TIDMEAAS
RNS Number : 3878U
eEnergy Group PLC
28 March 2023
28 March 2023
eEnergy Group plc
("eEnergy" or "the Group")
Results for the six months ended 31 December 2022
eEnergy Group plc (AIM: EAAS), the net zero energy services
provider, is pleased to announce its interim results for the six
months ended 31 December 2022.
Financial Highlights
-- Revenue up 58% to GBP15.1 million (HY21: GBP9.6 million)
* Energy Management revenues of GBP6.6 million (HY21:
GBP4.8 million)
* Energy Services revenues of GBP8.5 million (HY21:
GBP4.8 million)
-- Adjusted EBITDA (1) up 87% to GBP1.5 million (HY21: GBP0.8
million)
-- Profit before tax of GBP0.4 million (HY21: loss of GBP1.0
million)
-- Profit before tax and exceptional items of GBP0.7 million
(HY21: GBP0.2 million)
-- Contracted future revenues increased 45% to GBP26.4 million
at 31 December 2022 (31 December 2021 GBP18.3 million)
-- Cash GBP1.1 million (FY22: GBP1.4 million) excluding GBP0.4
million of restricted cash balances (FY22: GBP0.2 million)
reflecting scheduled payments of trade creditors and legacy
balance sheet items following drawdown of the new subordinated
debt facility
-- As at 24 March 2023, the Group's cash balance was GBP1.1
million (excluding restricted cash balances of GBP0.5 million).
This included a payment of GBP0.5 million received in advance
which may, in certain circumstances, be returnable in May
2023
Operational Highlights
-- Key contract renewals and wins comprising healthcare and
education trusts as well as two significant framework agreements
-- Launch of eSolar in September 2022 with 12.3 MW under HOT's
as at 31 December 2022
-- Cross selling proposition continues to improve, with 35%
of Energy Service's TCV signed in H1 FY22 coming from existing
customers
Post Period End
-- Q3 TCV Values:
* Energy Management GBP3.2 million
* Energy Services GBP4.4 million
-- Experiencing strong appetite and trading in eSolar
-- Stabilised working capital with Net Debt broadly flat during
Q3, post period end
-- Appointment of John Foley as Non-Exec Chairman, with David
Nicholl moving to Non-Executive Director
Full Year Outlook
eEnergy continues to grow its pipeline of new business
opportunities, both with existing and new customers. As at 31
December 2022, the Company had contracted forward revenues
("Forward Order Book"), of GBP26.4 million over four years (up 45%
on HY21). Of the Forward Order Book, GBP8.8 million is expected to
be recognised as revenue in H2 FY23 and GBP6.8 million recognised
in FY24.
The working capital position has been stabilised during Q3 as a
result of management actions and the Board are expecting healthy
conversion of earnings to operating cashflow for H2 as a whole. As
at 24 March 2023, the Group's cash balance was GBP1.1 million
(excluding restricted cash balances of GBP0.5 million). This
included a GBP0.5 million payment received in advance which may, in
certain circumstances, be returnable in May 2023.
The first months of H2 trading have been strong as we win new
clients and cross selling opportunities within our existing client
base continues to bear fruit. Contract wins during Q3 give
improving visibility on the remaining three month outlook for FY23,
and the Board remains optimistic to deliver full year trading
expectations. As previously stated, interest expense for the year
will reflect the drawdown of the subordinated debt facility.
Harvey Sinclair, CEO of eEnergy, commented : "eEnergy continues
to make progress towards making net zero possible and profitable.
Following a transformational year in 2022 bringing our offering
under one unified brand, the first half of the year has seen us
grow the business across both Energy Management and Energy
Services. Our financial year is traditionally second half weighted
and based on the new business pipeline and a contracted forward
order book of GBP26.4 million, with GBP8.8 million to be recognised
in H2, we remain optimistic to deliver full year trading
expectations."
Investor & Analyst presentation
Management will provide a live presentation relating to the
interim results via the Investor Meet Company platform on 28 March
2023 at 11:15am GMT. The presentation is open to all existing and
potential shareholders. Questions can be submitted at any time
during the live presentation. Investors can sign up to Investor
Meet Company for free and add to meet eEnergy Group plc via:
https://www.investormeetcompany.com/eenergy-group-plc/register-investor
An online analyst briefing will be held at 10:00am GMT. Analysts
wishing to attend should contact eenergy@tavistock.co.uk to
register.
Note: (1) Adjusted EBITDA excluding Exceptional Items.
Exceptional Items are those items which, in the opinion of the
Directors, should be excluded in order to provide a consistent and
comparable view of the underlying performance of the Group's
ongoing business, including the costs incurred in delivering the
'Buy & Build' strategy associated with acquisitions and
strategic investments, costs of restructuring and transforming
acquired businesses and share-based payments.
