TIDMGOOD
RNS Number : 4336Q
Good Energy Group PLC
12 September 2017
Good Energy Group PLC
Unaudited results for the six months ended 30 June 2017
Ongoing progress transitioning for long-term sustainable
growth
Good Energy Group PLC, which supplies and generates 100%
renewable electricity and carbon-neutral gas to UK homes and
businesses, today announces its results for the six months ended 30
June 2017.
Financial highlights (continuing operations)
-- Revenue is up 16% to GBP52.0m (H1 2016: GBP44.8m) driven by
business volume consumption growth
-- Gross profit of GBP14.4m (H1 2016: GBP14.8m); gross profit
margin of 28% (H1 2016: 33%), reflecting lower gas usage, the
increasing proportion of lower gross margin business customers in
our customer mix, and our decision to freeze price rises until
March
-- Profit before tax decreased 37% to GBP0.7m (H1 2016:
GBP1.2m), including restructuring and investment costs of GBP0.9m
year to date
-- GBP16.8m gross funds raised from our second corporate bond,
reducing our ongoing financing costs
-- Net debt at GBP60.4m as at 30 June 2017 following success of
Good Energy Bonds II (H1 2016: GBP50.7m)
Operational highlights
-- Total customer meters increased by 5% up to 251,800 (H1 2016:
239,750) driven by a growth in Feed-in-Tariff ("FIT") customer
meters
-- Continued strong demand from business customers with Neal's
Yard Remedies, BAFTA and Hay Festival recently signing up -
half-hourly volume supplied increased 103%
-- Electricity and gas meters both decreased slightly from H1
2016 and are down by a combined 1% due to higher churn from
maturing collective customer switch deals
-- The first phase of restructuring Good Energy to make it more
efficient and Fit-for-Growth is well underway. Annualised savings
of GBP1m already delivered in 2017, with further cost and
efficiency savings expected in 2018
"So far in 2017 we've made very good progress on the strategic
direction of Good Energy by adapting our business model in a highly
competitive and dynamic energy market.
Our Fit-for-Growth programme and investment in our digital
capabilities and systems are crucial first steps and, with further
investment in our core business and the start of our new
propositions in electric vehicles and storage planned in the second
half of the year, we believe Good Energy is well positioned to
succeed in the energy marketplace for the future."
Juliet Davenport OBE, Chief Executive
Six months ended 30 June H1 2017 H1 2016 Change
GBP million (unless otherwise
stated)
-------------------------------- -------- -------- -------
Revenue 52.0 44.8 +16%
-------------------------------- -------- -------- -------
Gross profit 14.4 14.8 -3%
-------------------------------- -------- -------- -------
Gross profit margin (%) 27.7 33.1 -16%
-------------------------------- -------- -------- -------
EBITDA 4.7 6.0 -21%
-------------------------------- -------- -------- -------
Operating Profit 3.0 3.4 -11%
-------------------------------- -------- -------- -------
Profit before tax 0.7 1.2 -37%
-------------------------------- -------- -------- -------
Profit - continuing operations 0.8 0.9 -20%
-------------------------------- -------- -------- -------
Basic earnings per share
- continuing operations
(pence) 4.7 6.5 -28%
-------------------------------- -------- -------- -------
Diluted earnings per share
- continuing operations
(pence) 4.5 6.3 -29%
-------------------------------- -------- -------- -------
Discontinued operations -0.3 0.2 -230%
-------------------------------- -------- -------- -------
Profit 0.5 1.2 -57%
-------------------------------- -------- -------- -------
Basic earnings per share
(pence) 3.1 7.9 -61%
-------------------------------- -------- -------- -------
Diluted earnings per share
(pence) 2.9 7.6 -62%
-------------------------------- -------- -------- -------
Interim dividend per share
(pence) 1 1 -
-------------------------------- -------- -------- -------
Net Debt 60.4 50.7 +19%
-------------------------------- -------- -------- -------
Electricity total customers
(number) 71,150 72,250 -2%
-------------------------------- -------- -------- -------
Gas total customers (number) 42,750 43,000 -1%
-------------------------------- -------- -------- -------
Feed-in-Tariff customers
(number) 137,900 124,500 + 11%
-------------------------------- -------- -------- -------
Enquiries:
Good Energy Group PLC +44 (0) 1249 766 795
Juliet Davenport, Chief Executive Officer (CEO)
Denise Cockrem, Chief Financial Officer (CFO)
Investec Bank plc +44 (0) 207 597 4000
Jeremy Ellis
Sara Hale
Smithfield +44 (0) 20 3047 2543
Alex Simmons
Brett Jacobs
Notes to editors:
-- Good Energy is a fast growing green energy company,
generating and selling 100% renewable electricity and supplying our
carbon-neutral Green Gas to households and businesses across the
UK.
-- An AIM-listed PLC, and founder member of the Social Stock
Exchange, Good Energy was founded in 1999 to empower households and
business to address climate changes through their choice of energy
supplier.
-- Good Energy has been awarded 4 out of 5 stars by Which? for
customer service in 2016 and 2017, and has been awarded a "Best
Buy" by Ethical Consumer.
