain level, and that is effectively built in, as Nick said, into that GBP 185 number because it's looking at things today. Over the course of the evolution of the plan, that could change. We could either change the way in which we deliver those discounts so we could shift away from energy, or we could change the level of the discounts within energy. And both of those are absolutely options.

The way that we fund our discounts though is through two places. First of all, it's the additional margin that we get from the additional services that a multiservice customer takes out. And second of all, it's the broader benefits that we get from that multiservice customer in terms of what you might call the operational savings that we get from spreading multiple revenue streams across one set of overheads, plus the lower bad debt, the lower churn and cost of replacement, the lower cost to serve that you get from looking after a multiservice customer. So, we're funding our energy discounts in the current structure in a different way to how someone like Octopus or OVO or whoever will be funding that. And so therefore, I'm not sure the right way to cross.

Do they need to take energy really to kind of get a major discount?

At the moment, the way that our discounts are structured, that the discount being loaded into energy. Energy is the dominant service. Of course, in different market conditions, we could decide to shift that and apply the discount to a different service, but at the moment, energy is the largest share of wallet. It's probably the most high-profile, the most emotive of the services, and that's where we put the discounts at the moment.

Again, the key thing I'd say is that the competitive environment that we were talking about during the presentation today is the competitive environment that we've been seeing over the last few months, which is a few months in which we've been deploying some of our price investments and seeing the positive initial signals from that I've mentioned a few times.

Just one last one. I guess there's been a shift in the partner model, more of a cross-sell element to maybe going out and getting new customers for that organic growth. I guess there's probably a bit of teaching incentivization programs that you probably need to roll out there, just like plans for that.

So the partner model is still focused on those pillars that Justin talked about. So our traditional partner model, our customer gathering partner model, and so the connector model, which is the partnerships with small local businesses. The cross-sell will be predominantly centrally managed and will be sort of -- and all of the different touch points we have with customers looking at ways where we can offer them at the right moment using all the data they have. From them additional service prompts at the right moments. Now, one of those interactions that they will have will be through our partners. So, educating and supporting our partners to go back when we launch motor insurance later this year. We'll be asking our partners to go back to all of their customers and talk to them about motor insurance in the same way that we will be communicating that centrally to them as well.

So, that element is how we'll be using our partners in it. But it's not the core role of the partner. The core role of cross-sell is to be managed by us using partners as one of the incremental touch points that other people don't have along the way. In terms of the education piece, again, we're increasingly using -- so much more -- in the past, we used to do school room, classroom teaching to update our partners. We've then shifted it all to online, and we're increasingly using AI-driven teaching tools where partners can both hone their skills and learn new things in an interactive feedback online AI tutor. So our ability to provide quite bespoke coaching to a large and growing partner network is sort of changing rapidly.

Thank you. It's John Karidis from Deutschbank. Just a few questions please. So the first one is I'm trying to understand how the gross profit per energy customer compares with that of a broadband customer. Versus mobile versus insurance. So and also just to check, when you talk about energy, you talk about both services, right? Gas and electricity I suspect?

So when we talk about energy as a core service, we're talking about electricity and gas as one. So when we're talking about our multiservice customers, a two-service customer would have to take energy, electricity and gas, and one of broadband, mobile, or insurance as well, for example. So just to be really clear and simplify that, Nick, in terms of the gross profit. I mean, it's not a number, it's not a breakout that we formally disclose, and that's partly because, because of the way in which we do discounting between our different products. So the fact that we apply discounts to our energy service by taking a broadband product, that obviously has an impact therefore on the relative gross margin, which isn't -- because of the way that the discount lands. So therefore, it can create complexity and confusion as a result. What we really focus on is the customer level view rather than the individual underlying service level view.

Yeah. Sorry, I'm trying to understand if I take insurance and mobile, am I as valuable versus someone who takes energy and broadband? We're both multiservice customers.

