TIDMGOOD
RNS Number : 3813U
Good Energy Group PLC
28 March 2023
Good Energy Group PLC
("Good Energy" or "the Company")
Un-audited results for the 12 months ended 31 December 2022
Executing our strategy by transitioning our business to a green
energy services model
Good Energy, the 100% renewable electricity supplier and
innovative energy services provider, today announces its
preliminary results for the twelve months ended 31 December
2022.
Financial highlights
-- Revenue increased 70.3% to GBP248.7m (2021: GBP146.0m) driven
by rising wholesale costs which have led price rises throughout the
year.
-- Government support for customers mitigated impact of very
high commodity driven price points across the industry in Q4
2022.
-- 10.7% increase in gross profit to GBP29.9m (2021: GBP27.0m)
with a gross profit margin of 12.0% (2021: 18.5%). T he decline in
underlying margins reflects that pricing, whilst rising, could not
keep pace with rapidly increasing wholesale costs through H1 2022
(price cap).
-- Profit before tax of GBP8.5m (2021: GBP1.8m) including net
GBP4.9m recognised value on the Zap Map investment. Underlying PBT
in the period was GBP3.1m with EBITDA of GBP4.4m.
-- Following the recent funding round, Zap-Map has been
deconsolidated from full year PBT figures, FY 2022 included a loss
of GBP2.0m for Zap-Map and a revaluation uplift of GBP 6.9m.
-- Reported profit after tax for the period of GBP9.2m (2021: GBP1.6m).
-- Reported earnings per share of 59.7p (2021: -20.7p).
-- Cash and cash equivalents at the end of Dec 2022 were
GBP24.5m, with a further GBP8.4m in restricted deposit accounts.
Within restricted deposits, GBP4.5m relates to Government support
scheme monies received in late December for application to business
and domestic customer accounts in January
-- Following a good operational performance in 2022 and
reflecting our confidence in the ongoing business, the Board
recommend a final dividend for 2022 of 2.0p per ordinary share,
taking our full year dividend to 2.75p (2021: 2.55p)
Operational highlights
-- Successful execution on our strategy to transition to a
leading green energy services company:
o Sale of 47.5MW generation portfolio in January 2022 for
GBP21.2m to facilitate future investment and M&A.
o Acquisition of heat pump and solar installation business,
Igloo Works, in December 2022, creating a new high margin revenue
stream.
o Completed Zap-Map GBP9m series A fundraise with Fleetcor,
valuing Zap-Map at GBP26.3m post money equity value.
o 63% increase in Zap-Map registered users to 550,000,
reflecting continued strong growth in electric vehicle uptake.
-- Renewable Supply business goals for 2022 achieved:
o New product launched for businesses, matching their supply
demands directly with generators. This reduces our exposure to
wholesale markets and gives our customers comfort as to the
provenance of their renewable electricity.
o Achieved target to install 13,000 smart meters during 2022,
increasing total number of smart meters installed to date to over
40,000 (47% of our customer's meter points).
Post period end and outlook highlights
-- Ambition to be the UK's leading provider of green energy
services, with the ability to install green energy infrastructure
and provide the best tariffs for the energy produced by our
customers :
o Launched a new market leading smart export tariff for
households with solar panels in March 2023.
o First domestic rooftop solar installation completed, following
Igloo acquisition.
-- We assess that energy services represents a GBP5 - GBP10 billion market opportunity . ([i])
-- Strategy is focused on driving high margin, low capital intensity sales growth .
-- Further M&A is a core near term focus, following recent buy and build acquisitions .
-- Our community of green-minded domestic customers provide a
strong initial pipeline for acquired businesses and enquiries to
date following the Igloo acquisition have been highly
encouraging.
-- Complemented through organic growth from product
diversification including new generation product development and
our ongoing relationship with Zap-Map and electric vehicle drivers
.
-- Trading in 2023 has started in line with management
expectations. Energy services continues to make good early
progress. Wholesale power prices are softening but remain elevated
and we anticipate the end of Government support schemes this
month.