-- As at 30 June 2017, Good Energy had over 71,150 renewable
electricity customers and 42,750 carbon neutral gas customers. It
also provides Feed-in Tariff administration services to over
137,900 sites, totalling over 251,800.
-- Good Energy is the owner of Delabole Wind Farm, the UK's
first commercial onshore wind farm and owns and operates Hampole
Wind Farm, near Doncaster. The Company also owns and operates seven
solar farms.
-- Good Energy has a net promoter score (NPS) of 45. NPS is an
index ranging from -100 to 100 that measures the willingness of
customers to recommend a company's products or services to others.
It's used as a proxy for gauging the customer's overall
satisfaction with a company's product or service and the customer's
loyalty to the brand.
-- Good Energy has won a number of awards, including Renewable
Energy Association Company of the Year Award 2016, Business Green
Company of the Year 2015, and was named Social Impact Company of
the Year at the 2014 and 2015 Small Cap awards.
Chief Executive Officer's Review
Overview
Good Energy was founded in 1999 to provide homes and businesses
with the choice to be part of a sustainable solution to climate
change. Since then we have grown profitably and delivered
consistently on this ambition, and in so doing have proven that
renewable energy can be a commercial success story. As we continue
to grow, we recognise that we need to invest and evolve the Company
in order to protect the profitability of our business model for our
stakeholders in a fiercely competitive and dynamic energy
market.
In March 2017, we announced important changes to how we will
achieve and measure our long-term growth ambitions. This included a
significant restructuring of our business, designed to reduce our
long term cost base by simplifying our operating model and
upgrading our systems and processes. Rather than focusing on
specific customer growth targets and chasing high volumes of
customer growth at the expense of margin, Good Energy is targeting
sustainable, profitable growth through improved operational
efficiency, enhanced digital customer service capabilities, and the
development of new revenue streams from propositions that will
accelerate the acceptance and widespread adoption of electric
vehicles (EV) and emerging clean energy technologies including
battery storage. This approach aligns with our purpose of powering
the choice for a greener and cleaner future together and our
long-term ambition to help realise a more sustainable energy market
for the UK.
To deliver sustainable profitable growth we have reviewed the
internal efficiency of the business and as a result in the first
half of 2017 we have implemented the first phase of our
reorganisation. This has meant changes to our organisational
structure and investment in our systems and digital capabilities
like our Customer Information System ("CIS"), which will continue
to be the focus for the second half of the year. This ongoing
efficiency initiative is our 'Fit-for-Growth' programme which has
already delivered annualised administration cost savings of GBP1m
in the first six months of 2017. We expect this programme to
continue into 2018 and to see further benefits from this plan
coming through next year.
The implementation of our new CIS is critical to ensuring that
we are prepared for implementing SMART metering, enhancing customer
experience, and reducing our costs to serve. Our CIS will also
provide the platform around which we will add our wider
propositions on electric vehicles and battery storage. As expected
with a systems change there have been some challenges and some
delays to issuing bills which has resulted in lower operational
cash flow than normal. We have a dedicated team resolving these
billing issues and expect the system to be fully bedded in by the
end of the year.
As part of a wider strategy to reduce our ongoing financing
costs, our second corporate bond, offered at an interest rate of
4.75%, was a success and raised GBP16.8m. We are encouraged by the
support we continue to receive from our customers and investors.
The proceeds will now help to fund the next phase of our growth
initiatives in battery storage, EV and business consultancy.
In March we also announced that we were stopping all further
generation development activities. This was due to the continued
lack of support from the Government for UK onshore wind and large
scale solar. Following the completion of our two final subsidy
eligible solar farms, our focus has shifted to working on existing
sites and producing value to our stakeholders where possible. We
are already pursuing alternative routes to sourcing renewable power
and in March completed an agreement with DONG Energy, to buy power
from their offshore wind farm Westermost Rough. This is a great
example of where we work in partnership with others to continue to
deliver 100% renewable electricity as our customer base grows.
We operate in an increasingly competitive market and one where
the demand for green energy tariffs continues to grow as our
business volume consumption growth of 103% demonstrates. That said,
growth in domestic electricity and gas customers were lower than we
have achieved over the last five years. This was due to a slowdown
in our marketing initiatives while we resolved initial issues with
our new CIS which is expected to be fully operational by the end of
2017. The second factor was higher customer churn which was driven
by a combination of collective switching deals completed in
previous years maturing and record switching rates experienced
across the marketplace. Our Fit-for-Growth programme is key to
ensuring that Good Energy adapts to these market conditions,
offering competitive propositions, increasing our market
penetration, whilst maintaining our margins.
Despite domestic customer growth over the period not matching
the average levels achieved over the last five years we are pleased
with the progress we are making in the business market,
particularly with small and medium sized enterprises ("SMEs").
Whilst the gross margin of this customer type is lower than
domestic customers, the gross profit contribution per customer is
higher. This is because of the higher volumes supplied to these
customer types and we are confident that with the efficiency and
cost-to-serve saving initiatives underway, we are making progress
towards improving Good Energy's long-term profitability.
