TIDMGOOD
RNS Number : 9259Z
Good Energy Group PLC
20 September 2022
Good Energy Group PLC ("Good Energy" or "the Company")
Un-audited interim results for the 6 months ended 30 June
2022
Resilient financial performance and investing in growth
strategy
Good Energy, the 100% renewable electricity supplier and
innovative energy services provider, today announces its interim
results for the six months ended 30 June 2022.
Highlights
-- A resilient financial performance, despite ongoing and
significant pressures from commodity markets
-- The Company remains substantially debt free with a strong
cash and cash equivalents position of GBP22.2m at the end of August
2022.
-- Supply business well hedged for winter 2022 having
incrementally hedged throughout the year, a strategy that will
continue into 2023.
-- Continued investment in strategic vision including new
generation product development, innovative business supply products
and further investment into Zap-Map through a successful GBP9m
series A fundraise with Fleetcor, valuing Zap - Map at GBP26.3m on
a post money equity value.
-- As previously announced, the Company has shifted its capital
allocation towards growth and investment, whilst maintaining a
strong balance sheet as a buffer to the ongoing volatile wholesale
energy markets. An interim dividend of 0.75p has been declared for
the period.
Financial performance for the six months to 30 June 2022
Period ended H1 2022 HY 2022 H1 2022 H1 2021
GBPm* Underlying Non underlying Reported Reported
continued
operations
Revenue GBP107.6m GBP107.6m GBP68.4m
------------ ---------------- ----------- -----------
Gross Profit GBP12.2m GBP12.2m GBP17.7m
------------ ---------------- ----------- -----------
Administration costs GBP(12.7)m GBP(12.7)m GBP(11.8)m
------------ ---------------- ----------- -----------
Operating profit GBP(0.5)m GBP(0.6)m GBP5.9m
------------ ---------------- ----------- -----------
Net finance costs GBP(0.2)m GBP(0.2)m GBP( 1.2
)m
------------ ---------------- ----------- -----------
Profit before tax GBP(0.7)m GBP(0.7)m GBP4.8m
------------ ---------------- ----------- -----------
Taxation GBP1.0m GBP1.0m GBP(1.6)m
------------ ---------------- ----------- -----------
Profit from continuing GBP0.3m GBP0.3m GBP3.2m
operations
------------ ---------------- ----------- -----------
Profit from discontinued GBP0.0m GBP0.0m
operations, before
tax
------------ ---------------- ----------- -----------
Tax on discontinued GBP0.4m GBP0.4m
operations
------------ ---------------- ----------- -----------
Profit for the GBP0.8m GBP0.8m
period
------------ ---------------- ----------- -----------
Cash and cash equivalents GBP21.7m GBP21.7m GBP9.0m
------------ ---------------- ----------- -----------
Basic (loss) / earnings
per share (p) 7.4p 7.4p 20.5p
------------ ---------------- ----------- -----------
Half Year dividend
per share (p) 0.75p 0.75p 0.75p
------------ ---------------- ----------- -----------
Financial highlights - continuing operations
-- Revenue increased 57.4% to GBP107.6m (HY 21: GBP68.4m) driven
by significant price rises throughout the year in response to
rising wholesale costs. As price rises lag commodity price
increases, this is expected to be a phasing impact in the medium
term.
-- Gross profit decreased by 31.1% to GBP12.2m (HY 2021:
GBP17.7m) with a gross profit margin of 11.4% (HY 2021: 25.9%) . H1
2021 benefited from commodity procurement during COVID.
-- Underlying loss before tax of GBP0.7m (HY 2021: profit
GBP4.8m) includes a loss of GBP0.8m in relation to Zap-Map's
financial performance. Following the recent funding round, Zap-Map
will be deconsolidated from full year PBT figures, H1 2022 included
a loss of GBP0.8m for Zap-Map.
-- Reported profit after tax for the period of GBP0.8m (HY 2021: GBP3.2m),
-- Reported earnings per share of 7.4p (HY 2021: 20.5p).
-- Sale of generation assets completed in January 2022 for total
consideration of GBP21.2m. The company is now debt free on a net
basis.
-- Sale proceeds continue to provide a balance of growth capital
and buffer against continued volatile wholesale energy prices. Cash
and cash equivalents at the end of August 2022 was GBP22.2m.
Operational highlights
-- Good Energy has delivered a resilient performance in the
first half of 2022 with continued investment across the business
supporting the journey to a zero-carbon Britain.
o Smart meter rollout progressing well, with over 36,800 and 43%
of customer smart meters installed to date, with over 10,000
installed in 2022. We remain on target to install over 13,000 this
year, increasing the total to 40,000 and 47% of our customer base
by the end of 2022.
o New product launched for businesses, matching their supply
demands directly with generators. This reduces our exposure to
wholesale markets and allows our customers to know the exact
provenance of the renewable energy.
o Two market leading billing platforms integrated. Kraken and
Ensek offering an enhanced digital service for customers.
Delivering an 'Excellent' 4.6* rating on Trust Pilot.
o Resilient business practices offering stability in the face of
wholesale market pressures.
-- Zap-Map successfully completed a GBP9m Series A fundraising,
valuing Zap-Map at GBP26.3m post money equity value, including
investment from Fleetcor and Good Energy.
o The funds raised are expected to fuel the expansion of
Zap-Map's development team to deliver its product roadmap and could
pave the way for Zap-Map's international expansion.
o Zap-Map registered users increased 105% to 455,000, reflecting
continued strong growth in electric vehicle uptake. Mapping data
includes 95% of the UK's public charging points on its network.
Over 75% of the UK's EV drivers have downloaded Zap-Map.
o Zap-Pay rollout continuing at pace, with nine charge point
operators and 25% of the rapid charging market signed to date.
o Subscription service launched in June 2021. Good levels of
customer conversion experienced particularly from new EV drivers,
particularly for annual subscriptions.
o Fleet service EV fuel card with Fleetcor UK (Allstar Business
solutions) launched in March 2022.
o Good Energy made an initial GBP1.08m investment in Zap - Map
in 2019 for a 50.1% equity stake. Subsequent investment of GBP1m
via a convertible loan was made in 2021, followed by a further
GBP3.7m in the recent Series A round. Total investment made by Good
Energy to date of GBP5.7m. Good Energy now hold a 49% stake in Zap
- Map. Following the GBP9m series A investment, including GBP5.3m
from Fleetcor, Zap - Map is now valued at GBP26.3m on a post money
equity value.
-- Customer numbers increased marginally in 2022, with a focus
on collections and long-term relationships.
o Overall Good Energy customer numbers increased by 0.8% to
276.9 k.
o Domestic customers increased 2.6% to 86.6k.
o Business customers decreased 10.0% to 9.8k
o Feed in tariff (FiT) customers increased 0.7% to 180.5k
o Zap-Map total registered users increased 105% to 455,000 (June
21: 221k users).