Nigel Pocklington, Chief Executive Officer of Good Energy,
said:
"2022 was an enormously challenging year in energy. The knock-on
effects of the Ukraine conflict saw energy prices surge, driving
increased costs which we were forced to pass on to supply customers
in the form of price rises. Therefore, the vast majority of Good
Energy's positive performance came from areas other than energy
supply.
"We have made significant strides in delivering on our strategy
to become a leader in green energy services, and this momentum has
continued with strategic milestones already achieved in the first
quarter of 2023.
"As the UK's second biggest solar power payments company with
more generator customers than supply, and which paid out a record
amount to renewable generators in 2022, we are already the go-to
energy company for solar generators.
"There is a potential GBP5 to GBP10 billion growth market in
clean energy technology installations among climate conscious
customers. We are ideally positioned for this, and are kitting
homes out homes with solar panels and batteries now and plan to
install 12,000 heat pumps by 2026.
A video overview of the results from the Chief Executive
Officer, Nigel Pocklington, is available to watch here:
https://www.fmp-tv.co.uk/2023/03/28/good-energy-strong-momentum-in-year-end-results/
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
Henry Reast / James Rudd 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.
Chair's review
Overview
Setting out in 2022 we aimed to make progress on our strategy
across supply, generation and transport to deliver on our ambition
of helping one million homes and businesses cut their carbon by
2025. We made substantial strides in executing our strategy by
funding Zap-Map's growth, investing in generation services by
launching smart export and acquiring a clean technology
installation business, and maintaining a trusted truly green supply
business against a very volatile backdrop.
We have entered 2023 a very different business to the one we
were 12 months before, having taken these tangible steps in our
transition to become a green energy services business during the
year under review. This, together with the fact that we remain
substantially debt free and have a strong cash position for
continued investment, is of benefit to all our stakeholders.
For our customers, they have access to a trusted partner which
can now facilitate their ambition to generate green power for their
home, and which can also ensure they earn more from the power they
generate. For our investors, they have exposure to a highly
exciting growth market and are benefitting from the value creation
achieved through our investment into Zap-Map. Plus, this growth and
expansion is underpinned by a stable energy supply business.
I opened my statement last year noting the tumultuous prior year
we had witnessed. 2021 was dominated by the continuation of the
global pandemic and national lockdowns and 2022 saw this volatility
continue, driven by Russia's aggression in Ukraine and the ensuing
global supply chain issues.
Forward prices for electricity and gas hit extraordinary levels,
hitting highs of over 10 times the norms of recent years. [ii] As a
supplier which buys all of its power from renewable sources, due to
the mechanics of the UK market Good Energy was far from immune from
the knock-on effects. These increased costs drove a 70.7% increase
in revenues and forced multiple price increases upon customers.
The rising costs emphasised the need to shift away from fossil
fuels and encouraged people to insulate themselves from the high
prices by switching to solar power, with double the number of
rooftop installations taking place in the year versus 2021.
[iii]
Amidst this volatile backdrop, we exited the year in a strong
position. We have a robust balance sheet, continue to invest in
high growth markets and are helping more homes and businesses save
money and decarbonise.
Strategic developments
Despite the challenging market context, 2022 was a
transformational year for Good Energy. We are well positioned for
high margin sales growth from green energy services going forward.
We now have a strong platform from which to execute on an extremely
compelling opportunity, and we are excited to take this part of the
business to the next level in 2023.
In January, we completed the sale of our generation assets. This
provided us with a robust and substantially debt-free balance sheet
as well as funds to invest in our green energy services proposition
and in turn, the next wave of decarbonisation.
Not long after, we participated in a GBP9m Series A fundraise by
Zap-Map, the UK's leading electric vehicle mapping platform.
Fleetcor, one of the world's leading business payment firms took a
minority stake, as they look to build on their leading fuel card
offering and help businesses transition to electric vehicles. This
deal values Zap-Map at GBP26.3m post money and adds non-cash profit
to our balance sheet.
In December, we completed the acquisition of Igloo Works, an
established UK based heat pump installation business with
capability for solar installs too. The acquisition represents a
significant milestone in delivering on Good Energy's strategy to
accelerate its capability in decentralised energy services,
complementing its established energy supply business. It also
supports Good Energy's ambition to help one million customers cut
carbon by 2025, creating a new service in the crucial clean, green
heating space. We expect to see further acquisitions in the
domestic energy services space and we look forward to updating the
market on progress in due course.