Contacts:
eEnergy Group plc Tel: +44 20 7078 9564
Harvey Sinclair, Chief Executive info@eenergyplc.com ;
Officer www.eenergyplc.com
Crispin Goldsmith, Chief Financial
Officer
Singer Capital Markets (Nominated Tel: +44 20 7496 3000
Adviser and Joint Broker)
Justin McKeegan, Asha Chotai, James
Maxwell (Corporate Finance)
Tom Salvesen (Corporate Broking)
Canaccord Genuity Limited (Joint Tel: +44 20 7523 8000
Broker)
Max Hartley, Tom Diehl (Corporate
Broking)
Tavistock Tel: +44 207 920 3150
Jos Simson, Heather Armstrong, Katie eEnergy@tavistock.co.uk
Hopkins
About eEnergy Group plc
eEnergy (AIM: EAAS) is a net zero energy services provider,
empowering organisations to achieve net zero by tackling energy
waste and transitioning to clean energy, without the need for
upfront investment. It is making net zero possible and profitable
for all organisations in four ways:
-- Transition to the lowest cost clean energy through the
Group's digital procurement platform and energy management
services.
-- Tackle energy waste with granular data and insight on energy
use and dynamic energy management.
-- Reduce energy use with the right energy efficiency solutions without upfront cost.
-- Reach net zero with onsite renewable generation and electric vehicle (EV) charging.
eEnergy is a Top 5 B2B energy company and has been awarded The
Green Economy Mark by London Stock Exchange.
CEO Statement
H1 FY23 has continued to build on what was a transformational
FY22 for eEnergy when further investment was made in the business
and the Company's business divisions unified under a single eEnergy
brand. The board believes that the business is at an inflection
point which has been escalated at a quicker rate due to the long
term increase in energy prices, the increase in appetite for net
zero solutions in conjunction with the need for improved energy
security. This is evidenced by an increase in our sales both from
new customers and improving our cross selling rates to existing
clients following the establishment of a more integrated
proposition last year.
Energy Market
According to the International Energy Agency, the increase in
wholesale electricity prices in 2022 was most prominent in Europe,
where on average, prices were more than twice as high as in 2021.
The mild winter so far in 2022/23 has helped ease wholesale
electricity prices, aided by sustained liquefied natural gas
inflows and sufficient gas storage inventories. However, this
status of the global gas balance is delicate and there are a number
of uncertainties in the short term for the rest of 2023.
These now established tailwinds continue to provide eEnergy with
significant opportunities to continue its growth trajectory as
organisations globally mitigate energy costs and accelerate a move
to, not just Net Zero, but to improve their security by
establishing energy independence away from the grid.
Results
Revenue increased by 58% to GBP15.1 million, up from GBP9.6
million in the prior year, with Energy Management and Energy
Services contributing GBP6.5 million and GBP8.5 million
respectively. Adjusted EBITDA was up 87% to GBP1.5 million in
comparison to GBP0.8 million in HY21.
Both Energy Services and Energy Management have seen significant
contract and framework wins during the period. We continue to win
significant opportunities with education trusts to support their
net zero strategies with contracts for lighting services, on-site
generation services with eSolar and management through My
ZeERO.
In addition we are increasing our presence in new segments with
a particular focus on healthcare.
Following the successful launch of eCharge in March and later
eSolar in September 2022, eEnergy has seen increasing levels of
appetite from its customers for on-site generation services through
its capital free Electrical Vehicle ("EV") charging and solar
energy offerings. In addition, eCharge has secured a contract, to
install 70 chargers across 35 locations across the UK with a new
customer.
In November 2022, eEnergy announced that it had raised GBP2.5
million through the issue of a new sub-ordinated debt facility from
exiting shareholder, Hawk Investment Holdings, and a new strategic
investor, FFIH, and all Directors of the company, used to fund
additional Energy Services working capital as a result of
lengthened cash collection cycles as well as funding the next phase
of MY ZeERO stock-build, other balance sheet liabilities and
general working capital. This allowed eEnergy to tackle a tightened
liquidity position and to support further growth of the business
and continued investment in the Company's market leading
platform.
Strategy
eEnergy's new clear and integrated product and service offering
remains key to delivering on our core strategy of making net zero
possible and profitable businesses and organisations, without the
need for capital investment. The Company's integrated end-to-end
solution driven platform, which include market leading digital
products, underpinned by its Energy-as-a-Service model, make it
easier than ever before for an organisation to transition to Net
Zero.
While new customer acquisition remains central to the Company's
growth strategy, in the last 12 months we have established an
integrated cross selling platform, promoting additional products
and services to eEnergy's existing 2,000 strong customer base. This
allows for increased re-occurring revenues streams at an improved
margin, giving greater long term revenue visibility and
predictability.