Strategy and business model
The UK energy market continues to evolve rapidly and our
business model must evolve with it to take advantage of emerging
opportunities consistent with our purpose. Accordingly we are
prioritising the following strategic imperatives and evolving our
business model in the following ways:
Protect, evolve and grow our core business
The market for green renewable energy in the UK is expanding
rapidly. Support for renewable energy has remained around
75%-80%(1) and in the last two years the number of green tariffs
has almost tripled, driven by an ever-increasing realisation among
consumers and organisations that the choice of their energy
supplier can have a meaningful impact towards tackling climate
change.
Good Energy is adapting to the business to remain well placed to
benefit from these ongoing trends and has a differentiated market
position as a trusted and fair customer-focused supplier, whose
long-term ambitions are driven by a clear purpose. We focus on our
customer lifetime value, competing on delivering value through
proposition development and award winning customer service. Through
this approach, we can invest in the solutions that will accelerate
the zero carbon transition of the UK's energy market.
As seen in almost every market today, customer expectations are
changing, with digital now at the forefront of the experience.
Through the investment in our new CIS we have not only created a
platform that can handle more than 750,000 customers but also laid
the foundations for a truly digital customer experience.
By bringing digital to the forefront, we hope to enable a range
of new smart services and solutions for our domestic and business
customers, while at the same time lowering our cost to serve and
driving engagement. These could include more personalisation of our
propositions such as demonstrating the contribution each customer
has made to a greener grid, a slicker more intuitive user interface
centred around self-serve expected to be rolled out in the year
ahead, with more to come as the technology behind battery storage
and metering evolve. In addition, by mining our digital information
we are able to continue improving our understanding of our
customers and therefore the products and services that we provide,
identifying new sources of business growth and opportunities to
deliver greater efficiency.
We believe there is significant scope to grow our Small Medium
Enterprise ("SME") customer base as companies increasingly look to
demonstrate their commitment to sustainability. We have invested in
a new digital online quoting tool, which went live in June, as well
as a new sales team. These investments are already delivering
results with new customers such as Neal's Yard Remedies, BAFTA and
Hay Festival signing up recently.
SME customer growth is expected to accelerate in the last
quarter of this year as the new sales team starts to proactively
target customers with more competitive pricing as a result of our
improved cost model. Local tariffs will also be a focus as we look
to support local businesses with local power.
________________
(1) BEIS: Energy and Climate Change Public Attitude Tracker, Wave 21 (May 2017)
Build momentum in new businesses and provide solutions to
accelerate the transition to a zero carbon future
As the transition to a zero carbon future gathers pace, Good
Energy believes that it has a broader role to play as a market
enabler for domestic customers, businesses and communities. With
clean technology developing so rapidly, and a wide range of
solutions available, there is a lack of practical and impartial
advice and propositions that provide a commercial benefit to
consumers and organisations.
Consistent with our core purpose of creating and promoting the
conditions for a zero carbon future, we are conducting detailed
assessments of the available technologies and options that support
our purpose.
As a result, we have decided to explore opportunities to
generate new business and revenue from green business consultancy
and focus on commercial solutions and propositions, working with
technology providers and our customers to accelerate the acceptance
and wider adoption of EVs and emerging technologies in battery
storage solutions for businesses, infrastructure and transport
markets. To do this we will be supporting and advising on electric
vehicle systems, flexibility systems including battery storage and
on-site renewable energy systems.
From a consumer perspective, this could involve advice around
the sourcing, installation and management of a home EV charging and
tariff solution.
For a business, it could be how to use "behind the meter"
storage solutions to better manage generation from renewable
assets, consumption or change the cost structure of sourcing 100%
renewable energy from us.
We are currently working through the technical storage solution
for one of our long standing supply customers with a view to
getting contractual terms signed in October and ground works
started in November this year. This will be the first of many
storage projects we will undertake for our customers and shows an
innovative commercial approach to a growing market.
We will also be rolling out a commercial EV charging solution to
the market in the next three months, allowing business and
customers to conveniently charge their EV's at work and in public
places and have launched our new EV tariff designed to make
charging your EV with 100% renewable electricity more
affordable.
Our B2B FIT function has been streamlined significantly to
deliver an even better solution to our customers, delivering weekly
reporting and a registration timeline unrivalled in the industry.
We have already seen that these changes have attracted more
interest in our service with over 10,000 meters (10% of our
existing base) expected to be signed up this quarter.
We believe our approach represents a win, for customers,
investors, and the planet and we intend to structure our business
model to ensure our interests align with the way the needs of our
customers develop over the long term.
Generate future business opportunities from digitalisation
As we look to a time when all customers are on smart meters with
fully digital customer engagement, we believe another layer of
solutions will emerge that enable ever greater segmentation and
personalisation for consumers and businesses, enabling greater
differentiation in an increasingly crowded market place and
diversity in our business model.
The infrastructure required to enable this is not yet ready.
However the streamlining of our core business and proposition
development in the growth areas outlined above will ensure we are
well positioned to achieve our growth ambitions and deliver value
to our stakeholders in a way that is aligned to our purpose.
Regulatory, political and market environment
After two years of downgrading financial and policy support for
renewables, the Conservative government has recently made a number
of announcements supporting technologies that will help accelerate
the UK energy industry to a modern, decentralised and low carbon
structure. Investment in battery storage development and smart
energy system innovation, as well as support for EVs by banning all
new petrol and diesel cars and vans from 2040, are all welcome
steps by the Government in the right direction. We think this
evolution is a good way forward and with the opportunities it
creates and we believe our new strategy will put us at the heart of
this new landscape.
