Telecom Sector Issues Upbeat Dividend News

LONDON -- The telecoms sector confirmed its attractions to dividend investors this morning after Telecom Plus  (LSE: TEP.L  ) and KCOM  (LSE: KCOM.L  ) issued upbeat payout news.

Telecom Plus, which trades as utility warehouse and resells utility services to ordinary households, said its shareholders should expect a "significant" increase to the firm's forthcoming interim dividend.

Telecom Plus also said this morning that its customer base was growing at an 11% annualized rate and that next month's first-half results would show profits "firmly ahead" of those reported last year.

Andrew Lindsay, chief executive of Telecom Plus, said, "I am extremely pleased with the further progress that we have made during the period. We have seen strong organic growth in both customer and service numbers, and a continuation of the extremely positive trends in the quality of our customer base."

In early trade, the shares of the FTSE 250 group reacted by advancing 26 pence, or 3%, to 898 pence.

Meanwhile, fellow mid cap KCOM dropped 6 pence, or 7%, to 79 pence despite confirming a commitment to lift its annual dividend by at least 10%.

KCOM, which provides landline and broadband services throughout East Yorkshire, admitted its enterprise division had suffered from an "uncertain environment for business investment decision-making" and the operation's year-on-year growth would therefore be lower than expected.

However, KCOM did say its services to residential customers continued to make a strong contribution to profits.

Bill Hallbert, KCOM's executive chairman, said, "The continuing macro-economic uncertainty is resulting in slower new business investment decision making and this is likely to remain the case through the second half of the year. Nevertheless, we remain confident about the underlying strength and continuing cash generative capacity of the Group and are pleased to reconfirm our commitment to delivering a minimum 10% increase in full year dividend."

Today's news from Telecom Plus and KCOM underscores why the telecoms industry appeals to savvy income seekers. No wonder, then, that equity-income star Neil Woodford has placed 10% of his multibillion Invesco Perpetual portfolios into the sector.

You can discover all the top high-yield names Woodford is backing -- and the investing logic behind his buy decisions -- by requesting this exclusive free Fool report today. But hurry, as all free Fool reports are available for a limited time.

Investing is by no means easy in today's uncertain economy. That's why we've published "Three Top Sectors" -- our guide to three favorable industries for long-haul investors. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

Maynard Paton does not own any share mentioned in this article. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that
considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2045440, ~/Articles/ArticleHandler.aspx, 9/23/2014 10:51:50 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement