TIDMGOOD
RNS Number : 5194T
Good Energy Group PLC
24 November 2021
Good Energy Group PLC
("Good Energy" or "the Company")
Acceleration of strategic shift to Energy & Mobility
services and Trading Outlook
Good Energy Group PLC (AIM: GOOD), the 100% renewable
electricity supplier and innovative energy services provider, today
announces the intended sale of its 47.5MW renewable asset portfolio
(the "Disposal") as part of an ongoing strategic shift to energy
and mobility services, driven by further investment in Zap - Map,
the UK's leading electric vehicle ("EV") mapping platform. The
Company also provides a trading outlook for the business ahead of
the year ending 31 December 2021.
Acceleration of strategic shift to Energy & Mobility
services
The company has outlined a clear strategic direction to
capitalise on a rapidly growing market in decentralised, digitised
clean energy and transport services based on 100% 'real' renewable
power. This strategic direction received strong shareholder support
throughout our successful defence, following the lapse of a recent
hostile takeover attempt.
As part of delivering this strategy, and after careful review of
Good Energy's capital requirement and balance sheet efficiency, the
Company is accelerating its transition from a renewable utility to
an energy services provider, leading in selected areas of electric
transport and decentralised generation as the energy transition
continues to gather pace.
With 100% renewable energy remaining core to the business, the
Company today announces three important steps towards accelerating
this strategic shift.
Generation portfolio sale process
The Company today announces the commencement of a sale process
of the entire 47.5MW generation portfolio. Proceeds from the
transaction will be used to accelerate and support previously
identified strategic growth opportunities. These investments will
not occur all at once and in the meantime, proceeds will further
strengthen the Company's balance sheet.
The generation portfolio was refinanced and restructured in
April 2021 as part of a balance sheet simplification exercise. As
of the 30 June 2021, the portfolio was held on the balance sheet at
a net book value of GBP56.8m. In early 2020 Good Energy undertook a
formal revaluation exercise of these assets as their historic
carrying value was not fully reflective of their open market
value.
As a reminder, at the half year the group reported a gross cash
position of GBP9.0m (following the GBP11m repayment of Good Energy
Bond II). Headline net debt at the half year was GBP36.4m, of which
GBP39.1m was represented by the refinanced debt secured against the
generation portfolio.
The Company has appointed KPMG LLP as Financial Advisor
regarding the Disposal and anticipates completion of this process
during Q1 2022.
Zap - Map investment and international expansion
Zap-Map, the UK's leading EV mapping platform, currently has
more than 290,000 registered users, over 95% of the UK's public
points on its network and over 75% of UK EV drivers have downloaded
the platform.
The Company intends to participate in the current founding round
being undertaken by Zap-Map. The anticipated size of the funding
round is GBP7m. This will allow Zap-Map to embark on its next
course of commercial and development goals, which will crystallise
its leading position for its market services in the UK and initiate
steps of international expansion to selected territories.
This is expected to complete on a similar timescale to the
Disposal.
Decentralised energy services platform
Alongside the electrification of transport; helping users
generate, consume and share their power will be one of the key
platforms to delivering a truly decentralised energy network. We
have a strong platform to build from, as we are already one of the
leading players in decentralised energy with over 175,000
small-scale Feed-in Tariff generation customers.
The Company is currently building a new platform for its
decentralised energy service business, to enhance existing products
and propositions and deliver new services for feed in tariff
customers. This platform will enable smart export for solar
customers, and the ability to pay actual as opposed to deemed
rates, providing material benefits to the business and
customers.
We expect payback on the GBP1m investment to deliver this
platform within 12 months and will be rolled out during H1 2022 to
support growth in this segment.
We expect to make further investments across both transport and
decentralised energy to deliver our strategic plan.