Outlook Highlights
-- Robust platform for future growth and resilience.
Substantially debt free with a strong cash and cash equivalents
position of GBP22.2m as at the end of August 2022. Enables
continued investment across the business and provides sufficient
working capital to support our continued resilience to
industry-wide headwinds.
-- We expect the introduction of the Energy Bill Support Scheme
to minimise the impact of the rising forward prices over the medium
term for customers.
-- Innovative new payments product for generators remains on
track to launch in Q4 2022. A key step for generators combatting
the ongoing energy crisis.
-- Whilst there will inevitably be pain for customers, we are
well positioned to help those customers wishing to go green and
have the services to generate, consume, share and store fully
renewable power.
-- The Company will invest across energy services through a clear buy and build strategy.
-- We see returns being driven primarily from a combination of
organic growth and acquisitions. M&A will be targeted primarily
on accelerating our capability in decentralised energy services and
we look forward to updating the market on this as we are in a
position to execute.
Nigel Pocklington, Chief Executive Officer of Good Energy,
said:
"The global energy crisis is escalating further. Russia's
stranglehold on gas supplies to Europe has been magnified by
further shortages and uncertainty, driving energy prices in the UK
to fresh highs. We have been vocal in stating that the only
solution in the short term is Government support and demand
reduction, with an accelerated roll out of renewables in the medium
to longer term. We are now pleased to see the Government take
meaningful steps to help customers through winter and beyond.
"Over the past 12 months, the rising cost of energy, multiple
supplier failures and everyday consumers having to pick up the bill
only serves to highlight a greater need for renewables to play a
vital role in our long-term energy strategy. Not only will a shift
to cleaner, local electricity sources cut the UK's carbon, it will
cut the UK's ties to fossil fuel driven global markets. As a
trusted leader in local, decentralised clean power, Good Energy's
core purpose has never been more relevant.
"Despite the pressures of the wider market, I am pleased with
the resilient performance and continued delivery on our growth
strategy during the period. We remain a substantially debt free
business with a strong balance sheet, which is of benefit to all
our stakeholders, and have taken tangible steps to invest in our
future, in both new products for solar customers and supporting
Zap-Map's growth by powering electric vehicle drivers.
Demand for clean energy products like solar, storage and
electric vehicles is soaring as customers look to cut costs and
gain control of their energy. Our mission to help one million homes
and businesses cut carbon from their energy and transport use by
2025, and supporting the growth of renewable generation, has never
been more needed."
Enquiries
Good Energy Group PLC
Nigel Pocklington, Chief Executive
Charlie Parry, Director of Corporate Strategy
& Investor Relations
Ian McKee, Head of Communications Email: press@goodenergy.co.uk
SEC Newgate UK Email: GoodEnergy@secnewgate.co.uk
Elisabeth Cowell / Molly Gretton Tel: +44 (0)7900 248213
Investec Bank plc (Nominated Adviser
and Joint Broker)
Tel: +44 (0) 20 7597
Jeremy Ellis 5970
Canaccord Genuity Limited (Joint Broker) Tel: +44 (0) 20 7523
Henry Fitzgerald - O'Connor / Harry Rees 4617
About Good Energy www.goodenergy.co.uk
Good Energy is a supplier of 100% renewable power and an
innovator in energy services. It has long term power purchase
agreements with a community of 1,700 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 power a cleaner, greener world and make
it simple to generate, share, store, use and travel by clean power.
Its ambition is to support one million homes and businesses to cut
carbon from their energy and transport used by 2025.
Good Energy is recognised as a leader in this market, through
green kite accreditation with the London Stock Exchange, Which? Eco
Provider status and Gold Standard Uswitch Green Tariff
Accreditation for all tariffs.
About Zap-Map www.zap-map.com
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 420,000 registered users and
over 95% of the UK's public points on its network, with around 70%
being updated with live availability status data. More than 220,000
EV drivers use Zap-Map each month out of an EV parc of 520,000,000
(SMMT June 2022).
CEO review
Overview
Good Energy's mission to help combat the climate crisis is now
intertwined with combatting the energy crisis. I wrote in March
that in the second half of 2021 we had begun to see largely
unprecedented and structural changes to the UK energy landscape.
Throughout 2022 we have seen this trend continue, exacerbated by
Russia's attack on Ukraine. Since then, the energy crisis in the UK
and across Europe has deepened and brought energy to the forefront
of the national conversation. Energy security, energy independence,
inflation and the cost-of-living are driving headlines daily.
We are now experiencing one of the most exceptional financial
periods in post war history, with surging energy prices driving
near record levels of inflation. Coupled with global post pandemic
supply chain issues, it is creating the conditions to send us
towards the nadir of stagflation. Wholesale energy prices have
increased significantly and are now 120% higher than this time 12
months ago.
The need for strong Government support to avoid a deeper, longer
lasting impact of this cost-of-living crisis has never been more
important. It should not be down to the UK's consumers and
businesses to pay the cost of a war on energy. On 8 September the
government announced substantial further package of measures to
combat consumer energy prices alongside plans to do the same for
businesses. The Energy Price Guarantee is a unit rate discount that
supersedes the existing energy price cap, applicable to all
households from 1 October which will in addition to the GBP400
Energy Bill Support Scheme retain prices at a similar level to
current over the winter period.
These unprecedented times are likely to drive accelerated
systemic changes, both in macro support and energy policies and we
anticipate that these actions will accelerate an acceptance of
green technologies. We believe that now is the time to invest. Now
is the time to take bold action.
Navigating the energy crisis with resilience and investing for
growth
Despite rising wholesale prices, a raft of suppliers exiting the
market and significant operational changes, we have continued to
operate successfully. I remain proud of the way our business has
reacted to these unprecedented events. We are trading in line with
our expectations and the activities undertaken during the period
mean that we remain in good financial health, being substantially
debt free with a strong cash balance.
Throughout the crisis we have used our flexibility to set
appropriate prices and improved cash collection capabilities and
systems, leading to a significant year-on-year improvement in
collections to mitigate the impact on our business and our
management of working capital. We have implemented price rises
across domestic and business portfolios in line with increasing
costs and carefully managed debt and direct debit collection
rates.
Alongside our focus on operational performance, we have
continued to invest across our business, to deliver our strategic
vision of helping one million homes and businesses cut carbon. To
fund this strategy, we completed the transformational sale of our
generation portfolio in January, at a premium to book value, which
was a landmark moment for Good Energy. The total consideration of
GBP21.4m is being used to accelerate and support further
investments across both transport and decentralised energy to
deliver Good Energy's strategic plan, as well as to provide
sufficient working capital to support our continued resilience to
industry-wide headwinds.