The Board welcomes John Foley as new Non-Executive Chair to
eEnergy. John is a barrister and chartered accountant who has
served on a number of public and private company boards. He was CEO
of MacLellan Group plc, a UK facilities management provider, for 12
years. He was co founder of Premier Technical Services Group Ltd
("PTSG") a specialist provider of facilities services, and was its
Chairman from inception in 2007 until early November 2022 (he
remains a Non-Executive Director. He is also currently Chairman of
SEC Newgate Spa, the parent company of a global strategic
communications and advisory group and is also Chairman of Servoca
Plc, a provider of staffing solutions and outsourced services.
David Nicholl will continue to make positive contributions to
the Board and Group strategy in moving to the role of Non-Executive
Director.
Outlook
The energy crisis, exacerbated by the war in Ukraine has put a
spot light on the UK's energy security, consumption and management.
It has never been more critical for organisations to ensure their
ability to mitigate risk, especially during the cost of living
crisis. These market conditions have driven the awareness of the
benefits of energy management both from a cost and environmental
perspective and eEnergy's proposition helps organisations to
navigate these complicated issues.
The Group maintains its cautious optimism while international
macroeconomics continue to be unpredictable. The new business
pipeline and forward order book remain robust and supported by the
H2 weighting and, as at 24 March 2023, there is visibility over 93%
of the Full Year revenue expectation. As such, the board remains
optimistic to deliver full year trading expectations. As previously
stated, interest expense for the year will reflect the drawdown of
the subordinated debt facility.
Harvey Sinclair
Chief Executive
28 March 2023
CFO Statement
Group key performance indicators
Period Year Period Year
to 31 December to to 31 December to
2022 30 June 2021 30 June
2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 15,124 22,096 9,592 13,596
Ad j. EBITDA 1,508 3,021 807 830
Ad j. EBITDA% 10.0% 13.7% 8.4% 6.1%
Cash & cash equivalents (exc.
restricted balances) 1,050 1,380 2,430 3,332
Net Cash / (Debt) (excl.
Of IFRS16) (6,567) (3,642) (516) 1,486
Summary performance
H1 FY23 was another period of significant growth for the Group.
Revenue of GBP15.1 million was up 58% from H1 FY22, driving an 87%
increase in Adjusted EBITDA to GBP1.5 million and delivering Profit
Before Tax of GBP0.4 million (H1 FY22: GBP(1.0) million Loss Before
Tax).
In November, the Group announced an additional GBP2.5 million in
debt funding into the business through a new subordinated bond in
order to give the business the working capital headroom to fund
additional Energy Services working capital as a result of
lengthened cash collection cycles as well as funding the next phase
of MY ZeERO stock-build, other balance sheet liabilities and
general working capital .
Net debt increased by GBP2.7 million in the period, reflecting a
GBP3.9 million increase in working capital. This was largely driven
by repayment of legacy (non-trade) liabilities and increased
accrued revenue balances, reflecting the scale of organic growth
and a transition to lengthened cash collection cycles across both
Energy Services and Energy Management.
A number of initiatives were instigated to mitigate this
increased working capital requirement going forward, as a result of
which net debt has stabilised during Q3 with a further GBP0.8m of
legacy liabilities also settled.
The increase in Net Working Capital also reflected progress in
strengthening the Balance Sheet. During the period GBP0.9 million
of legacy liabilities were settled and contingent consideration of
GBP0.4 million in relation to the acquisition of Utility Team was
satisfied, primarily for shares rather than cash, with the balance
of GBP0.5 million written back to the Balance Sheet.
As at 24 March 2023, the Group's cash balance was GBP1.1 million
(excluding restricted cash balances of GBP0.5 million). This
included a payment of GBP0.5 million received in advance which may,
in certain circumstances, be returnable in May 2023.
Divisional Performance
Energy Services
The strong momentum in new contract wins built during H2 FY22
converted into accelerated revenue growth in H1 FY23, delivering
revenues of GBP8.5 million, an impressive 79% up on the same period
last year.
Strong execution and focus on cost management delivered a 60bps
improvement in Gross Margins to 38.4%, despite inflationary
pressures across the economy. We segment Energy Services into three
verticals - Measure (primarily MY ZeERO), Reduce (primarily
lighting) and Connect (eSolar and eCharge). Budgeted Gross Margins
vary from 50% in Measure, 34% in Reduce to 30% in Connect.
GBP10.6 million of new contract signings were delivered during
the period, taking the total to GBP20.4 million for the calendar
year 2022, double that for calendar year 2021. This accelerating
momentum has continued into Q3.
The Group has built a strong pipeline of Solar opportunities
over the last 12 months and had12.3 MW under Heads of Terms as at
31 December 2022. Lead times on Solar projects are long given the
number of stakeholders involved and consents required. After a long
development cycle these projects are now poised to accelerate
growth during Q4 FY23 and into FY24.