Yeah. So broadly speaking that customer would be of similar value. Obviously, there will always be differences, but there's obviously the lifetime and there's the contribution side that you need to look at. And when we look at the, I've done both the contribution and the lifetime analysis, it's been looking at obviously a blend of all these different customer cohorts that sit underneath that.

Okay. Thank you.

One point. Let me -- remember, sort of when you look then below at the contribution line, there's a very different cost to serve associated with the different products as well, where energy has by far the highest cost to serve. So it's actually stopping at the gross -- in any event, stopping at the gross margin level is the one place to stop.

Secondly, what you talked about monthly active partners being up 15% in the first two months. I've got two questions around there. So the first one is what's the year-on-year change? And then secondly, is the number still about 3,000 to 4,000 in any one month?

So the year-on-year change is even bigger than the 15%. I don't have the exact number to hand, but it's even bigger. And at the moment, we are recruiting new partners at a rate of around -- new coming on board is sort of over 4,000 a month.

In terms of monthly active partners, in the past you'd say that in any one month that number is 3,000 to 4,000. Has that changed?

It's higher than that. Higher than that at the moment. And in some of the recent months, it's been over 5,000.

Okay. Thank you. And then a couple of easy numbers questions. Capex went from GBP 12 million in FY '25 to GBP 18 million in FY '26. What's the right number going forward please, and the opposite of that is that your working capital outflow has been very much smaller than the GBP 25 million to GBP 30 million, so why would it revert to GBP 25 million to GBP 30 million going forward per annum?

Yeah, so in terms of the CapEx going -- first part of that question. CapEx going forward, we expect to be in the region of GBP 20 million. So slightly higher as a result of the various digitalization and AI initiatives that we've been talking about, but broadly the same envelope as FY '26, slightly higher than that. Working capital going forward, we continue to indicate around an outflow of about GBP 25 million to GBP 30 million in particular because of the focus on multiservice customers.

Multiservice customers requires -- as a result requires more working capital outflow. Examples of which are routers or partner bonus payments, which are paid because we are very confident that those customers last for a long enough of time. So those are the sorts of things that influence that working capital and that's why we continue to indicate GBP 25 million to GBP 30 million outflow per year.

Thank you. And my very last question is why 20x PE, why is that the right multiple for a buyback and not 15 or 12?

Well, we look back at with other high-quality businesses with growth rate similar to ours and also back at our historic multiple over an extended period of time and formed the view that this was an appropriate multiple as a result.

Thank you. It's Tim Ramskill from Bank of America. I've got quite a few questions, but I'll start basically perhaps with the single service piece. So you've given us an awful lot of information and data today to work with, which I'm sure will take us a bit of time to work through, but if my math is correct, then your single service customers, as you said, it's 60% of the business. And so therefore, it's probably the best part of 45% of the contribution to the group based on that GBP 103.

So as you said, you've got excellent customer lifetime values that are 7 to 8 years. So my slight concern is, have we misdiagnosed the issue because we've shown a chart with a PE multiple declining very dramatically alongside a relatively modest decline in the number of organic services per customer? So it looks to me like you've got best part of 50% of your business from single customers with very long lifetime values. So question 1 is, are we overlooking the ongoing benefit of that?

And then my other question is, I largely group into a category of, is the investment kind of adequate? Is it sufficient given again a lot of what you've pointed to? So GBP 30 million of price investment against the backdrop in the market of 15% discounts. Stuart, as you showed in your chart. Does that touch the sides? And then similarly, GBP 5 million of spend on digital and GBP 5 million on brand awareness? Again, what gives you the confidence those are adequate levels of investment to make a difference because they're not huge numbers in the scheme of things?