We have been developing a new platform for our decentralised
energy service business which will be the key to unlocking a more
digital services led offering. We believe this new product will be
a market leading, innovative solution for solar customers. As the
only UK energy supplier with more customers exporting their energy
through us (via the Feed-in Tariff) than importing it, we are
uniquely positioned in this growing market. It will enable Good
Energy to pay actual as opposed to deemed rates for exported
electricity, providing material benefits to customers. It also acts
as a new source of power to match with our supply customers. This
is a first in the market which is not currently possible under the
Feed-in Tariff.
We also participated in Zap-Map's Series A funding round, in
line with our strategy to accelerate the transition to electric
vehicles and to provide investors with exposure to this exciting
growth market.
Navigating the crisis and making progress on our strategy has
only been possible with the support of Good Energy's dedicated and
professional team, and the patience of our customers, many of whom
have been with the business for several years. I remain acutely
aware of the impact of high energy costs on society and for our
customers. The longer term needs these events have exposed - for a
resilient, renewable and secure energy strategy for the UK, is of
course, at the very heart of our mission as a company.
Purpose and strategic vision
Earlier this year we launched our bold vision for the coming
years. Our ambition is to support one million homes and businesses
cut carbon from their energy and transport use by 2025.
Our mission remains as it always has. To power a cleaner,
greener world, by making it simple to generate, share, store, use
and travel by clean power.
In order to deliver this bold vision, we will be laser focused
on our target markets and service offerings.
Renewable supply business
-- Fairly priced, transparent, 100% renewable electricity.
Decentralised energy
-- Services to help homes and businesses generate, store, consume and share their own power.
Mobility
-- Make it easier to own, drive, fuel and pay for an electric vehicle.
Throughout 2022 we have continued to make good progress on
delivering this vision, despite the backdrop of the energy
crisis.
Renewable Supply
Our focus is to provide fair priced, transparent, genuine 100%
renewable electricity. We are clear that we are not everything for
everybody. We offer a premium product and are a trusted provider to
help customers choose the right services and feel like they are
making an impact on climate change by going green and saving money
in the process.
We see this market as one of potential steady and incremental
growth over the coming years. It remains the foundation of a green
energy services business.
Our 2022 goals for this part of our business are very much
focused on stability:
-- retention of our customer base
-- launching new products for our business customers
-- continued improvement of our overall customer service
As a result of the ongoing volatility in the wholesale markets,
very little switching has taken place across the domestic market.
Suppliers have taken lower cost tariffs off the market while
commentators and the regulator have continued to urge caution. Our
focus in the first half of the year, which we expect to continue
into early 2023, has been on operational stability and financial
prudence.
Electricity increased 472% and gas increased 752% year on year
(March 2022 vs March 2021). This has continued to rise throughout
the year.
As a result, in February 2022 we saw the price cap increase by a
significant 54% to GBP1,971. In August, it was announced this would
rise a further 80% to GBP3,549, a staggering 177% rise on 12 months
ago. With further rises planned for the updated price cap in
January 2023, the Government has announced plans to take
substantial action, applying a universal discount rate to all
domestic tariffs to keep the prices customers will pay at a similar
level to pre-October.
Although we are not immune from this energy crisis, which has
affected everyone from consumers to suppliers, regulators, and
government, we have worked hard to insulate ourselves as much as
possible. Earlier in the year, we highlighted the impact of
incurring additional commodity costs from a higher number of
business and domestic customers than expected. We saw this continue
over the first months of the year.
Despite the highly volatile wholesale energy prices, we have
continued to mitigate against further risks where possible:
-- Our electricity purchasing model, which backs all supply with
power sourced via direct agreements with renewable generators,
brings additional complexity and provides support for renewables
above and beyond that offered by other suppliers. But for the same
reasons it is the basis for our exemption for the price cap and
creates price flexibility.
-- 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.
-- We expect prices to stabilise, albeit it at a significantly
higher level, throughout 2022 and 2023.
-- We are 90 per cent hedged for winter 2022 (based on seasonal
normal weather patterns), despite the continued market volatility.
Our energy trading capabilities remain a core strength. We have a
robust hedging policy implemented via dedicated trading function.
This has helped us navigate the energy crisis whilst many suppliers
have gone out of business.
-- We have a clear trading plan and have taken steps going into
Winter 2022 including risk of PPA under delivery built into
tariffs. We had a clear plan to incrementally purchase power for
winter 2022 and are now 90 per cent hedged heading into that
period. We are following a similar approach and plan to
incrementally increase hedging for Summer 2023.
-- Following a record low wind period in Winter 2021, we have
adjusted our trading mix to lower exposure to wind. Risk of under
delivery is now built into tariffs.
-- However, c hanging regulations continue to make access to
trading difficult across the industry
In the business supply market, the rising cost of energy has
also forced us to assess the most effective way to serve our
customers.
Historically Good Energy, and some other suppliers, have
purchased volume from smaller generators via power purchase
agreements (PPAs) while at the same time selling volume to
customers via supply contracts. The generator volume was either
added into the overall hedge position or sold back to the market.
The supply contracts volume would have been purchased from the
marketplace.
This year we have shifted our business proposition to net
generators with supply customers. This means when a generator
offers us an amount of power, we try and find a supply customer
that wants to buy that volume of power. This provides two
benefits:
-- It provides customers certainty about the provenance of their
renewable supply - they can pinpoint the site(s) where their volume
is coming from - whether that's a wind turbine in Suffolk, a solar
panel in Cornwall or an anaerobic digestion plant in Scotland.
-- It enables Good Energy to diversify where we source our
customer's power from, reducing our exposure to purchasing via the
marketplace and enabling us to optimise our trading credit lines
better.
So far we have matched over 24GWh across 48 of our larger
customers.
In summary, we have made good operational progress during the
period, which has positioned us well for future growth:
-- Green proposition enhanced through accreditations including
Which? Eco Provider and Uswitch Green Tariff Gold Standard.
-- Our leading customer platforms are delivering improving
customer service. All our domestic and business customers are now
on Kraken and Ensek. Delivering an 'Excellent' 4.6* rating on Trust
Pilot.
-- Our smart meter rollout remains on track with 10k installed
in 2022 and over 36k, or 43% of our customer base, installed to
date. These are key to unlocking energy services products.
-- We are also well placed for further trading optimisation and smart tariffs.
The longer-term impact on the UK and European energy markets
remains unknown, but a reduction on reliance on Russian gas
inevitable. This structural shift in the source of UK energy supply
provides a material opportunity to further accelerate our
development and deployment of renewable generation.
We are now clear that the days of low prices and aggressive
price competition in the energy retail market are unlikely to
return in the short or medium term. Whilst there will inevitably be
pain for customers, we are well positioned to help those customers
wishing to go green and have the services to generate, consume,
share and store fully renewable power. We see this market evolving
to be increasingly focused less on price competition, but more on
trust, purpose and high-quality products and services. We are well
aligned with this change in market focus and are well placed to
prosper.