Energy Management
The Energy Management business has continued to perform well
despite a challenging market backdrop of unprecedently high
volatility in energy prices and a period where the primary focus
has been on integration rather than growth.
Underlying organic revenue growth of 8% was boosted by
annualisation of the Utility Team acquisition (completed September
2021) to record overall 37% growth year-on-year to GBP6.6 million
for the half-year, with EBITDA up 19% to GBP1.7 million.
The Board believes that the quality of earnings in this business
unit are strong, with 95% of revenue from commissions paid by
energy suppliers linked to long-term customer supply contracts at a
77% budgeted Gross Margin.
A key part of the integration has been a focus on service
delivery. The Group has invested in both the team and delivery
platform to ensure a best-in-class customer experience through the
life of the relationship which will maintain and enhance retention
rates as well as giving a differentiated proposition for new
business acquisition. This investment has led to a temporary
reduction in the EBITDA margin to 25.9% in the period (from 29.8%
for H1 FY22) which is expected to normalise in H2.
Cash Flow and Working Capital
Net cash outflow from operating activities for the period was
GBP2.0 million (H1 FY22 net cash outflow of GBP3.2 million).
There were two key drivers of this operating cash outflow.
First, the repayment of GBP0.9 million of legacy (non-trade)
liabilities which is planned to conclude during H2. Second, the
scale of organic growth led to an increase of GBP2.5 million in
trade working capital, mainly due to an increase in accrued revenue
of GBP3.3 million.
Accrued revenue is recognised where revenue generating activity
within a given period is rewarded by cashflow in future periods.
Accrued revenue therefore represents contracted future cash
receipts.
As discussed in the FY22 Annual Report, the increase has been
caused both by organic growth and through a transition,
now-completed, to new payment cycles in both Energy Management
(GBP2.5 million impact) and Energy Services (GBP0.7 million
impact). This was accentuated by seasonal delays to receipts over
the Christmas period.
There was also a largely non-cash reduction of GBP0.9 million in
contingent consideration, relating to the acquisition of Utility
Team.
Cash flow in the period also reflected GBP0.5 million investment
in developing the Group's proprietary technology platforms,
including a new self-service client portal in Energy Management and
MY ZeERO's cloud analytics.
Initiatives implemented by management during H1, outlined below,
have stabilised working capital during Q3 FY23 and, together with
the completion of legacy liability repayments during Q4, are
expected to deliver strong cash generation for H2 as a whole.
A focus on improving payment terms from energy suppliers has
resulted in 27% of January and February TCV signed in Energy
Management now being invoiced on signing, up from 2% average for H1
FY23.
Off-balance sheet funding has been secured for the first batch
of MY ZeERO eMeters, giving rise to an expected GBP0.2m cash
benefit during H2 FY23.
In Energy Services, there has been increased demand for Capex
(customer-pays) projects which give a significantly improved cash
collection profile to the Group compared to the zero-capital
upfront product. Capex products have accounted for 45% of Q3 FY23
cash receipts to-date in Energy Services, up from 30% in H1
FY23.
The Group is working with a number of funding partners with the
aim of improving cash collection cycles on funded projects.
Diversification of supply chains across the business, aimed at
reducing concentration risk and mitigating inflationary pressures,
have also had a secondary benefit of delivering additional working
capital capacity.
Borrowings and Funding
The increase in Net Working Capital during H1 was financed
through the issue of GBP2.5 million of subordinated bonds in
November 2022.
Post period end, improved operating cash flow has contributed to
a stabilised net debt position during Q3 FY23. Between 1 January
and 24 March 2023 there was a modest increase of GBP0.1 million of
net debt (to GBP6.7 million, including unrestricted cash of GBP1.1
million), after a further GBP0.8 million reduction in legacy
liabilities. This compares to a GBP2.9 million increase in H1 FY23,
GBP3.3 million increase in H2 FY22 and GBP1.8 million in H1 FY22.
The Board believes this marks substantial progress.
The pricing and structure of the subordinated bonds reflect the
fact that they are intended to be short-term in nature, with the
Board expecting the Group to deliver a healthy conversion of
operating profit to operating cashflow going forward.
Under the guidance of the new Chairman, the Board is addressing
the structure of the Group's capital base and borrowing
facilities.
H2 FY23 Outlook
Momentum across both parts of the business means that, going
into Q4, the Group is well positioned to meet the Board's
expectations for the full-year out-turn. As at 24 March there is
good visibility on 93% of the Full Year revenue expectation.
Energy Services continue to benefit from accelerating momentum
and are strengthening their presence in attractive new market
segments.
Continued investment in capabilities and infrastructure is
delivering an enhanced customer proposition and user experience,
supporting retention and new business wins.