The other key focus for politicians in the energy sector ahead
of the general election in June 2017 was the potential introduction
of a price cap for standard variable tariffs. We could see a number
of consumer and competition issues with a universal price cap and
are therefore pleased that Ofgem is focussing the measure on
vulnerable consumers. At Good Energy, we would also support a
relative price cap putting a limit on price between suppliers'
cheapest and most expensive tariffs. We believe this is a simple
solution to make the energy market fairer and to avoid one group of
customers being subsidised by another. We also believe there are
improvements to be made around informing people on customer
service, the makeup of green products and the ethics of businesses
so they can make a more informed choice.
Chief Financial Officer's Review
Financial performance
For the continuing business (excluding discontinued operations
for generation development), consolidated revenue increased by 16%
to GBP52.0m (H1 2016: GBP44.8m) with the majority of the increase
attributed to the electricity supply business. Within electricity
supply the increase is largely due to the increasing proportion of
revenue supplied to business customers. We expect there to be
continued growth opportunities in the near term, particularly for
SME customers.
The consolidated gross profit decreased 3% to GBP14.4m (H1 2016:
GBP14.8m) delivering a gross margin of 28% (H1 2016: 33%). This
decrease in gross profit and margin was driven by a number of
factors. A greater proportion of the revenue received was from
business sales which, due to the larger volumes supplied, are able
to be delivered at lower gross margins. Margin was also impacted by
our price rise being postponed for as long as possible for the
benefit of customers during winter and to support customer
retention. The price change came in to effect at the start of March
on the back of increased wholesale and industry costs. The drop in
Electricity Supply gross profit was greater than expected due to
flat domestic customer growth and lower gas usage by our customers
compared to the first half of the prior year. FiT margins also
softened as expected, as a result of a lower proportion of revenue
being contributed by new customers which qualify for a greater
administration fee receivable in the first year of sign up.
Overall administration expenses remained flat on the previous
half year at GBP11.4m (H1 2016: GBP11.4m). Continued investment in
the new CIS, digital capabilities and restructuring was at GBP0.9m
in the first half of 2017 which was a similar level to H1 2016.
This investment was part of the first phase of our Fit-for-Growth
programme (Evolution) to improve the long-term profitability of the
Company which we will complete in 2017 and which has already
delivered GBP1m of annualised savings. In 2018 we will move into
the second phase of Fit-for-Growth (Revolution) which will focus on
reducing our costs to serve and making further efficiencies in our
support areas and these additional savings will be seen in 2018
results and beyond. In H1 2017 underlying cost growth of 5% was
partially offset by the sale of Oaklands solar farm as the profit
on sale is reflected in administration costs.
EBITDA decreased by 21% to GBP4.7m (H1 2016: GBP6.0m) and
operating profit decreased by 11% to GBP3.0m (H1 2016: GBP3.4m)
with both impacted by our margin contraction described above.
Net finance costs rose by 3% to GBP2.3m (H1 2015: GBP2.3m) as
borrowings on Group facilities marginally increased as operational
cash flow was impacted by some delays in billing.
Profit before tax decreased 37% to GBP0.7m (H1 2016: GBP1.2m)
and included our investments and decreased gross margin as
explained above. H1 2016 included the profit on sale of Wrotham
Heath of GBP0.5m.
The Board is pleased to announce an interim dividend of 1p per
ordinary share for the period 30 June 2017 (H1 2016: 1p). As in
previous periods, the Board is offering shareholders the
opportunity to elect to receive dividends in the form of new shares
in the Company as an alternative to a cash dividend payment. The
dividend timetable will be announced separately.
Total Assets increased 16% to GBP116.0m (H1 2016: GBP99.6m) due
to increased trade receivables which reflects a temporary increase
in debtors as billing has been delayed following the implementation
of the new CIS.
Total borrowings increased by 18% to GBP71.6m (H1 2016:
GBP60.5m) as we completed our second successful corporate bond
raise for GBP16.8m of which GBP6.5m was rolled over from investors
in our first corporate bond.
The share premium account remained at GBP12.5m (H1 2016:
GBP12.6m) with no share offers completed during the period.
Operational cash outflow was GBP8.4m (H1 2016: an inflow of
GBP0.4m). This outflow is higher than we would normally expect in
the first half of the year due to the implementation of the new CIS
which resulted in customer billing delays. We estimate that these
delays had a negative impact of around GBP10m on our cash flow, the
steps taken to stabilise the CIS will improve our operational cash
flow in the second half of the year.
The existing working capital overdraft facility with Lloyds Bank
was renewed and extended in April 2017 with a GBP5m increase in the
facility to GBP12.5m. This facility was undrawn as at 30 June
2017.
Generation and development
Good Energy currently owns and operates eight solar sites and
two wind farms with a total of 57.5MW (H1 2016:52MW) of installed
capacity.