Capital allocation
Our substantially debt free position and strong cash balance
allows us to continue to invest for sustainable growth, including
further acquisitions in energy services and our capital allocation
policy reflects this. However, we recognise the importance of a
dividend to many shareholders.
Following a good operational performance in 2022 and reflecting
our confidence in the ongoing business, the Board recommend a final
dividend for 2022 of 2.0p per ordinary share, taking our full year
dividend to 2.75p (2021: 2.55p).
Board
At the AGM in June, Juliet Davenport, founder, former CEO and
then Non-Executive Director stood down from the Good Energy Board.
I want to take this opportunity to thank Juliet for her enormous
contribution to the wider energy transition. On behalf of the
Board, I want to thank her deeply for her contribution and look
forward to seeing her continue to inspire and lead the way towards
a cleaner, greener future.
Looking ahead
We are seeing a softening in volatility of the energy market
currently. Good Energy remains well positioned both from a
shorter-term balance sheet perspective, but also from a longer-term
strategic growth perspective. The climate crisis already provided
urgency to transition to a clean energy system. The current
economic and political turmoil provides geopolitical urgency to
achieve greater energy independence too.
The opportunity ahead of us is a compelling one. We are focussed
on fast growth areas, with good margin and low working capital
intensity. We have identified a target addressable market of almost
900,000 households in the next two years, which equates to a c.
GBP5 billion target addressable market. Including the medium term
meaningful green actions households, this increases to a c. GBP10
billion opportunity. Our engaged customer base of green-minded
households provides us with a strong initial pipeline for our
energy services and the interest in our new services from this
community has been highly encouraging.
Good Energy has a more powerful role than ever to play in
accelerating the transition to renewables and we look forward to
providing updates during what we expect to be another busy year for
your company.
Will Whitehorn, Chair
CEO's review
Our future energy system will not be a handful of suppliers
billing customers for energy produced by a few generators. It will
be a decentralised, digitised, cleaner, greener grid where homes
and businesses play an active role. Generating, sharing, storing,
using and travelling with clean power.
This is a vision Good Energy has driven towards for years. And
its urgency was more apparent than ever in 2022 as the volatility
of our current centralised largely fossil fuel-based system was
abundantly clear by surging costs and rising bills for
customers.
This future energy system is one in which Good Energy is already
a major player and our goal is to become the leading green energy
services company in the UK. As the UK's largest voluntary Feed-in
Tariff (FiT) administrator, and second largest overall, we are the
only energy supplier today which has more customers generating
their own power than buying ours. With over 180,000 FiT customers
we have more than 20% market share of the biggest decentralised
energy scheme in the UK today.
Robust financial performance and strong cash balance
During the energy crisis, which took hold in late 2021 and did
not let up throughout 2022, Good Energy continued to show
robustness. We sold our two wind and six solar farm generation
assets early in the year, a departure from our past enabling us to
invest in our future strategy and the next wave of decarbonisation.
The cash, alongside our prudent approach to hedging throughout the
year, has resulted in a strong balance sheet.
Our supply business has been a steady ship in choppy waters.
After two years without a price change we implemented several
throughout 2022, moving our prices as the market required. We
called for government support on bills, seeing the onset of
extraordinary rises during the critical winter months. This came
through the Energy Bill Support Scheme and the later announced
Energy Price Guarantee, in addition to the Energy Bill Discount
Scheme for businesses. Implementing these schemes often at very
short notice was a not insignificant task and we are proud to have
done so efficiently and effectively. With clear communication to
customers, we maintained the trust we have built over years and
this will be essential as we evolve into a green energy services
business.
Post period end, we are pleased to have signed our largest ever
deal with renewable energy giant Ørsted to provide clean power to
UK homes and businesses. Utilising the power from one of the
world's largest offshore windfarms, Ørsted's Hornsea 1 offshore
windfarm in the North Sea, the three year deal will provide 110GWh
per annum, the most significant in terms of volume in Good Energy's
history - and enough for almost 38,000 homes. This is testament to
the strong working relationship we have built with Ørsted and
speaks to the strong partnership approach we have.