Yeah. So, I might answer it slightly back to front. So taking that, what gives us confidence that this is the right number? Well, we're effectively deploying in the first two months of this new financial year, the annualized run rate of the price investment that we've been trying over the last few months, and it has been working and delivering in this existing competitive environment. As I mentioned, we've seen that more than doubling in the number of multiservice customers that we've been signing up in the last couple of months. They've increased partner activity and so on and so forth. So that gives us very high confidence that this is the right plan, the right level of investment, and that it's already working. In terms of things like the brand. Well, we already, we've already, again David talked about the fact that this is not intended to be a more large business national high-profile above-the-line campaign.

This is getting national fame through local executions because that's where our partners are. That's who our partners are. It's where they find their customers and it's focused on putting a halo in effect around our partners and the proposition that they're talking to people about. Open the door for them so they can have better quality conversations. And again, with our, so we're doing it in a different way to how others are spending their money. We're spending it in a more locally targeted way. And once again, we've done this pilot campaign, which again was local, fits in with the budget and the spend envelope if we were to roll out that sort of thing more widely across the country, and we saw very positive results from that as well.

Again, when you look at the digital capabilities, there's what we're talking about here is the P&L number. There's obviously some CapEx, there's some more sort of pounds being spent in total on some CapEx as well, so it's a slightly bigger number than that. But again, we've got experienced team who delivered these sorts of programs in the past, and again, we're already starting to see the effects of some of the things that we're doing already. I mean, Rob walked you through some of the things that we've already deploying in line with our investment envelope for the year ahead, and we're already starting to see the benefits of that. And we expect to generate from that in the orders of magnitude of the 5% efficiency gain across the course of the year just from what we're doing this year.

Now, some of that will be redeployed and moving faster and more productivity rather than -- because that's the phase on the stage that we are, rather than take that out to the bottom line. But again, across each of these different pillars, we are already trying and testing and doing in line with the plan and seeing that the plan is working in line with that with that level of investment. That's what gives us very high confidence. In terms of your first question, can you repeat your first question?

Yeah, it was a bit elongated. So with apologies, but I guess in essence it was single service is a very big chunk of your existing contribution. So I guess kind of what's wrong with that? Like why not you know I get the fact that it's very obvious multiservice customers have a larger lifetime value, right? That's very clear, very obvious. But I'm struggling a little bit with whether we're pivoting too aggressively in response to a big derating on the stock. You just delivered 5% profit growth this year. I'm not sure I've ever seen a company reposition its outlook so dramatically on the back of -- on the face of it isn't a bad set of results.

Yeah, that's right. So we're very clear that the focus on multiservice customers and this degree of focus on multiservice customers is absolutely the right thing to do. But when it comes to single service customers, we've got no real point of differentiation. There's a lot of people out there trying to sign up single service customers with very similar business models. And they're competing in the same way for this principally the same pool of customers. Trying to build a business in that way to my mind is not the right way to build long-term value. There isn't a problem, as I said, in having single service customers for all the reasons that you mentioned. They're profitable and they have a lifetime where they're going to give you the appropriate level of payback for whatever you invest in acquiring them.

But if we want to build a business that is playing to the unique strengths that we have, which is a multiservice proposition and a route to market that can sign up multiservice customers, we should really be doubling down on those unique features. And if we look to where the business would be in 5 years' time following certain alternative paths, there's no doubt in my mind whatsoever that more value will be created over the course of this plan by doubling down on multiservice customers and focusing on multiservice customers than it would if we were to pursue a plan that was -- had a bit harder continuation of the level of single service growth. There's no doubt to my mind there that more value will be created than going for multiservice customers, and that's where it's clear to me it's the right thing to do.

And if I can just one last one, so I don't recall you mentioned at all today the TalkTalk customer bases that you'd acquired and the cross-sell ambitions you had. Just give a quick update there and is there any risk of a write-down on some of that acquisition spend if it isn't going quite as well as planned?