In the first half of 2017 we successfully completed two new 5MW
solar sites, "Newton Downs" in Devon and "Brynwhilach" near
Swansea. The completion of these projects was an important step
towards maximising the value of our development activities over the
past 5 years for our stakeholders. We take a prudent approach to
the valuation of our operational generation assets and record them
at cost of development less accumulated depreciation, rather than
at the current market value.
In January, we completed the sale of our 5MW Oaklands solar site
to Eneco UK Limited for GBP5.8m. This was the first sale of a site
fully constructed and developed by Good Energy and clearly
showcased the achievements of our development team. Importantly
Good Energy retains an option to purchase up to 50% of the site's
power and continue to provide management services.
We are currently exploring further opportunities to realise
value from our operational assets and reduce our ongoing financing
costs. Our development portfolio also contains some opportunities
and risks depending on further changes in market conditions and
government policy.
The Group is discontinuing its generation development activities
but is exploring a number of potential options to realise value
from the portfolio, through partnerships or sales to external
parties who will continue to develop the sites.
The total output from our generation portfolio increased 5% to
45.3GWh (H1 2016: 43.2GWh). Solar output increased 9% to 20.7GWh
(H1 2016: 19.0GWh) with output increase from the two new sites
being offset by the sale of Oaklands. Wind output was similar to H1
2016 with 1% increase at 24.5GWh (H1 2016: 24.2GWh).
One outcome of government policy changes over the last 18 months
is that we are stepping away from energy generation development,
previously a core part of our business. While we have been
successful in creating, utilising and monetising energy generation
assets, the market has moved in favour of large scale developers
with preferential pricing and access to low-cost finance. Going
forward we will seek to realise value from existing infrastructure,
support onsite development of renewable energy with our customers,
and secure additional supply from partners, such as our recent
offshore wind deal with DONG Energy. The deal with DONG secures 12%
of the output of the 210MW Westermost Rough Wind Farm operated by
the Danish energy group in the North Sea, enough renewable
electricity to power more than 26,000 average homes. This agreement
will help us meet ever-increasing demand for 100% renewable
electricity as our customer base grows.
Good Energy Bonds II
Good Energy has a long history of inviting its customers to
invest in the business. In May 2017 we launched our second
corporate bond, offering our customers, existing bondholders,
shareholders and new investors the opportunity to support the
Company in its next phase of growth. The support and vote of
confidence in the business, its new strategy and purpose, was
overwhelming with GBP16.8m raised. Proceeds will be used to invest
in our core business of supplying 100% renewable energy to more UK
customers and the roll-out of new sustainable energy solutions in
areas such as battery storage, electric vehicles and business
consultancy to meet consumer and business needs in the evolving UK
energy market.
The bond was issued on 30 June 2017; it has a coupon rate of
4.75% (effective 5.00% Good Energy customers) and a four year term
and is a positive step towards lowering the Company's ongoing
financing costs.
Outlook
2017 has been a year of transition for Good Energy. The market
is evolving with a significant number of new entrants chasing low
margin, less sticky customers and a shift towards a more devolved
model of energy distribution. The business continues to prioritise
investment in sustainable long-term profitability and has made the
decision to invest GBP1.5m into our FIT 4 Growth, Smart and Digital
programmes which will deliver further cost savings and support
opportunities for profitable growth in 2018 and beyond. This
investment will impact the full year performance for 2017 and we
now expect the full year performance to be break-even to a modest
profit. This full year expected outturn assumes that domestic sales
growth remains broadly flat for the remainder of the year, solar
site sales currently planned complete within the financial year and
there are no work-in-progress write offs due to changes in market
conditions and government policy. Historically site sales have been
part of the on-going business model and the proceeds have been
invested to build further generation sites and, more latterly, to
support investment in the business. Going forward, with the shift
in strategy away from the development of renewable assets this
contribution from site sales is not expected to continue.
In 2018 we expect to see continued strong growth in business
volumes together with more moderate growth in domestic sales. We
believe there will be continued competitive pressure on margins and
a continuing shift in our customer and product mix, which will
reduce the overall gross margin percentage. We will start to see
the impact of our efficiency initiatives on our costs to serve with
further streamlining of our Group support functions planned to
bring down administration costs. In addition, we will continue to
make investments in our core business, particularly in digital and
SMART, and also towards our strategic growth initiatives in
storage, EV and business consultancy and will provide a further
update on this towards the end of the year.
Summary
We are working hard on evolving Good Energy to capture the
emerging opportunities available to us, our customers and our
investors, as the UK energy industry transitions to a modern,
decentralised and low carbon structure.
So far this year we have implemented our CIS, reorganised our
operational structure, and started streamlining the business to
focus on the areas of most value to all our stakeholders. This will
allow us to invest in propositions built around emerging
technologies including storage, demand side response and electric
vehicles. We remain confident about the outlook for Good Energy to
deliver sustained profitability in the renewable energy sector.
