Net profit after tax of $129 million, up 38 per cent, is just one measure indicating energy retailer Trustpower is succeeding with its broadband bundling strategy.
The NZX-listed company reported total revenues of $946.9 million for the year to 31 March, up from $902.6 million in 2017. $80.6 million of that was from telco services, up from $65.9 million.
However, two thirds of new Trustpower customers are now classified as "bundled", taking two or more services from the electricity, gas and telco retailer. Over 100,000 customers in total receive more than one service.
Over 3,000 existing customers added telco services during the year while 80 per cent of new "high value" customers are buying two or more services.
Gross margin increased to $151 million from $133 million, well in excess of the increase in utility accounts. CEO Vince Hawksworth said that validated Trustpower’s view that the new category of bundled energy/telco services was more profitable than either energy or telco alone.
“We continue to see customer retention levels in our bundled customers that are higher than established energy retailers and much greater than the levels reported by the major telco players," he said.
As of 31 March, Trustpower served 87,000 telco customers, up 14 per cent from 76,000 in 2017. 51.6 per cent of those buy fibre services, up from 36.6 per cent.
The Tauranga-based company is forecasting it will serve 95,000 to 105,000 telco customers by the end of its 2019 financial year.
"We continue to see strong telecommunications growth and we are creating a diverse and resilient customer base," the company said in a presentation released with its results today. "We are now realising scale and cost to serve benefits."
Trustpower said it is focusing on new and emerging opportunities and on technology and customer requirements adjacent to its core business.
"During the past year, we have developed a solar product that allows our customers to 'trade' with each other. We have also started to explore adjacent opportunities in the telecommunications market including the provision of mobile services."
On the regulatory front, Trustpower is advocating the establishment of a fixed line central registry to support consumer switching and improved access to networks.
“We are no longer a telecommunications start-up, but an established player with scale to compete with high quality internet service provision and network caching," Hawksworth said.
“Our innovation and technology programme continues to assist us in delivering a great customer experience, and the launch of our new mobile app and chatbot during the year together with other customer facing technologies resulted in nearly half of all customer contacts being serviced by a virtual workforce.”