So, as we've said previously, the TalkTalk customers we see delivering a return on investment in excess of the WACC even without cross-sell, and we are cross-selling into them as well. So therefore, that return on investment will be even higher than it otherwise would have been. I think when you look at what that means post-amortization, it's maybe a handful of million pounds a year of therefore contribution embedded in the numbers that we're talking about. But critically, what we've got from this is the insight to give us both the know-how and the confidence about how we develop and build out our cross-sell across the board business. And that's what again, we've already started rolling out some of those insights and we spoke today about how we're going to build out a world-class cross-sell capability leveraging some of those insights, and that's the key here.

Brilliant. Do we have any other questions? No other questions? No.

Okay. In that case, I'd like to say thank you very much for coming. I appreciate it's been a long update, but a lot of important material to cover. And just to reiterate that this is a very comprehensive and considered plan to really set this business on a very different trajectory over the next 5 years. And me and the team are really chomping at the bit to get stuck in and set Telecom Plus on it's deserved trajectory.

Good morning, everyone. Thank you for joining us today for the Telecom Plus Full Year Results Presentation for the year ending 31st March 2026. I'm Stuart Burnett, CEO; and with me is Nick Schoenfeld, CFO. And we're pleased to report another strong performance in FY '26 with double-digit percentage organic customer growth, resulting in record profits and an increase in total cash distributions to shareholders.

Now let's run through the key highlights of our performance. We saw a 23% increase in total customers, including 193,000 broadband customers acquired from TalkTalk with an underlying organic growth rate of just over 10%, which includes 14,500 TalkTalk customers who we upgraded and cross-sold. Our organic service growth of 7.6% lagged customer growth due to faster growth in single service customers, resulting in organic services per customer declining in part as a result of increased competition in the energy and broadband markets.

Adjusted profit before tax of GBP 132 million was at the lower end of our guided range following an unseasonably warm winter, which led to a reduction in household energy consumption. And a total of GBP 80 million will be returned to shareholders in respect of FY '26 with a total dividend of 50p, plus a share buyback of GBP 40 million, which will start today, equivalent to a further 50p per share in line with our updated shareholder distribution policy. And it's our unique business model, which has enabled this performance.

And below is a simple visualization of the business model that many of you will be familiar with. First of all, our multiservice proposition. By bundling together energy, broadband, mobile and insurance, we acquire multiservice customers with those market-leading lifetimes and contributions. As well as more value, the more services they take, multiservice customers benefit from the simplicity of getting all their services on one bill with one phone number, one app, one password combined with our award-winning customer service. And together, that means that once they join, they don't want to leave. Essentially, we aim to be their last ever switch.

Secondly, we have our structural financial advantage. You see, we also get a number of structural financial benefits from our multiservice customers. More margin, lower bad debt and a higher contribution to our fixed overheads. And we reinvest some of this back into the customer proposition, meaning that we can put together a compelling customer offer whilst, at the same time, growing profitably.

And finally, we have our partner route to market. What we've just been talking about creates a proposition, which is really worthy of recommendation. And that's how we sign up our multiservice customers, word-of-mouth recommendation by our 80,000 strong network of partners. You see our partners are the key that unlock our access to multiservice customers.

And it's a business model which really works with a long and demonstrable track record. We've now been delivering double-digit organic customer growth for a number of years as a result of this business model. Since FY '21, we have seen our customer numbers, excluding those customers acquired from TalkTalk, increase at a compound annual growth rate of 13.8%, whilst our adjusted profit before tax has increased at a compound annual growth rate of almost 19% over the same period.

Now looking more closely at our organic customer and service growth for the year, it's important to understand the key competitive dynamics during the period. As mentioned earlier, we met our double-digit growth target for organic customer growth, including the customers upsold and cross-sold from TalkTalk with growth of just over 10%, albeit with organic service growth of 7.6%, lagging behind customer growth. Now the context for this is that we saw increased price competition in the energy market with energy suppliers offering fixed tariffs at a large discount to the price cap as well as spending heavily on marketing and branding.

Despite this, we continue to grow our energy services, albeit at a slower-than-expected rate of 1.8%, but in an environment where only one of the 'Big 6' suppliers increased their market share organically. And together, this competitive backdrop led to our churn rate increasing slightly during the period to 14.2%. In broadband, our full year organic growth was 3.8%. During the period, the broadband market was impacted by increased price competition, driven by discounting from altnets fighting for customers while dealing with high debt levels and consolidation.

Our partnership with CityFibre remains strong and 74% of new customers are now choosing Full Fiber broadband, which we expect to increase now that we've launched our first VoIP product. In mobile, our offering continued to grow very strongly with mobile services up 29%, reflecting our competitive position in the mobile market. And then turning to insurance. This has been slower than expected to recover from the pause in new sales that took place following an FCA review in FY '25. Now whilst our home insurance product began to see positive growth in the second half of the year, this was offset by a decline in our boiler insurance services.

And finally, we saw strong growth in Cashback Card take-up following a number of enhancements to the product during the year, including the launch of open banking, adding new retailers and a 3-month free promotion. Now across the year, we continued to invest in our unique multiservice proposition and partner route to market.

We were incredibly proud to become the first-ever company to be Which? Recommended for energy and broadband at the same time during 2025, which is a testament to both the strength of our customer proposition and the quality of service that we provide. And this was in addition to being named Best Value for Money by Uswitch at their 2025 Energy Awards. Our partner offering is increasingly of its time, driven by the ongoing cost of living crisis and trends towards multiple incomes, not to mention the pensions crisis and the growing need for many households to bolster their retirement income. As a result, we saw a strong growth in the number of partners during the year to over 77,000. And to broaden the reach of our partners, we also launched a trial that we're calling Connectors, where partners sign up a local business or a community organization, which in turn provides them with warm customer leads with the sign-up bonus shared between the partner and the connector.

We also relaunched our insurance proposition during the year after that brief hiatus I mentioned during an FCA review. Insurance service, however, still continued to decline during the year, although we're looking to return insurance back to growth over the year ahead and are planning to launch our first new product in a number of years expected to be motor insurance in the second half.

Finally, we strengthened our customer proposition with new product launches at our biannual partner events, including trialing free energy days and a welcome bonus as a new customer sign-up incentive, introducing a wider range of energy fixed tariffs as well as adding new retailers to the Cashback Card. We also further enhanced our mobile offering with a new introductory SIM and unlimited multi-SIM deal, resulting in an increase in the rate of mobile service growth. Competitive dynamics, however, continue to impact service growth in energy and broadband.

On the subject of broadband, I also wanted to spend some time on the performance of the cross-sell initiative with former customers of TalkTalk, which we see as a real success. As a reminder, we acquired 2 tranches of broadband customers from TalkTalk in late FY '25 and early FY '26. We had 193,000 of these customers on our books at the end of the last financial year, with 160,000 of them actually migrated onto our systems and available for cross-sell. The balance have since been migrated onto our systems over the last couple of months.

Now the key takeaway here is that the initial cross-sell results are encouraging and show that significant conversion is achievable, significantly above what is typical in most industries for cross-sell initiatives. 14,500 customers were upgraded and cross-sold in FY '26, with 2/3 of these customers taking at least one additional service. This represents a 17% conversion rate of the customers available for cross-sell across the year, given that these customers were migrated gradually despite using only manual processes and limited incentives.

Now as previously explained, we expect to achieve a return from these customers above our post-tax cost of capital even without any cross-selling. And going forward, this opens up a significant opportunity to cross-sell to our existing base of single service customers, now we have the know-how and once we have built out the capability to do so.

Now I'll hand over to Nick to talk through our financial performance.