Consolidated Statement of Comprehensive Income (Un-audited)
For the 6 months ended 30 June 2017
Notes Un-audited Un-audited Audited
6 months 6 months 12 months
to 30/06/2017 to 30/06/2016 to 31/12/2016
GBP000's GBP000's GBP000's
REVENUE 52,038 44,781 89,651
Cost of Sales (37,633) (29,947) (62,538)
GROSS PROFIT 14,405 14,834 27,113
Administrative Expenses (11,368) (11,430) (20,914)
OPERATING PROFIT 3,037 3,404 6,199
Finance Income 19 11 18
Finance Costs (2,326) (2,255) (4,195)
PROFIT BEFORE TAX 730 1,160 2,022
Taxation 28 (211) (51)
PROFIT FOR THE PERIOD FROM
CONTINUING OPERATIONS 758 949 1,971
DISCONTINUED OPERATIONS
Profit/(Loss) from discontinued
operations, after tax 5 (262) 202 (588)
PROFIT FOR THE PERIOD
496 1,151 1,383
Other comprehensive income
for the period, net of tax - - -
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD ATTRIBUTABLE
TO OWNERS OF THE PARENT COMPANY 496 1,151 1,383
Earnings per share - Basic 7 3.1p 7.9p 9.1p
- Diluted 7 2.9p 7.6p 8.8p
Earnings per share (continuing
operations) - Basic 7 4.7p 6.5p 12.9p
- Diluted 7 4.5p 6.3p 12.5p
Consolidated Statement of Financial Position (Un-audited)
As at 30 June 2017
Notes Un-audited Un-audited Audited
30/06/2017 30/06/2016 31/12/2016
GBP000's GBP000's GBP000's
ASSETS
Non-current assets
Property, plant and
equipment 62,393 60,668 58,247
Intangible assets 3,694 2,727 3,801
Restricted deposit assets 3,085 2,833 2,831
Available-for-sale financial
assets 500 500 500
------ ------------ ------------ ------------
Total non-current assets 69,672 66,728 65,379
Current assets
Inventories 6,676 6,249 2,858
Trade and other receivables 25,581 14,614 16,204
Current tax receivable - - 167
Cash and cash equivalents 8,132 6,832 6,289
Current assets held
for sale - - 5,095
------ ------------ ------------ ------------
40,389 27,695 30,613
Assets held for distribution 5 5,952 5,199 6,941
------ ------------ ------------ ------------
Total current assets 46,341 32,894 37,554
------ ------------ ------------ ------------
TOTAL ASSETS 116,013 99,622 102,933
------ ------------ ------------ ------------
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 825 823 825
Share premium account 12,546 12,558 12,546
EBT shares (1,015) (1,064) (1,015)
Retained earnings 9,288 8,306 8,689
------ ------------ ------------ ------------
Total equity attributable
to members of the parent
company 21,644 20,623 21,045
Non-current liabilities
Deferred taxation 600 502 684
Borrowings 57,413 55,770 40,277
------ ------------ ------------ ------------
Total non-current liabilities 58,013 56,272 40,961
Current liabilities
Borrowings 14,226 4,770 20,981
Trade and other payables 22,130 17,795 19,936
Current tax payable - 162 10
------ ------------ ------------ ------------
Total current liabilities 36,356 22,727 40,927
------ ------------ ------------ ------------
Total liabilities 94,369 78,999 81,888
------ ------------ ------------ ------------
TOTAL EQUITY AND LIABILITIES 116,013 99,622 102,933
------ ------------ ------------ ------------
Consolidated Statement of Changes in Equity (Un-audited)
For the 6 months ended 30 June 2017
Share Share Other Retained Total
Capital Premium Reserves Earnings
GBP000's GBP000's GBP000's GBP000's GBP000's
--------- --------- ---------- ---------- ---------
At 1 January 2016 748 9,786 (1,074) 7,483 16,943
--------- --------- ---------- ---------- ---------
Profit for the period - - - 1,151 1,151
Other comprehensive income - - - - -
for the period
--------- --------- ---------- ---------- ---------
Total comprehensive income
for the period - - - 1,151 1,151
Share based payments - - - 25 25
Issue of new shares 75 2,772 - - 2,847
Tax charge relating to
share option scheme - - - (20) (20)
Sale of shares by EBT - - 10 - 10
Dividend Paid - - - (333) (333)
Total contributions by
and distributions to
owners of the parent,
recognised directly in
equity 75 2,772 10 (328) 2,529
--------- --------- ---------- ---------- ---------
At 30 June 2016 823 12,558 (1,064) 8,306 20,623
--------- --------- ---------- ---------- ---------
At 1 July 2016 823 12,558 (1,064) 8,306 20,623
--------- --------- ---------- ---------- ---------
Profit for the period - - - 232 232
Other comprehensive income - - - - -
for the period
--------- --------- ---------- ---------- ---------
Total comprehensive income
for the period - - - 232 232
Share based payments - - - 205 205
Tax credit relating to
share option scheme - - - 118 118
Issue of ordinary shares 2 (12) - - (10)
Sale of shares by EBT - - 49 (14) 35
Dividend paid - - - (158) (158)
--------- --------- ---------- ---------- ---------
Total contributions by
and distributions to
owners of the parent,
recognised directly in
equity 2 (12) 49 151 190
--------- --------- ---------- ---------- ---------
At 31 December 2016 825 12,546 (1,015) 8,689 21,045
--------- --------- ---------- ---------- ---------
At 1 January 2017 825 12,546 (1,015) 8,689 21,045
--------- --------- ---------- ---------- ---------
Profit for the period - - - 496 496
Other comprehensive income - - - - -
for the period
--------- --------- ---------- ---------- ---------
Total comprehensive income
for the period - - - 496 496
Share based payments - - - 148 148
Tax charge relating to
share option scheme - - - (45) (45)
Dividend paid - - - - -
--------- --------- ---------- ---------- ---------
Total contributions by
and distributions to
owners of the parent,
recognised directly in
equity - - - 103 103
--------- --------- ---------- ---------- ---------