Revenue growth during H2 FY23 is expected to be supported by
positive revenue impact from eCharge and eSolar, launched during
2022, which leverage the existing Group cost base.
A substantial improvement in operating margins is expected from
H1 FY23 to H2 FY23 as a result of operating efficiencies delivered
during H1 FY23 and the benefits of operational gearing.
Crispin Goldsmith
Chief Financial Officer
28 March 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 31 December 2022
Period Period
to to Year to
31 December 31 December 30 June
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
----- -------------- -------------- ----------
Continuing operations
Revenue from contracts with customers 15,124 9,592 22,096
Cost of sales (6,781) (4,067) (9,131)
------------------------------------------- ----- -------------- -------------- ----------
Gross profit 8,343 5,525 12,965
Operating expenses (7,085) (5,911) (12,233)
------------------------------------------- ----- -------------- -------------- ----------
Included within operating expenses
are:
* Other exceptional items 4 250 1,193 2,289
Adjusted operating expenses (6,835) (4,718) (9,944)
-------------- --------------
Adjusted earnings before interest,
taxation, depreciation and amortisation 3 1,508 807 3,021
------------------------------------------- ----- -------------- -------------- ----------
Earnings before interest, taxation,
depreciation and amortisation 1,258 (386) 732
Depreciation and amortisation (684) (401) (2,636)
Finance costs (143) (227) (323)
Profit / (Loss) before taxation 431 (1,014) (2,227)
Income tax Credit 150 - 736
------------------------------------------- ----- -------------- -------------- ----------
Profit / (Loss) for the year
from continuing operations attributable
to the owners of the company 581 (1,014) (1,491)
=========================================== ===== ============== ============== ==========
Attributable to:
Owners of the company 3 617 (932) (1,431)
Non-controlling interest (36) (82) (60)
------------------------------------------- ----- -------------- -------------- ----------
581 (1,014) (1,491)
------------------------------------------- ----- -------------- -------------- ----------
Other comprehensive income -
items that may be reclassified
subsequently to profit and loss
Translation of foreign operations (105) 107 (125)
------------------------------------------- ----- -------------- -------------- ----------
Total other comprehensive (loss)
/ profit (105) 107 (125)
------------------------------------------- ----- -------------- -------------- ----------
Total comprehensive profit /
(loss) for the year 476 (907) (1,616)
=========================================== ===== ============== ============== ==========
Total comprehensive profit /
(loss) attributable to:
Owners of the company 512 (825) (1,556)
Non-controlling interest (36) (82) (60)
------------------------------------------- ----- -------------- -------------- ----------
476 (907) (1,616)
------------------------------------------- ----- -------------- -------------- ----------
Basic and diluted earnings (loss)
per share from continuing operations
attributable to owners of the
company 5 0.15p (0.31)p (0.44)p
------------------------------------------- ----- -------------- -------------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
As at As at
31 December 30 June
2022 2022
Note GBP'000 GBP'000
----- -------------
NON-CURRENT ASSETS
Property, plant and equipment 417 458
Intangible assets 6 28,666 28,733
Right of use assets 642 777
Deferred Tax Asset 1,071 1,071
Total non-current assets 30,796 31,039
------------------------------------------ ----- ------------- ---------
Inventories 745 809
Trade and other receivables 19,946 16,022
Financial assets at fair value through
profit or loss 21 21
Cash and cash equivalents 8 1,453 1,802
------------------------------------------ ----- ------------- ---------
Total current assets 22,165 18,654
------------------------------------------ ----- ------------- ---------
TOTAL ASSETS 52,961 49,693
------------------------------------------ ----- ------------- ---------
NON-CURRENT LIABILITIES
Lease liability 206 399
Borrowings 7 7,356 5,011
Other non-current liabilities 2,431 2,252
Deferred Tax Liability 1,169 1,318
Provisions 786 860
Total non-current liabilities 11,948 9,840
CURRENT LIABILITIES
Trade and other payables 16,607 16,802
Lease liability 492 492
Borrowings 7 261 11
Total current liabilities 17,360 17,305
------------------------------------------ ----- ------------- ---------
TOTAL LIABILITIES 29,308 27,145
------------------------------------------ ----- ------------- ---------
NET ASSETS 23,653 22,548
========================================== ===== ============= =========
Equity attributable to owners of
the parent
Issued share capital 16,386 16,373
Share premium 47,667 47,360
Other reserves 570 261
Reverse acquisition reserve (35,246) (35,246)
Foreign currency translation reserve (243) (138)
Accumulated losses (5,368) (5,985)
------------------------------------------ ----- ------------- ---------
Total equity attributable to owners
of the parent 23,766 22,625
------------------------------------------ ----- ------------- ---------
Non-controlling interest (113) (77)
------------------------------------------ ----- ------------- ---------
Total equity 23,653 22,548
========================================== ===== ============= =========
CONSOLIDATED STATEMENTS OF CASHFLOWS