Thanks, Stuart. Let's start with the P&L. As Stuart mentioned, adjusted profit before tax is at GBP 132 million relative to the prior year of GBP 126 million. This was at the bottom of the guided range due to an unseasonably warm winter. Now it's important to note that the rephasing of certain energy costs, including metering, did not impact our full year profits or cash flow as we stated at the half year results. Gross profit is up 9%, reflecting the growth in services, offset by the impact from the warmer weather in winter. Distribution expenses of GBP 48 million remained flat as a percentage of sales. Admin expenses increased by 10% to GBP 159 million against the backdrop of customer and service growth, a higher depreciation charge related to TalkTalk and higher national insurance and minimum living wage costs.

The bad debt charge for the period as a percent of sales was higher at 2.1%. This reflected continued elevated levels of customer non-payment, which arose from the previously high energy prices and that temporary moratorium on the involuntary installation of prepayment meters. Now a progressive ramp-up of this debt recovery process is underway. And as a reminder, typically, any movements in bad debt levels across the industry are recovered through increases in the relevant Ofgem price cap allowance, all of which accrue to the group.

Net interest was higher due to higher net debt following the TalkTalk customer acquisition, and this results in overall adjusted profit before tax of GBP 132 million, which is up 5% on the prior year. The balance sheet includes an increase of GBP 60 million in non-current assets, and that reflects the acquisition of broadband customer contracts to whom we can cross-sell together with investment in software development. Net current assets increased by GBP 40 million, and that's driven by working capital resulting from growth. This contributes to net debt increasing GBP 27 million, driven by the purchase of these customer contracts.

With all this, the net debt-to-EBITDA ratio remains low at 0.9x given the strong cash generation of the business. On the cash flow, well, this starts with an FY '26 EBITDA of GBP 162 million, which is up from GBP 148 million in the prior year. There was a working capital outflow this year of GBP 10 million.

Now as a reminder, the typical working capital outflow expected across the whole year, given the rate of multiservice growth continues to be around GBP 25 million to GBP 30 million. You then have tax of GBP 32 million, and then there is CapEx of GBP 64 million. That includes GBP 46 million for the acquisition of customer contracts, which relates to TalkTalk compared to GBP 5 million in the prior year, and that leaves a residual spend, which is primarily technology of around GBP 17 million.

With all this and the payment of dividends, you have an increase in net debt by GBP 27 million to GBP 143 million. And as mentioned earlier, that results in a net debt-to-EBITDA position of 0.9x despite the acquisition of the TalkTalk customers.

Now turning to shareholder distribution. The backdrop is that we have a capital-light business model given that this has low working capital requirements as we grow, and it has underlying CapEx, which is limited primarily to technology development. That's what determines our progressive distribution policy where we maintain low leverage of around 1x net debt to EBITDA and at the same time, return at least 80% of profits after tax to shareholders.

Now our policy has been revised to split the distribution to shareholders into at least 50% via ordinary dividends and the remainder via a share buyback if it is financially beneficial to the company and the company is permitted to do so. The share buyback will be actioned if the company's shares are trading below 20x implied post-tax earnings. Otherwise, this part of the distribution will be via a special dividend.

Given that the shares have been trading below that level, we're allocating 50% of the distribution to share buybacks. This means that today, we are declaring a final dividend of 12p per share, bringing our total dividend for the year to 50p per share and allocating a further GBP 40 million to a share buyback starting today. That's equivalent to a further 50p per share, bringing our total return to shareholders for the year to GBP 1 per share. Now back to Stuart.

Thank you, Nick. Now as we said in our FY '26 trading update back in April, we've been reviewing initiatives focused on progressively increasing services per customer, reducing churn and enhancing customer lifetime values in order to maximize long-term shareholder value. And today, we have published our new 5-year plan, which includes a renewed focus on multiservice customer growth and aims to double the number of multiservice customers to more than 1 million by 2031.

For full details of the plan, together with our outlook for the current year, FY '27, please see the separate RNS and the presentation of our new plan, which will be webcast at 9:00 a.m. this morning and published on our website. Thank you, everyone, for listening.