At 30 June 2017 825 12,546 (1,015) 9,288 21,644
--------- --------- ---------- ---------- ---------
Consolidated Statement of Cash Flows (Un-audited)
For the 6 months ended 30 June 2017
Notes Un-audited Un-audited Audited
30/06/2017 30/06/2016 31/12/2016
GBP000's GBP000's GBP000's
Cash flows from operating
activities
Cash inflow from continuing
operations (5,533) 4,143 11,570
Cash outflow from discontinued
operations 5 (403) (897) (914)
Finance income 19 - 18
Finance cost (2,696) (2,811) (4,208)
Income tax repaid 167 - 133
------------ ------------ ------------
Net cash flows from
operating activities 8 (8,446) 435 6,599
Cash flows from investing
activities
Purchase of property,
plant and equipment (5,568) (605) (4,958)
Purchase of intangible
fixed assets (435) (123) (1,851)
Deposit into restricted
accounts (254) (30) (29)
Disposal of subsidiary 5,795 - -
------------ ------------ ------------
Net cash flows used
in investing activities (462) (758) (6,838)
Cash flows from financing
activities
Payments of dividends - - (491)
Proceeds from borrowings 11,408 - 387
Repayment of borrowings (595) (430) (951)
Capital repayment of
finance leases (62) - (50)
Proceeds from issue
of shares - 2,824 2,837
Sale of own shares - 10 45
------------ ------------ ------------
Net cash flows from
financing activities 10,751 2,404 1,777
Net increase/(decrease)
in cash and cash equivalents 1,843 2,081 1,538
Cash and cash equivalents
at beginning of period 6,289 4,751 4,751
Cash and cash equivalents
at end of period 8,132 6,832 6,289
Notes to the Interim Accounts
For the 6 months ended 30 June 2017
1. General information and basis of preparation
Good Energy Group PLC is an AIM listed company incorporated and
domiciled in the United Kingdom under the Companies Act 2006. The
Company's registered office and its principal place of business is
Monkton Reach, Monkton Hill, Chippenham, Wiltshire, SN15 1EE.
The Interim Financial Statements were prepared by the Directors
and approved for issue on 12 September 2017. These Interim
Financial Statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2016 were approved by the
Board of Directors on 27 March 2017 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was
unqualified and did not contain statements under 498 (2) or (3) of
the Companies Act 2006 and did not contain any emphasis of
matter.
As permitted these Interim Financial Statements have been
prepared in accordance with UK AIM rules and the IAS 34, 'Interim
financial reporting' as adopted by the European Union. They should
be read in conjunction with the Annual Financial Statements for the
year ended 31 December 2016 which have been prepared in accordance
with IFRS as adopted by the European Union. The accounting policies
applied are consistent with those of the Annual Financial
Statements for the year ended 31 December 2016, as described in
those Annual Financial Statements. Where new standards or
amendments to existing standards have become effective during the
year, there has been no material impact on the net assets or
results of the Group.
Certain statements within this report are forward looking. The
expectations reflected in these statements are considered
reasonable. However, no assurance can be given that they are
correct. As these statements involve risks and uncertainties the
actual results may differ materially from those expressed or
implied by these statements.
The Interim Financial Statements have not been audited.
2. Going-concern basis
The Group meets its day to day capital requirements through
positive cash balances held on deposit or through its bank
facilities. The current economic conditions continue to create
opportunities and uncertainties which can impact the level of
demand for the Group's products and the availability of bank
finance for the foreseeable future. The Group's forecasts and
projections, taking account of the possible changes in trading
performances, show that the Group should be able to operate within
the level of its current facilities.
After making enquiries, the Directors have a reasonable
expectation that the group has adequate resources to continue in
operational existence for the foreseeable future. The Group
therefore continues to adopt the going concern basis in preparing
its consolidated financial statements.
3. Estimates
The preparation of Interim Financial Statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this set of condensed Interim Financial Statements,
the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the Annual
Financial Statements for the year ended 31 December 2016.
4. Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk, currency risk, credit risk and liquidity risk.
The condensed Interim Financial Statements do not include all
financial risk management information and disclosures required in
the Annual Financial Statements. They should be read in conjunction
with the Annual Financial Statements as at 31 December 2016.
5. Discontinued Operations
The Group is discontinuing its Generation Development activities
but is exploring a number of potential options to realise value
from the portfolio, through partnerships or sales to external
parties who will continue to develop the sites. The results of this
segment are shown in the segmental analysis of the Group statement
of comprehensive income in note 6.
The major class of assets of the Generation Development segment
classified as assets held for distribution relate solely to
Generation development site inventories.