For the six month period ended 31 December 2022
Period Period Year to
to 31 December to 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
---------------- ---------------- ---------
Cash flow from operating activities
Operating profit / (loss) - continuing
operations 581 (1,014) (1,491)
Adjustments for:
Depreciation and amortisation 684 401 2,636
Finance cost (net) 143 158 264
Taxation (150) - -
Share based payment 309 170 520
Share of loss in associate - 30 -
Foreign exchange movement - 12 -
Gain on derecognition of contingent
consideration (448) - (1,032)
-------------------------------------------- ---------------- ---------------- ---------
Operating cashflow before working
capital movements 1,119 (243) 897
(Increase) / decrease in trade and
other receivables (3,906) 65 (9,857)
(Decrease) / increase in trade and
other payables 664 (2,612) 165
Decrease / (increase) in inventories 68 (42) (95)
Decrease / (increase) in deferred
income 53 (414) 2,650
Net cash (outflow) /
inflow from operating activities (2,002) (3,246) (6,240)
-------------------------------------------- ---------------- ---------------- ---------
Cash flow from investing activities
Cash acquired on acquisition of
business - 2,800 4,007
Cash paid to acquire subsidiaries - (10,582) (11,081)
Expenditure on intangible assets (535) (457) (401)
Purchase of property, plant and
equipment (93) (117) (294)
-------------------------------------------- ---------------- ---------------- ---------
Net cash (outflow) from investing
activities (628) (8,356) (7,769)
-------------------------------------------- ---------------- ---------------- ---------
Cash flows from financing activities
Interest (paid) received (130) (97) (188)
Repayment of lease liabilities (39) (109) (347)
Net proceeds from the issue of shares - 11,382 11,382
Net proceeds from loans and borrowings 2,445 - 4,891
Repayment of borrowings - (333) (3,287)
-------------------------------------------- ---------------- ---------------- ---------
Net cash inflow from financing activities 2,276 10,843 12,451
-------------------------------------------- ---------------- ---------------- ---------
Net decrease in cash and cash equivalents (354) (759) (1,558)
Effect of exchange rates on cash 5 15 28
Cash and cash equivalents at the
start of the period 1,802 3,332 3,332
Cash and cash equivalents at the
end of the period 1,453 2,588 1,802
============================================ ================ ================ =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2022
Reverse Foreign Non
Share Share Acqn. Other Currency Accum. Control Total
Capital Premium Reserve Reserves Reserve Losses Interest Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July
2022 16,373 47,360 (35,246) 261 (138) (5,985) (77) 22,548
Translation
of foreign
operations - - - - (105) - - (105)
Profit for
the period - - - - - 617 (36) 581
---------------------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Total comprehensive
loss for the
period - - - - (105) 617 (36) 476
----------
Issue of shares
during the
period 13 307 - - - - - 320
Share based
payments - - - 309 - - - 309
Total transactions
with owners 13 307 - 309 - - - 629
---------------------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Balance at
31 December
2022 16,386 47,667 (35,246) 570 (243) (5,368) (113) 23,653
====================== ========= ========= ========= ========== ========== ======== ========== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2021
Reverse Foreign Non
Share Share Acqn. Other Currency Accum. Control Total
Capital Premium Reserve Reserves Reserve Losses Interest Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July
2021 16,071 33,014 (35,246) 601 (13) (4,554) - 9,873
Translation
of foreign
operations - - - - 107 - - 107
Loss for the ( 932
period - - - - - ) (82) (1,014)
---------------------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Total comprehensive
loss for the ( 932
period - - - - 107 ) (82) (907)
----------
Shares issued
during the
period 296 14,771 - - - - - 15,067
Cost of share
issue - (618) - - - - - (618)
Share based
payments - - - 170 - - 170
Acquisition
of new entity - - - - - - (241) (241)
---------------------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Total transactions
with owners 296 14,153 - 170 - - (241) 14,378
---------------------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Balance at
31 December
2021 16,367 47,167 (35,246) 771 94 (5,486) (323) 23,344
====================== ========= ========= ========= ========== ========== ======== ========== ========
SELECTED NOTES TO THE FINANCIAL INFORMATION
For the six month period ended 31 December 2022
1 Basis of preparation
The condensed consolidated interim financial statements of
eEnergy Group plc (the "Group") for the six month period ended 31
December 2022 have been prepared in accordance with Accounting
Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 30 June 2022, which was prepared under UK adopted
international accounting standards (IFRS), and any public
announcements made by eEnergy Group plc during the interim
reporting period and since.
These condensed consolidated interim financial statements do not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 June 2022 prepared under IFRS have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been
audited.
Basis of preparation - going concern
The interim financial statements have been prepared under the
going concern basis.