Decentralised energy
This strategic focus provides services to allow people and
businesses to generate, store, consume and share their own
power.
We see this side of our business as a way of gaining market
share through innovation and renewed market growth. Home and
small-scale generation is growing rapidly as a result of the rising
price of energy, with triple the capacity of rooftop solar
installed in Q2 2022 compared to the same period in the previous
year and UK Google searches for 'solar panels' reaching an all-time
high in August 2022.
A key goal for 2022 has been to deliver a smart export product
for solar users. This has been progressing well and we expect to
launch a first-of-its-kind service in Q4 2022.
This service will reward customers for making the grid greener
and is a step towards a more decentralised energy grid. Customers
will get paid for what they export, which is an evolution from the
current deemed export payment, which is capped at 50% of all
generation. This is ideal for homes which generate more than
they're able to use, or who can shift load effectively.
As the second largest feed in tariff (FIT) provider, we believe
this product will help grow market share as generators look to earn
more for what they generate. It also rewards those customers with
smart enabled services who can shift load and export at appropriate
times, and we earn revenue on each MWh our customers export. It has
significant potential to unlock new services and recurring revenue
streams to power growth for the future.
We are also focused on securing partnerships and potential
acquisitions for solar, storage and clean electrified heating
installations, and look forward to updating the market on
developments in this area.
Mobility
Our ambition is to make it easier to own, drive, charge and pay
for an electric vehicle. We have solutions for all areas an
electric vehicle driver needs. We will continue to focus on
investing in software and services and look to partner for asset
and hardware solutions.
We see this area undergoing rapid growth in the coming years and
will be building services for all electric vehicle drivers. Our
investment in Zap-Map allows us to have a material impact in this
space as they build out a market leading offering.
Zap-Map
Zap-Map delivered a strong 2021 performance and built on that
throughout 2022. The Zap-Map team is now focused on scaling up to
capitalise on this market leading position.
Zap-Map's product vision is to be the go-to app for electric
vehicle drivers, offering the simplest way to find and pay for
charging, in the UK and abroad.
Growth will come from being the best place to find bundled
charging and aiming to lead the market on payments. Over the medium
term, expansion will come from building an as a service business
model, enhancing the fleet proposition, expanding data insights
further and going international.
Post-period end, in August, we announced the successful
completion of a series A fundraise, with Zap-Map raising GBP9m from
Fleetcor and Good Energy at a post money equity value of GBP26.3m.
Our contribution of GBP3.7m was enabled by the proceeds raised from
the sale of our generation assets and is in line with our strategy
to build a platform which makes it simple for people to travel with
clean power. Zap-Map has a strong role in our three-pronged
strategy across clean energy supply, energy services and
transport.
Zap-Map is focused on leading the market in terms of EV charging
payments and therefore, the involvement of Fleetcor is highly
exciting and a strong endorsement of Zap-Map. Fleetcor processes
billions of electronic transactions a year, recording annual
revenue of $2.8 billion in 2021.
Its strategic investment builds on an existing partnership which
sees Fleetcor's Allstar Business Solutions integrated into
Zap-Map's Zap-Pay product, which is designed to make EV charging
payment simple. Zap-Pay continues to expand quickly, experiencing
good levels of customer conversion, particularly from new EV
drivers, and is already integrated with nine charging networks,
covering 25% of the UK rapid networks.
A significant proportion of the funds raised will be used for
the product development but the involvement of Fleetcor will also
be beneficial to Zap-Map as it progresses its international
expansion strategy.
Zap-Map is well positioned to benefit from future growth in EV
ownership. The electric vehicle (EV) market continues to experience
a seismic shift with growing demand. EVs are expected to grow from
10% of new car sales in 2020 to 100% by 2030. This would represent
over 27% of all UK cars. Throughout this period, we expect a 92%
compound annual growth rate (CAGR), with 47% growth expected until
2026.
Zap-Map currently has over 450,000 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.
Growth in users has tracked the growth of the wider electric
vehicle market with user numbers up 105% vs June 2021.
Engagement is one of the key metrics for growth. Zap-Map has
historically had an early adopter, highly engaged user base. Over
50% of users are monthly active users, a leading indicator of
repeat usage. The breadth and depth of the data available to EV
drivers is what defines Zap-Map as the market leader in this
category.
Another pillar of its expansion strategy is subscriptions
services delivering recurring revenues to the group. Zap-Map has
already rolled out a subscription model to provide high usage
drivers with improved services and uptake of the annual
subscription has continued to rise. Alongside direct to registered
users conversion, we see bundling as an effective route to
market.
In September 2021, Good Energy and Zap-Map launched the first
electric vehicle driver tariff with Zap-Map subscriptions bundled
in. Bundled services will be a key part of our growth strategy
going forward and we will continue to seek out partnerships with
car manufacturers and parking operators providing another revenue
growth channel. Our ambition is to leverage our relationship with
Zap-Map to drive additional value add services for customers and
maintain longer lasting relationships.
Capital allocation and outlook
We continue to invest for sustainable growth and our capital
allocation policy will reflect this. We are maintaining our
dividend while also delivering on our growth strategy.
We see returns being driven primarily from a combination of
organic growth and acquisitions. M&A will be targeted primarily
on accelerating our capability in decentralised energy services and
we look forward to updating the market on this as we are in a
position to execute.
Naturally, we will also be focused on ensuring stability in
existing business, driving sustainable growth to withstand external
shocks. While growth is expected through our new decentralised
energy services platform, due to go live in Q4 2022, we are well
prepared for ongoing volatility, being 90 per cent hedged for
seasonal normal weather conditions for winter 2022 and our trading
mix has been adjusted to lower our exposure to wind. Also, while
changing regulations continue to make access to trading difficult
across the industry, we have a clear trading plan and have already
taken steps going into Winter 2022.
I am pleased with our resilient financial performance in the
period and would like to thank the team for their hard work in
managing unprecedented challenges while also laying strong
foundations for growth. I would also like to thank our customers,
who continue to support both our business and the rise of renewable
generation in the UK during this challenging period.
OPERATING REVIEW
Wholesale energy market conditions
Power prices
The development of power prices in the last 18 months has been
significant, starting with COVID impacts and subsequent recovery
before geopolitical matters drove a dramatic, rapid and fluctuating
upward trend in wholesale power and gas costs. Day ahead gas prices
started the year at GBP1.53/therm, peaked at GBP6.44/therm on
August 26(th) , and had dropped to GBP3.94/therm by September 7(th)
.
Weather conditions in H1 2022 and through to August have
reflected a warmer year than ever recorded before. The average
temperature for January to August for the UK in 2022 has been
10.5degC, making this year so far warmer than the previous record
of 10.2degC in 2014. This has impacted gas usage with H1 2022 being
17.8% lower than H1 2021.