6. Segmental analysis
H1 2017 Electricity FIT Gas Total Electricity Holding Total Generation Total
Supply Administration Supply Supply Generation Company/ - Development
Companies Consolidated Continuing (Discontinued)
Adjustments Operations
GBP000s
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
GBP'000's
------------ --------------- -------- ---------- ------------ ------------- ----------- --------------- ---------
Revenue 32,407 2,619 14,340 49,366 4,377 (1,705) 52,038 8 52,046
Cost of
sales (25,949) (1,576) (9,386) (36,911) (2,427) 1,705 (37,633) 70 (37,563)
------------ --------------- -------- ---------- ------------ ------------- ----------- --------------- ---------
Gross profit 6,458 1,043 4,954 12,455 1,950 - 14,405 78 14,483
Gross margin 20% 40% 35% 25% 45% 0% 28% 948% 28%
Admin costs (10,478) 579 (1,469) (11,368) (340) (11,708)
---------- ------------ ------------- ----------- --------------- ---------
Operating
profit/(loss) 1,977 2,529 (1,469) 3,037 (262) 2,775
Net finance
costs (28) (2,265) (14) (2,307) - (2,307)
---------- ------------ ------------- ----------- --------------- ---------
Profit/(loss)
before
tax 1,949 264 (1,483) 730 (262) 468
Taxation - 107 (79) 28 - 28
---------- ------------ ------------- ----------- --------------- ---------
Net
profit/(loss)
for the
period 1,949 371 (1,562) 758 (262) 496
Depreciation
&
amortisation (654) (1,310) 286 (1,678) (1) (1,679)
EBITDA 2,631 3,839 (1,755) 4,715 (261) 4,454
EBITDA is calculated using operating profit before exceptional
costs and any depreciation or amortisation charges in the year.
H1 2016 Electricity FIT Gas Total Electricity Holding Total Generation Total
Supply Administration Supply Supply Generation Company/ - Development
Companies Consolidated Continuing (Discontinued)
Adjustments Operations
GBP000s GBP000s
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
GBP'000's
------------ --------------- -------- ---------- ------------ ------------- ----------- --------------- ---------
Revenue 25,874 2,766 13,694 42,334 4,247 (1,800) 44,781 786 45,567
Cost of
sales (19,500) (1,545) (8,606) (29,651) (2,096) 1,800 (29,947) (339) (30,286)
------------ --------------- -------- ---------- ------------ ------------- ----------- --------------- ---------
Gross
profit/(loss) 6,374 1,221 5,088 12,683 2,151 - 14,834 447 15,281
Gross margin 25% 44% 37% 30% 51% 0% 28% 57% 34%
Admin costs (9,608) (196) (1,626) (11,430) (245) (11,675)
---------- ------------ ------------- ----------- --------------- ---------
Operating
profit/(loss) 3,075 1,955 (1,626) 3,404 202 3,606
Net finance
costs 1 (2,243) (2) (2,244) - (2,244)
---------- ------------ ------------- ----------- --------------- ---------
Profit/(loss)
before tax 3,076 (288) (1,628) 1,160 202 1,362
Taxation (247) 36 - (211) - (211)
---------- ------------ ------------- ----------- --------------- ---------
Net
profit/(loss)
for the
period 2,829 (252) (1,628) 949 202 1,151
Depreciation
&
amortisation (1,260) (1,294) - (2,554) (1) (2,555)
EBITDA 4,335 3,249 (1,627) 5,957 203 6,160
7. Earnings per share
The calculation of basic earnings per share at 30 June 2017 was
based on a weighted average number of ordinary shares outstanding
for the six months to 30 June 2017 of 15,988,964 (for the six
months to 30 June 2016: 14,552,351 and for the full year 2016:
15,238,849) after excluding the shares held by Clarke Willmott
Trust Corporation Limited in trust for the Good Energy Group
Employee Benefit Trust.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares to assume conversion of
all potentially dilutive ordinary shares. Potentially dilutive
ordinary shares arise from awards made under the Group's
share-based incentive plans. When the vesting of these awards is
contingent on satisfying a service or performance condition, the
number of the potentially dilutive ordinary shares is calculated
based on the status of the condition at the end of the period.
Potentially dilutive ordinary shares are actually dilutive only
when the Company's ordinary shares during the period exceeds their
exercise price (options) or issue price (other awards). The greater
any such excess, the greater the dilutive effect. The average
market price of the Company's ordinary shares over the six month
period to 30 June 2016 was 250p (for the six months to 30 June
2016: 206p and for the full year 2016: 223p). The dilutive effect
of share-based incentives was 866,206 shares (for the six months to
30 June 2016: 589,018 shares and for the full year 2016:
563,595).
8. Net cash flows from operating activities
The operating cashflow for the six months to 30 June 2017 is an
outflow of GBP8.4m (for the six months to 30 June 2016: GBP0.4m
inflow and for the full year 2016: GBP6.6m inflow). This includes
GBP0.2m (for the six months to 30 June 2016: GBP1.1m, for the full
year 2016: GBP0.6m) of spend on inventory relating to discontinued
operations. The outflow for the period is mainly due to trade
receivables and accrued income which are temporarily elevated as a
result of the new billing system implementation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KMGMLGMVGNZZ
(END) Dow Jones Newswires
September 12, 2017 02:01 ET (06:01 GMT)
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