Green shoots for decentralised energy
Through the challenges of 2022 there were some green shoots for
a cleaner, decentralised energy system. 2022 saw a surge in rooftop
solar installations, more than doubling the year previous to hit
highs not seen since the peak of the FiT scheme in 2015. [iv] This
was largely driven by customers looking to curb their bills by
gaining energy independence and took place without an especially
competitive export tariff market. The rates offered under the
government's replacement to FiT, the Smart Export Guarantee, were
especially low in the context of high import prices.
The rapidly growing rooftop solar market is one Good Energy is
perfectly positioned for and we have launched new tariffs to ensure
more people are rewarded fairly for their switch to green energy
sources. We launched smart export for Feed-in Tariff customers
towards the end of 2022, meaning these customers could earn more
for their power than the deemed 50% rate for export under the
scheme. And now we have launched Power for Good, a leading variable
export tariff for households with solar power, offering a better
export rate than under FiT or the standard rates under the
government's Smart Export Guarantee.
Igloo Works' was established as an installer of heat pumps, a
crucial technology to get the UK off gas, the fuel which is not
only contributing to climate change but been the cause of
stratospheric energy prices over the past 12 to 18 months. This
represents another significant growth opportunity, considering the
government's stated target of 600,000 annual heat pump sales by
2028. [v] Following the December acquisition the company has been
fully incorporated into the Good Energy brand and we have also
built out this business' ability to install domestic solar panels.
Having set to work quickly, we have since completed our first solar
installation meaning that customers can now get a heat pump or
solar panels from Good Energy as well as the truly 100% renewable
electricity to power it, or payment for what they export. We have
an ambitious plan to ramp up sales from our current customer base -
which has already expressed strong interest in our new services -
as well as from new customers. Another significant growth
opportunity as we approach the government's stated target of
600,000 annual heat pump sales by 2028.
Travel with clean power
Another pillar of our strategy which saw growth through 2022 is
electrification of transport. Despite supply chain issues and
rising electricity prices, more than 265,000 electric cars were
registered in 2022, a growth of 40% on 2021 with a total on UK
roads now counting nearly 700,000 [vi] . Zap-Map continued to
maintain its strong market share in this rapidly growing
contingent, reaching 1,000,000 downloads and over 500,000
registered users.
In its Series A Zap-Map raised GBP9m, including a further
GBP3.7m from Good Energy in addition to GBP5.3m new strategic
investment from global fleet payments giant Fleetcor. The
transaction values the business at GBP26.3m with Good Energy's
shareholding at 49.9%.
Zap-Map's revenue channels are all growing. Subscriptions are
showing particular strength among new registered users. Zap-Pay,
Zap-Map's solution to a fragmented EV charging payments experience,
is now available for use on 25% of the UK's rapid chargers. Demand
for Zap-Map's unique data and insights is growing in lockstep with
the market, and a new dedicated insights business unit is
successfully fulfilling this as a strong commercial
proposition.
Outlook
Having established our goal to help one million homes and
businesses cut their carbon by 2025 last year, we are already well
on our way. We believe that our target customer opportunity in
energy services is a GBP5bn - GBP10bn market where we are focused
on driving high margin, low capital intensity sales growth.
Further M&A will be a core near term focus, following the
success of recent buy and build acquisitions and a way to
capitalise on the market opportunity. Our strong community of
green-minded domestic customers provide a strong initial pipeline
for acquired businesses and enquiries to date following the Igloo
acquisition have been highly encouraging. Wholesale energy prices
have eased into 2023, but we continue to take a prudent approach to
trading to maintain our robust position.
With a strong balance sheet, a strategy of investment in high
growth markets to help more to decarbonise, Good Energy's cleaner,
greener future as a services company looks very positive. Our
ambition is to be the UK's leading provider of green energy
services, with the ability to install green energy infrastructure
and provide the best tariffs for the energy produced by our
customers. The tangible steps made in 2022 have set the scene for
an exciting 2023.
Nigel Pocklington, CEO
Market review
The energy market saw unprecedented volatility in 2022.
Wholesale energy prices hit highs of over 10 times pre-2022 norms,
fluctuating throughout the year but remaining at extreme
levels.