Overall electricity supply volumes were up 20.6% reflecting
continued COVID recovery, increased business supply volumes and an
increase in domestic customer numbers.
Our renewable supply business
Cash collections
Significant rise in cash collections in Q1 driven by increased
tariffs (SVT's Price Cap and Commercial tariffs) and the recovery
from teething problems experienced in the implementation of our new
business billing platform (Ensek) which impacted collection during
Q2 and Q3 2021.
There is a continued focus on good quality business partners to
ensure future growth comes hand in hand with good collections
performance.
Cash collections continue to be a priority for the business,
with rising wholesale prices requiring tariff increases and
increased collections to continue to sustain the business.
Business
Total business supply customers fell by 10% to 10k. Whilst this
fall was seen evenly across SME and HH customers, business supply
volumes grew materially (30%) reflecting higher usage contracts.
(2022: 248 GWh, 2021: 191 GWh).
Domestic
In the domestic supply market, 29 suppliers have exited the
market since 2021. This reinforced our stance that a race to bottom
on price was not a viable long-term business model. We remain
committed to ensuring that we offer fair priced, transparent 100%
renewable electricity proposition. Elevated energy prices will
drive increasing awareness in the sector.
Feed in Tariff ("FIT")
FIT administration provides the foundation of our energy
services model. Despite the FIT scheme closing to new entrants in
March 2019, we continue to administer the scheme for domestic and
business customers. Customer numbers increased 0.7% to 180.5k
versus June 2021.
Generation performance
In January 2022 we announced the disposal of the renewable
generation asset portfolio (47.5MW) as part of an ongoing strategic
shift to energy and mobility services.
Smart metering
Following delays in 2020 and the first half 2021 due to COVID-19
restrictions, installations are now progressing well. By 7 January
2022, we had installed 22,00 meters delivering on our 2021 target.
Total installed meters to date are close to 37,000 meters.
CFO REVIEW
Overview
The Group has had a resilient financial performance despite
continued and significant pressure from commodity markets impacting
on the year's performance.
The first half of 2021 saw significant benefits from power and
gas hedged during 2020. The second half of 2021 saw rapidly
escalating wholesale prices combined with significant periods of
low wind, which combined to hit margins materially. This escalation
of prices has continued throughout the first half of 2022 and
whilst tariffs have been increasing, wholesale prices has risen
quicker putting pressure on margins in the short term.
In September 2022, the UK government announced a significant
extension of its energy market support packages. This support will
cap domestic bills, offer business users significant support, and
will add additional collateral into the wholesale commodity market.
All the interventions are designed to support consumers through an
exceedingly difficult period.
Financial performance
Profit and loss
Revenue increased 57% in the period to GBP107.6m (202: GBP68.3m)
driven by increased tariffs.
Cost of sales increased by 88% to GBP95.4m (20201 GBP50.6m)
driven by geopolitical impacts on wholesale costs.
Gross profit decreased 31% to GBP12.2m (2021: GBP17.7m). Gross
margin decreased to 11.3% (2021: 25.9%). The decline in margins
reflects that Pricing whilst rising could not keep pace through H1
(price cap) although this is primarily a phasing impact over the
medium term.
Total administration costs increased 8% to GBP12.7m. This
increase primarily relates to the booking of expected credit loss
(ECL) provisions at 2021 year end rates.
Net finance costs decreased by 79% to GBP0.2m driven by a
combination of significant debt reduction and sale of the
generation asset portfolio.
Loss before tax of GBP0.7m includes a breakeven performance for
the traditional good energy business and a loss of GBP0.7m in the
ZAPMAP business.
Reported tax credit at H1 2022 include the impact one-off
benefits related to Generation business sale.
The profit for the period was GBP0.8m (2020: GBP3.2m). This
reflects the extraordinary market conditions seen since H2 2021 and
continuing to this day.
Financial bridge 2021 to 2022*
2022 saw the impact of some higher volume business contracts
secured in 2021 and a small growth in domestic customer numbers.
This generated a GBP0.8m positive volume impact compared to H1
2021
The current geopolitical energy crisis - affecting everyone from
consumers to suppliers, regulators and government - means we are
experiencing ongoing global uncertainty and have not been immune
from the impacts from the wholesale market. In H1 2022 our recorded
wholesale prices increased 87% whilst supply revenue increased 60%.
On the commodity costs side this also reflects that H1 2021
benefited from commodity procurement during COVID, whilst H2 2022
saw the impacts of the rapidly rising commodity costs. Due to the
price cap calculation mechanics, prices whilst rising through the
same period, couldn't keep pace. Although this is primarily a
phasing impact over the medium term. The net negative financial
impact of all this is GBP5.6m.
ECL provisioning for H1 2022 has been done at revised rates but
using the same methodology as 2021 year-end. Compared to the H1
2021 we see a negative PBT impact of GBP1.6m
Substantially offsetting this ECL change are the reducing costs
of interest and financing within the business that have resulted
from the sales of the generation portfolio and the reduction in
bond debt within the business.
Finally, there are some smaller PBT movements with a GBP0.3m
increase in Zap-Map losses being offset by GBP0.2m of small other
PBT changes within the group.
*A profit bridge slide has been included in the Investor
presentation, which is available on the Company's website.
(https://group.goodenergy.co.uk/home/default.aspx)
Cash flow and cash generation
Our business model remains cash generative and once wholesale
prices stabilise we expect to see a working capital improvement
within the business as tariffs catchup to wholesale positions.
The increased tariffs alongside the recovery from 2021 business
billing migration issues has seen a significant improvement in
collections year on year. Collections in Q1 were up 57% and in Q2
were up 91% versus the same periods in 2021.
There was a net increase in cash of GBP15.0m, which includes the
proceeds from the sale of the Generation assets (GBP21.2m - gross
of fees) alongside the further strategic investment in Zap-Map of
GBP3.7m.
Cash and cash equivalents at the end of August 2022 were
GBP22.2m.
Funding and debt
Our business is substantially debt free on a net basis. In the
period, gross debts have reduced by 86.6% compared with June
2021.
Substantial progress has been made against reducing Group
finance costs and reducing the gearing ratio. The remaining Good
Energy Bonds II outstanding (GBP4.7m) is reported within current
liabilities. This is due to an annual redemption request window for
bondholders in December of each year and a one-off redemption
window that closed in August with payment of GBP0.3m due in
December 2022.
The Group continues to maintain capital flexibility, balancing
operating requirements, investments for growth and payment of
dividends. Our business remains mindful of the need to capitalise
on strategic business development and investment opportunities.
Prudent balance sheet management remains a key priority.
Earnings
Reported basic earnings per share decreased to 7.4 (2021:
20.5p).
Dividend
Following stable operational performance in 2022, the sale of
the generation portfolio and reflecting our confidence in the
ongoing business, the Board recommend an interim dividend for 2022
of 0.75p per ordinary share.