At 31 December 2022 the Group had unrestricted cash reserves of
GBP1.1m (30 June 2022: GBP1.4m; 31 December 2021: GBP2.4m).
The Directors have a reasonable expectation that the company and
Group have sufficient resources to continue to operate for the
foreseeable future. The Group has shown significant improvement in
revenue and operating profitability. To help facilitate the growth
of the company, and finance working capital, the company raised
GBP2.5m of additional funding in November 2022.
In assessing whether the going concern assumption is
appropriate, the Directors have taken into account all relevant
information about the current and future position of the Group and
Company, including the current level of resources and the ability
to trade within the terms and covenants of its loan facility.
Taking these matters into consideration, the Directors consider
that the continued adoption of the going concern basis is
appropriate. The interim financial statements do not reflect any
adjustments that would be required if they were to be prepared
other than on a going concern basis.
Accounting policies
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting
period.
3. SEGMENT REPORTING
The following information is given about the Group's reportable
segments:
The Chief Operating Decision Maker is the Board of Directors.
The Board reviews the Group's internal reporting in order to assess
performance of the Group. Management has determined the operating
segments based on the reports reviewed by the Board.
The Board considers that during the six month period ended 31
December 2022 and 31 December 2021, the Group operated in two
business segments, the Energy Management segment and the Energy
Services segment, which largely comprised of LED lighting
solutions.
Energy Energy
Mgmt Services Central Group
------------------------------------ -------- ---------- -------- ---------
2022 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ---------- -------- ---------
Revenue - Total 6,604 8,520 - 15,124
Cost of sales (1,532) (5,249) - (6,781)
-------- ---------- -------- ---------
Gross Profit 5,072 3,271 - 8,343
Operating expenses (3,359) (2,291) - (5,650)
-------- ---------- -------- ---------
Operating EBITDA 1,713 980 - 2,693
Central management costs - - (1,185) (1,185)
Adjusted EBITDA 1,713 980 (1,185) 1,508
Depreciation and amortisation (401) (70) (213) (684)
Finance and similar charges (4) (52) (87) (143)
-------- ---------- -------- ---------
Profit / (loss) before exceptional
items 1,308 858 (1,485) 681
Exceptional items (134) (129) 13 (250)
-------- ---------- -------- ---------
Profit / (loss) before tax 1,174 729 (1,472) 431
-------- ---------- -------- ---------
Taxation credit - - 150 150
-------- ---------- -------- ---------
Profit / (loss) after tax 1,174 729 (1,322) 581
======== ========== ======== =========
Non-controlling interest (36) - - (36)
Profit / (loss) attributable
to owners of the Company 1,210 729 (1,322) 617
======== ========== ======== =========
Net Assets
Non current assets 26,530 3,862 404 30,796
Current assets 7,644 12,079 2,442 22,165
-------- ---------- -------- ---------
Assets - Total 34,174 15,941 2,846 52,961
Liabilities (9,849) (10,435) (9,024) (29,308)
--------
Net assets 24,325 5,506 (6,178) 23,653
======== ========== ======== =========
Energy Energy
Mgmt Services Central Group
------------------------------------ -------- ---------- -------- ---------
2021 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ---------- -------- ---------
Revenue 4,832 4,760 - 9,592
Cost of sales (1,107) (2,960) - (4,067)
-------- ---------- -------- ---------
Gross Profit 3,725 1,800 - 5,525
Operating expenses (2,298) (1,524) - (3,822)
-------- ---------- -------- ---------
Operating EBITDA 1,427 276 - 1,703
Central management costs - - (896) (896)
Adjusted EBITDA 1,427 276 (896) 807
Depreciation and amortisation (344) (56) (1) (401)
Finance and similar charges (24) (184) (19) (227)
-------- ---------- -------- ---------
Profit / (loss) before exceptional
items 1,059 36 (916) 179
Exceptional items (139) (63) (991) (1,193)
-------- ---------- -------- ---------
Profit / (loss) before tax 920 (27) (1,907) (1,014)
-------- ---------- -------- ---------
Taxation charge - - - -
-------- ---------- -------- ---------
Profit / (loss) after tax 920 (27) (1,907) (1,014)
======== ========== ======== =========
Non-controlling interest (82) - - (82)
Profit / (loss) attributable
to owners of the Company 1,002 (27) (1,907) (932)
======== ========== ======== =========
Net Assets
Non current assets 23,269 3,932 4,385 31,586
Current assets 6,878 4,161 524 11,563
-------- ---------- -------- ---------
Assets - Total 30,147 8,093 4,909 43,149
Liabilities (8,891) (6,167) (4,747) (19,805)
--------
Net assets 21,256 1,926 162 23,344
======== ========== ======== =========
4. EXCEPTIONAL ITEMS
Operating expenses include items that the Directors consider to
be exceptional by their nature. These items are:
Period Period
to to Year to
31 December 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------- ---------
Acquisition related expenses - 820 1,273
Changes to initial recognition
of contingent consideration (448) - (1,032)
Incremental restructuring and
integration costs 389 198 1,181
Share based payment expense 309 175 520
Other strategic investments - - 347
Total exceptional expenses 250 1,193 2,289
------------- ------------- ---------
Acquisition expenses are the costs incurred in completing the
"Buy and Build" strategy associated with acquisitions and strategic
investments.