Trading Outlook
The energy supply landscape has changed significantly in recent
months. By the spring of 2022 we expect a certain normalisation to
have occurred within the domestic market with significantly fewer
participants competing in a more balanced manner on product
attributes, differentiated service and price. We expect a degree of
industry restructure, with an increased level of regulatory
scrutiny particularly on capital adequacy, consumer protection and
operational and financial governance.
We welcome this direction, as we believe it benefits customers
and allows us to perform consistently in this domestic supply
market.
The market has continued to experience high wholesale energy
prices, which has led to 22 supply companies failing since the
start of September 2021, of which 13 have been announced since 13
October 2021. These market exits will have a short-term impact on
the business. We expect to incur unforecasted costs of up to GBP1m
through the Renewables Obligation ("RO") and Feed in Tariffs
("FIT") levy mutualisation processes and GBP1.5m of additional
commodity costs from a higher number of business and domestic
customers than expected.
However, given our exemption from the price cap, we have
flexibility to change tariff pricing further where necessary and we
will continue to monitor this closely as the winter continues.
Continued volatility in the energy industry will put short term
financial pressure on the business, however, there remains a route
to achieve Good Energy's full year expectations.
Nigel Pocklington, Chief Executive Officer of Good Energy,
said:
"I'm very pleased to announce the acceleration of our
strategy.
Good Energy has been at the forefront of the UK's energy
transition for over 20 years, stimulating the growth of renewable
power generation. Our job is done as a developer and asset owner as
we focus on the new frontiers - the electrification of transport
and decentralised energy generation.
Bigger investment in Zap-Map, will reinforce their market
position and help deliver the products and services for EV drivers.
We see significant opportunities to scale this business
internationally.
We are also increasing investment in a brand-new platform to
better serve our decentralised energy customers. With one of the
largest feed in tariff customer bases, we are investing in new
products and services to better serve their needs.
Whilst the retail energy market continues to experience some
short-term challenges, we remain positive about the future. We will
largely be a debt free company, with a strong balance sheet for
growth."
Enquiries
Good Energy Group PLC Email: press@goodenergy.co.uk
Nigel Pocklington, Chief Executive
Charlie Parry, Head of Investor Relations
& CoSec
Luke Bigwood, Head of Communications
SEC Newgate UK Email: GoodEnergy@secnewgate.co.uk
Elisabeth Cowell Tel: +44 (0)7900 248213
Emma Kane Tel: +44 (0)7876 338339
Investec Bank plc (Nominated Adviser
and Joint Broker)
Sara Hale / Jeremy Ellis Tel: +44 (0) 20 7597 5970
Canaccord Genuity Limited (Joint Tel: +44 (0) 20 7523 4617
Broker)
Henry Fitzgerald - O'Connor
About Good Energy www.goodenergy.co.uk
Good Energy is a generator and supplier of 100% renewable power
and an innovator in energy services. It currently owns two wind
farms, six solar farms and sources electricity from a community of
1,600 independent UK generators.
Since it was founded 20 years ago, the company has been at the
forefront of the charge towards a cleaner, distributed energy
system. Its mission is to support UK households and businesses
generate, store and share clean power.
Good Energy is recognised as a leader in this market, through
our green kite accreditation with the London Stock Exchange and as
the only energy supplier with Gold Standard Uswitch Green Tariff
Accreditation for all tariffs.
About Zap-Map www.zap-map.com/live/
Launched in June 2014, with a mission to accelerate the shift to
electric vehicles (EV) and help the drive towards zero carbon
mobility, Zap-Map is the UK's leading EV mapping service. The
charging point map, available on desktop and iOS/Android apps,
helps EV drivers to search for available charge points, plan longer
journeys, pay for charging on participating networks and share
updates with other drivers.
Zap-Map currently has more than 290,000 registered users, and
over 95% of the UK's public points on its network. Over 75% of UK
EV drivers have downloaded Zap-Map, with growth in Zap-Map
downloads more than keeping pace with the rapid growth in the EV
market.
For more information, please visit www.zap-map.com.
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