Good Energy continues to operate a scrip dividend scheme and the
payment timetable of the interim dividend will be announced in due
course.
Expected Credit Loss (ECL)
Versus H1 2021 ECL provision has increased by GBP1.6m taking the
overall provision to GBP11.2m (2021: GBP9.6m).
The main impact is updating H1 2022 to the methodology applied
in FY 2021. Revenues have substantially increased but this has been
substantially offset by improved commercial collection rates.
Zap-Map investment
2022 H1 saw a P&L loss related to Zap-Map of GBP(0.7m) which
increased GBP0.3m from 2021, following a period of continued
investment. This was expected and related to Zap-Map's growth plan.
At an earnings level the group retains a GBP0.4m loss reflecting
Good Energy's 50.1% stake in Zap-Map.
Generation portfolio sale
On 25 November 2021, the Company appointed KPMG LLP to lead a
sale process for the Company's entire 47.5MW generation
portfolio.
On 20 January 2022 the Company announced, that following a
competitive process, the disposal of the 47.5MW generation
portfolio was complete with Bluefield Solar Income Fund ("BSIF").
Total consideration of GBP21.2m was received for the sale.
We are committed to delivering value to stakeholders and the
sale of our generation portfolio, at a significant premium to book
value, was a good deal. It is also a significant moment for Good
Energy - we are using the capital from our past to invest in our
future.
Events after the balance sheet
Zap - Map Series A investment.
https://www.londonstockexchange.com/news-article/GOOD/zap-map-raises-ps9m/15574433
Consolidated Statement of profit or loss (Un-audited)
For the 6 months ended 30 June 2022
Notes Unaudited Unaudited Audited
6 months 6 months 12 months
to 30/06/2022 to 30/06/2021 to 31/12/2021
GBP000's GBP000's GBP000's
REVENUE 107,600 68,374 146,045
Cost of Sales (95,379) (50,646) (119,019)
----------------- ------------------ -----------------
GROSS PROFIT 12,221 17,728 27,026
Administrative Expenses (12,725) (11,789) (24,622)
----------------- ------------------ -----------------
OPERATING PROFIT (504) 5,939 2,404
Finance Income 6 1 1,447 14
Finance Costs 6 (247) (2,627) (584)
Share of loss of - - -
associate
----------------- ------------------ -----------------
PROFIT BEFORE TAX (750) 4,759 1,834
Taxation 1,044 (1,609) (187)
----------------- ------------------ -----------------
PROFIT FOR THE PERIOD 294 3,150 1,647
Profit from discontinued
operations before
tax 82 - (6,752)
Tax on discontinued
operations 440 - 1,206
----------------- ------------------ -----------------
PROFIT/(LOSS) FOR
THE PERIOD 816 3150 (3,899)
Attributable to:
Equity holders of
the parent 1,217 3,362 (3,389)
Non-controlling
interest (401) (212) (510)
Earnings per
share - Basic 9 7.4p 20.5p -20.7p
- Diluted 9 7.4p 20.0p -20.7p
Earnings per
share (continuing
operations) - Basic 9 4.2p 20.5p 13.2p
- Diluted 9 4.2p 20.0p 13.0p
Consolidated Statement of profit or loss (Un-audited)
For the 6 months ended 30 June 2022
Unaudited Unaudited Audited
6 months 6 months 12 months
to 30/06/2022 to 30/06/2021 to 31/12/2021
GBP000's GBP000's GBP000's
Profit/(Loss) for the
period 816 3,150 (3,899)
Other comprehensive income
Other comprehensive
income that will not
be reclassified to profit
or loss in subsequent
periods (net of tax):
Deferred tax charge on - (924) -
rate change
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD
ATTRIBUTABLE TO OWNERS
OF THE PARENT COMPANY 816 2,226 (3,899)
Attributable to:
Equity holders of the
parent 1,217 2,438 (3,899)
Non-controlling interest (401) (212) -
Consolidated Statement of Financial Position (Un-audited)
As at 30 June 2022
Notes Un-audited Un-audited Audited
30/06/2022 30/06/2021 31/12/2021
GBP000's GBP000's GBP000's
ASSETS
Non-current assets
Property, plant and equipment 171 56,848 209
Right-of-use assets 850 6,279 851
Intangible assets 4,233 4,392 3,891
Deferred tax asset 1,280 - 173
Restricted deposit assets - 866 -
Total non-current assets 6,534 68,385 5,124
Current assets
Inventories 17,893 19,914 7,682
Trade and other receivables 7 38,262 30,413 35,928
Current Tax receivable - - -
Restricted deposit assets 2,816 476 2,414
Cash and cash equivalents 21,690 9,035 6,699
Total current assets 80,661 59,838 52,723
------ ------------ ------------ ------------
Held for sale assets - - 64,798
------ ------------ ------------ ------------
TOTAL ASSETS 87,195 128,223 122,645
------ ------------ ------------ ------------
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 842 833 840
Share premium account 12,790 12,790 12,790
EBT shares (444) (502) (444)
Revaluation surplus - 11,003 11,693
Retained earnings 17,281 10,541 4,774
------ ------------ ------------ ------------
Total equity attributable
to members of the parent company 30,469 34,665 29,653
Non-controlling Interest (726) (27) (325)
------ ------------ ------------ ------------
Total equity 29,743 34,638 29,328
Non-current liabilities
Deferred taxation - 6,077 -
Borrowings 8 276 39,855 5,066
Provision for liabilities - 1,316 -
Long term financial liabilities - 13 -
Total non-current liabilities 276 47,261 5,066
Current liabilities
Borrowings 8 5,436 6,874 2,118
Trade and other payables 51,683 39,450 40,910
Current tax payable 59 - -
Short term financial liabilities - - -
Total current liabilities 57,176 46,324 43,029
------ ------------ ------------ ------------
Liabilities associated with
HFS asset - - 45,223
------ ------------ ------------ ------------
Total liabilities 57,452 93,585 93,318
------ ------------ ------------ ------------
TOTAL EQUITY AND LIABILITIES 87,195 128,223 122,645
------ ------------ ------------ ------------
Consolidated Statement of Changes in Equity (Un-audited)
For the 6 months ended 30 June 2022
Share Share Other Retained Revaluation Non-controlling Total
Capital Premium Reserves Earnings surplus interest
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
--------- --------- ---------- ---------- ------------ ---------------- ---------
At 1 January 2021 833 12,790 (502) 6,854 12,472 185 32,632
--------- --------- ---------- ---------- ------------ ---------------- ---------
Loss for the year - - - 3,362 - (212) 3,150
Other comprehensive income
for the year - - - - (924) - (924)
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total comprehensive income