These extreme highs and volatility were driven overwhelmingly by
global gas prices due to the conflict in Ukraine and sanctions on
Russia, and the UK was especially impacted due to its reliance on
gas for both heating and electricity generation. The mechanics of
the capacity market in the UK meant that even renewable electricity
prices were driven upwards, increasing Good Energy's costs.
In 2022, in a more consolidated supply market, these increased
costs impacted customers' bills. The energy price cap rose by 54%
in April 2022, and soon looked to be three times the year prior
from 1 October.
Government schemes
The government had announced it would be stepping in to support
through the Energy Bills Support Scheme (EBSS), but as October
approached it became clear that a greater level of intervention
would be required.
The Energy Price Guarantee (EPG) was announced in September. A
unit rate discount, it was applied from 1 October to reduce a
typical annual dual fuel bill on a price capped tariff to GBP2,500,
with the EBSS GBP400 payment made in monthly instalments over the
winter period reducing this further.
Support for businesses was also introduced in the form of the
Energy Bill Relief Scheme, operating similarly to the EPG by
discounting unit rates.
Regulatory environment
Following the widespread failure of energy suppliers in 2021 the
regulatory environment changed significantly, from a largely
liberal approach to one of greatly increased scrutiny.
Ofgem's Market Compliance Review process demanded a new level of
transparency from suppliers and has been applied with haste as the
regulator looks to reform the market. The reviews have looked in
detail at areas including Direct Debit processes, general standards
of performance, customer service and customers in payment
difficulty.
Vulnerable customers
Of greatest concern throughout this crisis has been the impact
of increasing bills on vulnerable customers and the growing number
in fuel poverty - defined as spending 10% or more of income on
energy.
Whilst the government schemes shielded millions from the very
worst of rising bills, the price cap of GBP2,500 in place from
October is still nearly double the level a year prior, meaning
significant bill shock for many. For those previously on cheaper
fixed deals which largely do not exist in the market any longer,
this increase will have been even sharper.
Particular focus has been given to prepayment customers, as the
method of payment more common for lower income households. Good
Energy has a very small proportion of customers which pay via this
method - just 1% compared to upwards of 15% across the industry
[vii] . We do not install traditional prepayment meters, as we
believe they are not a good solution for any customer. We offer
smart prepayment in conjunction with debt management plans as a way
for customers to take control of their usage.
Good Energy campaigned vocally not only for the government
support schemes to shield customers in the short term, but for
investment into energy efficiency and renewables to reduce bills
for the longer term. We joined Energy UK's Vulnerability Commitment
and began offering the Warm Home Discount. As part of the latter we
donated to the fuel poverty charity National Energy Action. We also
made a special donation to our long-term partners Friends of the
Earth in support of their United for Warm Homes campaign.
We are now reducing our smart prepayment prices, making our
smart prepay tariff the cheapest price capped tariff on the market
from 1 April - ahead of the government announcing its plans for all
suppliers to do this.
Good Energy has called for the implementation of a social tariff
available to lower income customers industry wide to make energy
bills fairer. Ultimately, we believe the most important aspect of
the pathway to a permanently fairer energy system is greater
investment in renewables, flexibility and energy efficiency to make
energy cheaper and greener for everyone.
Strategic update - Our transition to a green energy services
company
We have a clear strategic vision. To support one million homes
and businesses cut carbon from their energy and transport use by
2025. Our aim is to power a cleaner, greener, world by making it
simple to generate, share, store, use and travel by clean
power.
Aligning the business to our strategic vision
Our history has seen us evolve as the renewable energy industry
has gathered pace over the past twenty years. Whilst our purpose
and mission remains unchanged, how we are best placed to achieve
that mission is evolving. Where our recent past focused on large
scale generation and renewable supply, we now believe that we can
have a greater impact through the provision of energy services,
underpinned by renewable supply.
Energy services
Our definition of energy services focuses on three core
areas:
-- Solar and generation
-- Heat
-- Transport
Services and tariffs for domestic and small generators, the
installation of solar, battery storage and heat pumps and the
provision of electric vehicle services that help drivers search,
plan, route and pay.
These are high growth markets, typically requiring less working
capital. We will be deploying capital for both organic growth and
M&A in these markets to build on our existing capabilities.
