Good Energy Group PLC Trading Update (4148W)
22 December 2021 - 05:59PM
UK Regulatory
TIDMGOOD
RNS Number : 4148W
Good Energy Group PLC
22 December 2021
Good Energy Group PLC
("Good Energy" or "the Company")
Trading Update
Good Energy Group PLC (AIM: GOOD), the 100% renewable
electricity supplier and innovative energy services provider, today
provides a further trading outlook for the business ahead of the
year ending 31 December 2021.
Market update
The financial performance for November was in line with
expectations. Our first domestic standard variable tariff ("SVT")
rise became effective on 1 November 2021, which provided some
mitigation against another low wind month, with wind levels 18%
below seasonal norms.
During December, power and gas prices have increased sharply to
unprecedented levels, driven in part again by tension between
Russia and Ukraine, the gateway of European gas imports, together
with colder, calmer weather forecasts and a French nuclear plant
being taken offline.
Since our last trading update on 25 November 2021, a little over
three weeks ago:
- Power and gas prices on a Day Ahead basis for December
compared to November have been on average 36% and 35% more
expensive respectively at GBP256/Mwh and GBP2.71/therm
- Q1 2022 baseload power and gas prices at GBP489/Mwh and
GBP4.39/therm are 102% and 89% higher respectively
- The increases in nearer term power and gas prices are all now
feeding very strongly in 2022/2023 seasonal contracts
The industry has also experienced a further sustained period of
low wind since 16 December 2021, which is expected to continue
until Christmas. Current wind levels are approximately 33% of
seasonal norms and the impact of this shortfall has been material
across the industry.
These changed conditions are expected to adversely impact full
year profits by approximately a further GBP3m, since guidance given
in our last update to the market on 25 November 2021.
Trading outlook
In November, we highlighted the impact of incurring additional
commodity costs from a higher number of business and domestic
customers than expected. This is now expected to continue into the
first quarter of 2022, at sustained high commodity prices.
To absorb some of the higher input costs, we announced a second
domestic SVT price rise of 30% to be effective from 17 January
2022. We expect this to minimise the impact of the rising forward
prices over the medium term. We will continue to monitor the need
to increase prices further, given our exemption from the price
cap.
Colder and calmer weather conditions, coupled with higher
customer volumes and elevated market prices throughout the winter
will require additional working capital so we are actively engaged
with our financing partners to help ensure we can meet these short
term working capital requirements as appropriate.
Nigel Pocklington, Chief Executive Officer of Good Energy,
said:
"This is a national crisis. Wholesale gas and power prices have
increased to unprecedented levels over the last three weeks,
creating an extremely difficult operating environment for every
business in the industry.
"While we have a very strong track record in forecasting and
hedging, these unparalleled price hikes, together with the very low
levels of churn within our customer base, means that we require far
greater working capital to trade similar volumes at these
stratospheric price levels. No one in the industry is immune. We
urge the UK Government to support the industry at large in
navigating these short-term challenges to protect bill-payers and
those that serve them."
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
Investec Bank plc (Nominated Adviser Tel: +44 (0) 20 7597 5970
and Joint Broker)
Sara Hale / Jeremy Ellis
Tel: +44 (0) 20 7523 4617
Canaccord Genuity Limited (Joint
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.
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END
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