for the year - - - 3,362 (924) (212) 2,226
Transfer of revaluation
to retained earnings - - - 545 (545) - -
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total contributions by and
distributions to owners
of the parent, recognised
directly in equity - - - 545 (545) - -
At 1 July 2021 833 12,790 (502) 10,761 11,003 (27) 34,858
--------- --------- ---------- ---------- ------------ ---------------- ---------
Profit / (Loss) for the
period - - - (6,751) - (298) 7,049
Other comprehensive income
for the period - - - 677 - - 677
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total comprehensive income
for the period - - - (6,074) - (298) 6,372
Share based payments - - - - - - -
Exercise of options 7 - 58 (40) - - 25
Dividend paid - - - (108) (108)
Acquisition of Subsidiary - - - - - - -
Transfer of revaluation
to retained earnings - - - 234 690 - 924
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total contributions by and
distributions to owners
of the parent, recognised
directly in equity 7 - 58 86 690 - 841
--------- --------- ---------- ---------- ------------ ---------------- ---------
At 31 December 2021 840 12,790 (444) 4,773 11,693 (325) 29,327
--------- --------- ---------- ---------- ------------ ---------------- ---------
At 1 January 2022 840 12,790 (444) 4,773 11,693 (325) 29,327
--------- --------- ---------- ---------- ------------ ---------------- ---------
Profit/(Loss) for the
period - - - 816 - (401) 415
Other comprehensive income - - - - - - -
for the period
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total comprehensive income
for the period 816 - (401) 415
Transfer of revaluation
to retained earnings - - - 11,693 (11,693) - -
Total contributions by and
distributions to owners
of the parent, recognised
directly in equity - - - 11,693 (11,693) - -
--------- --------- ---------- ---------- ------------ ---------------- ---------
At 30 June 2022 840 12,790 (444) 17,281 - (726) 29,743
Consolidated Statement of Cash Flows (Un-audited)
For the 6 months ended 30 June 2022
Notes Un-audited Un-audited Audited
30/06/2022 30/06/2021 31/12/2021
GBP000's GBP000's GBP000's
Cash flows from operating
activities
Cash inflow from continuing
operations (2,173) 351 3,901
Finance income (1) 9 620
Finance cost (348) (2,139) (2,902)
Net cash flows from operating
activities 10 (2,522) (1,779) 1,619
Cash flows from investing
activities
Purchase of property, plant
and equipment - (11) (248)
Purchase of intangible fixed
assets (342) (198) (760)
Deposit into restricted accounts (401) 3,908 1,791
Proceeds from disposal of -
subsidiaries 19,575 -
Net cash flows used in investing
activities 18,832 3,699 963
Cash flows from financing
activities
Payments of dividends - - (108)
Proceeds from borrowings - 7,026 6,786
Repayment of borrowings (1,000) (17,917) (18,076)
Capital repayment of leases (321) (276) (616)
Proceeds from issue of shares - - -
Proceeds from sale of share
options 2 - 26
------------ ------------ ------------
Net cash flows from financing
activities (1,319) (11,167) (11,988)
Net increase/(decrease) in
cash and cash equivalents 14,991 (9,247) (9,406)
Cash and cash equivalents
at beginning of period 6,699 18,282 18,282
Cash and cash equivalents
at end of period 21,690 9,035 6,699
Cash and cash equivalents
for discontinued operations
at end of period - - 2,175
Notes to the Interim Accounts
For the 6 months ended 30 June 2022
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 Park Offices, Monkton Park, Chippenham, Wiltshire, United
Kingdom, SN15 1GH.
The Interim Financial Statements were prepared by the Directors
and approved for issue on 20(th) September 2022. 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 2021 were approved by the
Board of Directors on 27 April 2022 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 United Kingdom. They should
be read in conjunction with the Annual Financial Statements for the
year ended 31 December 2021 which have been prepared in accordance
with IFRS as adopted by the European Union.
In accordance with IAS 34, the tax charge is estimated on the
weighted average annual income tax rate expected for the full
financial year. The accounting policies applied are consistent with
those of the Annual Financial Statements for the year ended 31
December 2021, as described in those Annual Financial
Statements.
The Interim Financial Statements have not been audited.
2. Going concern basis
The Group has had a resilient financial performance despite
significant pressure from commodity markets and low wind levels.
The Group has performed a going concern review, going out until
September 2023, considering both an internal base case, and various
externally provided scenarios. The scenarios were provided by Ofgem
in July 2022 as part of their review into the financial stability
of UK Energy suppliers. Having reviewed this forecast, and having
applied a reverse stress test, the possibly that financial headroom
could be exhausted is remote.
All modelling work was performed before the announcement of the
announcement of the Governments Energy Price Guarantee on Sept
8(th) , 2022. The impact of this announcement is only positive for
the company. It reduces collections and expected loss risk, by
providing direct funding from industry bodies to replace customer
contributions (for all domestic dual fuel customer tariffs above
GBP2,500 per annum - standard TDCV usage assumed). In addition, the
Government funding will be provided within 11 days after the week
of supplying power/gas to consumers which reduces working capital
extremes. The Government has also announced business customer will
receive an equivalent level of support although details are still
being confirmed, but any support will a positive for the business.
Finally, the Bank of England will also be supporting liquidity in
the wholesale power and gas trading markets with a GBP40bn facility
with the aim of a return to a more normal trading environment.
The Directors are confident in the ongoing stability of the
Group, and its ability to continue operation and meet commitments
as they fall due over the going concern period. 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 2021.
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 2021.