Renewable supply
We serve both domestic and business customers, with fairly
priced, real 100% renewable electricity. This is what underpins our
energy services offering. We have proven operating capability and
stable growth in a highly regulated market.
Energy services - a GBP5 billion to GBP10 billion
opportunity
In the summer of 2022, we undertook a detailed assessment of UK
households to develop an extensive understanding of our target
customers. In the UK, there are approximately 29 million domestic
households. Our target customers want to go green, make a
difference and save money. Of the 29 million households, we view
4.1 million households as our target customers.
Of these 4.1 million, our immediate focus is on a 1.1 million
segment we label as 'green champions'. Typically older, wealthier,
own their own homes and willing to invest to save money and combat
climate change. A larger, but more medium-term focus of a further 3
million households are the 'meaningful green actions'. Typically
younger, wanting to make bold climate decisions, but require more
barriers of adoption removing.
This detailed analysis showed that 16% of these green champions
already had solar installed, 6% had a battery and 9% a heat pump.
This compares to the national average of 4% of households who have
solar installed. They are the early adopters. Of the remaining pool
of customers, 32% said they would consider solar in the next two
years, 35% a battery and 22% a heat pump. There were larger, albeit
potentially more aspirational, figures for our meaningful green
actions segment. We therefore see a target addressable market of
almost 900,000 households in the next two years, which equates to a
c. GBP5 billion target addressable market. Including the medium
term meaningful green actions households, this increases to a c.
GBP10 billion opportunity. Whilst we will be unable to serve all of
those customers, it identifies the scale of opportunity that exists
today. This is no longer an early adopter market for energy
enthusiasts.
Solar, heat pumps and EV markets are fast growth markets, with
good margin and low working capital intensity. In comparison, there
is unlikely to be growth in the domestic energy supply market in
the near term and business supply growth must be selective. Margins
are low, and working capital is higher as a result of elevated
energy costs and trading collateral requirements. Energy services
offers better returns than energy supply in both the short and long
term.
Solar and generation
The UK solar market has seen near record levels of growth
through 2022 as energy prices remained high. Installs increased
over 125% to 132,000 and are near the record highs of 2015 at the
peak of the feed in tariff administration. The vast majority of
this demand was domestic installs which accounted for 88% of the
volumes in 2022, as people looked to shield themselves from the
rising energy costs.
We anticipate cumulative capacity on the grid to be 7.5GWh by
2030 in order to be on track with net zero targets, which outlines
a 9.9% CAGR to 2030. [viii] However, from install levels seen in
2022, we calculate that this only requires a 2.9% annual growth in
install levels to c. 167k per year. With energy costs unlikely to
be falling quickly in the short term, we see this as the main
driver for install growth, which will continue to build
momentum.
Solar tariffs and innovation
In early 2023 we launched a new market leading smart export
tariff for households with solar panels. 'Power for Good' will pay
10p per kWh, a leading variable export tariff rate aligned to the
market and reviewed on a quarterly basis and better than the
standard rates offered under the Government's Smart Export
Guarantee.
The new tariff, which will require homes with solar panels to
have a compatible smart meter, means a typical solar powered home
could get paid around GBP150 per year for the energy they share.
That's in addition to saving around GBP500 off their annual energy
bills for what they use themselves.
We believe that people who have solar panels should be getting a
fair price for their power and our ambition is for Good Energy to
be known as the as the go-to supplier if you want the best tariffs
for the power you generate from the panels on your roof.
We are already the second biggest solar power payment company in
the UK through the Feed-in Tariff (FiT), with over 180,000
customers for whom we administrate hundreds of millions of pounds
in payments. We recently launched smart export for our FiT
customers, meaning these micro-generators could be paid more for
their export as it is based on what they actually share with the
grid rather than the deemed 50% normally paid.
Power for Good will be Good Energy's first smart export tariff
available to non-FiT customers including those who installed their
solar panels after the scheme closed in 2019.
Scaling solar and generation services
Following the acquisition of Igloo Works in December 2022, we
also recently announced that we will be installing solar panels.