The share based payment charge reflects the non cash cost of the
Management Incentive Plan awards made on 7 July 2020 and the award
of options made to the senior management team on 7 December 2021
which are being amortised over their three year vesting period.
5. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
calculated by dividing the profit or loss for the year by the
weighted average number of ordinary shares in issue during the
year.
Period to Period to Year to 30
31 Dec 2022 31 Dec 2021 June 2022
------------------------------------- ------------- ------------- ------------
Profit / (loss) profit for
the year from continuing
operations attributable to
owners of the Company - GBP 617,000 (932,000) (1,431,000)
Weighted number of ordinary
shares in issue 350,036,790 304,325,269 323,783,394
Number of shares for diluted
earnings per share 417,158,305 - -
------------------------------------- ------------- ------------- ------------
Basic earnings per share
from continuing operations
- pence 0.18p (0.31)p (0.44)p
Diluted Basic earnings per
share from continuing operations
- pence 0.15p (0.31)p (0.44)p
-------------------------------------- ------------- ------------- ------------
The comparative periods do not include a diluted earnings per
share calculation, or number of shares for the diluted earnings per
share calculation, since the business was loss-making in those
periods.
6. INTANGIBLE ASSETS
Customer Trade
Goodwill Software relation-ships names Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- ---------------- --------- ---------
Cost
At 1 July 2022 23,816 1,258 4,311 1,594 30,979
Adjustment to goodwill
on acquisition (315) - - - (315)
Additions in the
period - 653 - - 653
At 31 December
2022 23,501 1,911 4,311 1,594 31,317
========= ========= ================ ========= =========
Amortisation
At 1 July 2022 - (219) (433) (1,594) (2,246)
Amortisation in
the period - (164) (241) - (405)
At 31 December
2022 - (383) (674) (1,594) (2,651)
--------- --------- ---------------- --------- ---------
Net book value
at
30 June 2022 23,816 1,039 3,878 - 28,733
--------- --------- ---------------- --------- ---------
Net book value
at
31 December 2022 23,501 931 3,637 - 28,666
========= ========= ================ ========= =========
7. BORROWINGS
31 December 31 December 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------- ------------ ------------ ---------
Current
Borrowings 261 579 11
261 579 11
------------- ------------ ------------ ---------
Non-current
Borrowings 7,356 2,367 5,011
7,356 2,367 5,011
------------- ------------ ------------ ---------
In February 2022 the Group refinanced substantially all of its
existing bank indebtedness and consolidated its borrowings into a
single GBP5,000,000, four year, revolving credit facility provided
to eEnergy Holdings Limited, an intermediate holding company in the
Group. The new facility is secured by way of debentures granted to
the lender by all of the Group's trading subsidiaries. The facility
includes covenants relating to debt service cover and gearing and
is repayable on or before 12 February 2024.
During the current period the Group secured a further
GBP2,525,000 in subordinated debt which has been structured secured
discounted capital bonds. The bonds are being issued at a 21.29%
discount to their face value (equivalent to a discount rate of
1.25% per month plus a 2% repayment fee) and are due to be redeemed
by the Company (through the payment of in aggregate GBP3,207,754)
on or before 24 May 2024 (in respect of GBP2,000,000) and on or
before 21 June 2024 (in respect of GBP525,000).
Maturity of the borrowings as of 31 December 2022 are as
follows:
GBP'000
----------------------- --------
Current 261
Due between 1-2 years 7,356
Due between 2-5 years -
Due beyond 5 years -
----------------------- --------
7,617
----------------------- --------
8. CASH & CASH EQUIVALENTS
Period to Period to Year to 30
31 Dec 2022 31 Dec 2021 June 2022
--------------------- ------------- ------------- -----------
Unrestricted Cash 1,050 2,430 1,380
Restricted Cash 403 158 422
---------------------- ------------- ------------- -----------
1,453 2,588 1,802
--------------------- ------------- ------------- -----------
Restricted cash relates to financing arrangements and customer
collections.
9. RELATED PARTY TRANSACTIONS
Key management personnel are considered to the Board of
Directors. The amount payable to the Board of Directors for the six
months ended 31 December 2022 was GBP400,509 (31 December 2021:
GBP563,000).
10. EVENTS AFTER THE BALANCE SHEET DATE
Nothing to disclose.
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END
IR DDGDXXXDDGXR
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