5.Segmental analysis
H1 2022 Electricity FIT Gas Total Electricity Energy Holding Total
Supply Administration Supply Supply Generation as a Company/
Companies (Discontinued service Consolidated
operations) Adjustments
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------ --------------- --------- ---------- -------------- -------- ------------- ---------
Revenue 88,510 2,849 15,638 106,997 - 603 - 107,600
Cost of sales (84,282) (325) (10,573) (95,180) - (155) (45) (95,380)
Gross
profit/(loss) 4,228 2,524 5,065 11,817 - 448 (45) 12,220
Gross margin 5% 89% 32% 11% - 74% 0% 11%
Admin costs (9,716) - (1,227) (1,779) (12,725)
---------- -------------- -------- ------------- ---------
Operating
profit/(loss) 2,098 - (779) (1,824) (505)
Net finance
costs (5) - (24) (216) (245)
Share of - - - - -
loss of
associate
---------- -------------- -------- ------------- ---------
Profit/(loss)
before tax 2,093 - (803) (2,040) (750)
H1 2021 Electricity FIT Gas Total Electricity Energy Holding Total
Supply Administration Supply Supply Generation as a Company/
Companies service Consolidated
Adjustments
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------ --------------- -------- ---------- ------------ -------- ------------- ---------
Revenue 50,412 2,582 13,780 66,774 3,864 268 (2,532) 68,374
Cost of sales (41,619) (306) (8,432) (50,357) (2,7839) (54) 2,504 (50,646)
Gross
profit/(loss) 8,793 2,276 5,348 16,417 1,125 214 (28) 17,728
Gross margin 17% 88% 39% 25% 29% 80% 1% 26%
Admin costs (9,665) (188) (700) (1,236) (11,789)
---------- ------------ -------- ------------- ---------
Operating
profit/(loss) 6,752 937 (486) (1,264) 5,939
Net finance
costs (34) (752) (2) (392) (1,180)
Share of - - - - -
loss of
associate
---------- ------------ -------- ------------- ---------
Profit/(loss)
before tax 6,718 185 (488) (1,656) 4,759
6. Finance income and expense
Unaudited Unaudited
As at 30/06/2022 As at 30/06/2021
Finance income GBP000s GBP000s
Bank and other interest receivable 2 -
FV gains & losses (1) (1) 1,447
Total 1 81
Unaudited Unaudited
As at 30/06/2022 As at 30/06/2021
Finance expense GBP000s GBP000s
On bank loans and overdrafts 123 1,298
On corporate bond 120 363
Other interest payable 6 1
Fees on repayment of borrowings(1) - 620
Interest on lease liabilities 1 194
Amortisation of debt issue costs - 151
------------------------------------ ------------------ ------------------
Total 250 2,627
(1) Included within Finance income and Finance expenses in the
prior year are amounts classified as non-underlying income and
expenses relating to the debt restructuring taken place during
2020. As a result of the debt restructuring a fair value gain of
GBP1,447,000 was recognised. However, a GBP620,000 fee was incurred
for the early settlement of the Delabole loan arrangement.
7. Trade Receivables
Unaudited Audited
As at 30/06/2022 As at 31/12/2021
GBP000s GBP000s
Gross trade receivables 49,110 47,686
Provision for impairment/non-payment
of trade receivables (11,184) (11,792)
------------------ ------------------
Net trade receivables 37,926 35,894
Other taxation 337 35
------------------ ------------------
Total 38,263 35,929
The movements on the provision for impairment and non-payment of
trade receivables is shown below:
Movement on the provision for impairment Unaudited Audited
and non-payment of trade receivables As at 30/06/2022 As at 31/12/2021
GBP000's GBP000's
Balance at 1 January 11,792 8,882
Increase in allowance for impairment/non-payment 586 3,134
Impairment/non-payment losses recognised (1,194) (224)
Balance at 31 December 11,184 11,792
Days past due
Unaudited Contract <30 30-60 61-90 >91
As at 30/06/2022 assets Current days days days days Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Expected credit loss
rate - 4.5% 9.7% 17.2% 26.1% 80.5%
Estimated total gross
carrying amount at
default - 30,260 4,198 2,377 1,640 10,633 49,110
Expected credit loss - 1,376 409 410 428 8,561 11,184
Days past due
Audited Contract Current <30 30-60 61-90 >91 Total
As at 31/12/2021 assets days days days days
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Expected credit loss
rate - 3.3% 7.9% 17.0% 31.2% 90.1%
Estimated total gross
carrying amount at
default - 30,070 4,294 1,488 804 11,030 47,686
Expected credit loss - 1,015 340 253 251 9,931 11,792
8. Borrowings
Unaudited Audited
As at 30/06/2022 As at 31/12/2021
Current: GBP000s GBP000s
Bank and other borrowings - 1,007
Bond 5,160 557
Lease liabilities 276 555
--------------------------- ------------------ ------------------
Total 5,436 2,119
Unaudited Audited
As at 30/06/2022 As at 31/12/2021
Non-current: GBP000s GBP000s
Bank and other borrowings - -
Bond - 4,749
Lease liabilities 275 317
--------------------------- ------------------ ------------------
Total 275 5,066
On the 30 June 2021, the Group partially repaid GBP11,450,000 of
the Good Energy Bonds II. This represented 70% of the un-redeemed
amount at the date of payment. On the same day the group also
repaid GBP400,000 in redemption requests. On 30 June 2022, the
Group repaid GBP200,000 in redemption requests. The outstanding
capital after these combined payments is GBP4,700,000. The bond is
classified as a current liability as the remaining value is
repayable within 12 months, subject to the request of individual
bondholders.
The fair values of borrowings have been calculated taking into
account the interest rate risk inherent in the bond. The fair value
estimates and carrying values of borrowings (excluding issue costs)
in place are:
Unaudited Unaudited Audited Audited
As at 30/06/2022 As at 30/06/2022 As at 31/12/2021 As at 31/12/2021
Fair value Carrying Fair value Carrying
GBP000s value GBP000s value
GBP000s GBP000s
Good Energy Generation
Assets No.1 Ltd - - 39,513 38,310
Corporate bond 5,104 4,735 5,189 4,902
9. Earnings per share
The calculation of basic earnings per share at 30 June 2022 was
based on a weighted average number of ordinary shares outstanding
for the six months to 30 June 2022 of 16,528,000 (for the six
months to 30 June 2021: 16,375,000 and for the full year 2021:
16,399,000 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 2022 was 258p (for the six months to 30 June
2021: 189p and for the full year 2021: 269p). The dilutive effect
of share-based incentives was 208,252 shares (for the six months to
30 June 2021: 440,432 shares and for the full year 2021:
145,752).
10. Net cash flows from operating activities
The operating cashflow for the six months to 30 June 2022 is an
outflow of GBP2.5m (for the six months to 30 June 2021: GBP1.8m
outflow and for the full year 2021: GBP1.6m inflow). The difference
in the cashflow between the half year 2022 and its comparative for
the same period is primarily due to timing of working capital
related items and a loss before tax in the current year compared
with a profit before tax in 2021.
11. Post balance sheet events
Zap Map fundraise
On 8 August 2022, Zap-Map successfully completed a GBP9m Series
A funding round with a GBP5.3m investment from Fleetcor UK
Acquisition Limited ("Fleetcor") and a GBP3.7m investment from Good
Energy. Following the transaction, Good Energy have a significant
minority 49.9% shareholding and Fleetcor have a shareholding of
19.9%. Zap Map has therefore been deconsolidated from the Good
Energy group from 8 August 2022, resulting in a non-adjusting post
balance sheet event. Good Energy originally invested GBP1.08m for a
50.1% stake in March 2019, with a further GBP1m strategic
investment via a convertible loan note in April 2021. The GBP1m
convertible loan note issued in April 2021 by Good Energy has now
converted into shares.
Government Energy Price Guarantee
On 8 September 2022, the UK government announced details of
domestic financial support available through the Energy Price
Guarantee. This has been factored into the going concern disclosure
in note 2 and is treated as a non-adjusting post balance sheet
event in relation to expected credit losses (ECL).
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END
IR FLFEEAIIALIF
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September 20, 2022 02:00 ET (06:00 GMT)
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