The number of installations on rooftops surged in 2022 as people
looked to shield themselves from high energy bills and take control
of their power. The trend is set to continue as energy prices
remain high and demand for clean energy remains strong, and we are
looking to help customers with its install offer and the new market
leading tariff.
We will continue to be acquisitive in this space in order to
bolster our expertise in solar installation and increase our
installation capacity. Whilst we have significant national demand
from our own customer base, we will take a highly regionalised
approach to developing installation capability.
The solar installation market remains highly fragmented with
over 3,000 registered installers and the vast majority installing
less than 200 installs per year. Our growth strategy is focused on
a regional roll up of these companies to act as installation arms.
We anticipate a number of acquisitions, similar to our approach
with Igloo Works, in order to build a footprint to meet this
demand. From this acquired base, we will look to grow install
capacity organically and leverage the Good Energy credentials of a
strong brand and corporate functions to drive increased reach and
help customers cut carbon and save money.
We expect to complete further acquisitions throughout 2023,
whilst continuing to target our existing customer base.
Heat
Like solar installation the heat pump installation market has
seen significant growth throughout 2022 and a 35% CAGR over the two
years since 2020. [ix] , with air source heat pumps accounting for
over 85% of installations, as people looked to benefit from solar
generation and shield themselves from rising gas costs.
The boiler upgrade scheme was introduced in March 2022, offering
a GBP5,000 reduction from the total cost of installation. This
replaced the former renewable heat incentive, but uptake has been
slow. A combination of higher up-front costs and underwhelming
Government support.
Whilst growth in 2022 has been positive, a lot more needs to be
done to hit net zero targets. Our modelling outlines over 400,000
installs per year by 2030 targets, with a 20% CAGR growth in
installation volumes required to achieve this. This year has been a
tipping point for heat pump installations but more needs to be done
to reduce up front costs, promote awareness and debunk performance
myths.
To date, around 60% of people with heat pumps have had solar
installed first, [x] outlining the benefit of using excess solar
generation to power the electricity required for an air source heat
pump. We see this as a clear opportunity to market to our solar
installation customers and Feed-in Tariff customer base.
Heat pump installations underway and growing
Following the acquisition of Igloo Works, heat pump
installations have continued to grow and we are targeting 500
installations in 2023 and to build the capacity for 12,000 per year
by 2026. Whilst these targets are ambitious, we believe we have a
customer base and audience who are open to this. Initially our
focus is on serving our c. 60k domestic energy supply customers,
and selectively targeting both electric vehicle drivers and those
with solar generation. In time, we have a future ambition to target
the 1.5 million boiler replacement market, but this will take a
meaningful shift in volume to reduce the up front cost for
mainstream consumers.
In March 2023 we incorporated the business into the Good Energy
brand and have continued to develop a range of services to improve
overall user experience. This will include energy tariffs to
underpin the overall renewable offering and reduce the total cost
of ownership.
Transport
The electric vehicle market saw continued growth in 2022,
following impressive growth in recent years. Total EVs on the road
now totals over 1.1m, with over 60% of these being battery electric
vehicles in 2022. These battery electric vehicles are Zap-Map's
core market.
The Battery EV market grew 67% to over 700,000 in 2022 and has a
2-year CAGR of 80%. Cumulatively, Zap-Map now has over 1 million
downloads of the app and over 550,000 registered users, up 63% in
2022 and a 2 year CAGR of 83%. It continues to retain its position
as the market leader in the high growth electric vehicle market,
with registered user penetration at over 80% of all electric
vehicle drivers.
Zap-Map: Building scale and recurring revenue
In August 2022, Zap-Map closed a GBP9m series A funding round
including investment from Good Energy and Fleetcor:
-- GBP5.3m new investment from Fleetcor provided strategic
opportunities to leverage Fleetcor's global footprint and
partnerships with electric vehicle fleets and charging providers in
support of Zap-Map's international expansion plans.
-- Good Energy invested GBP3.7m in line with its strategy to
make it simple for people to generate, share, store, use and travel
with clean power.
Zap-Map's commercial goals include building on its
paid-subscription services and initiating international expansion.
The funds raised are being deployed 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, which began in
late 2022. Zap-Map registered users as a share of battery EV
drivers was stable around 80% and the first steps have been taken
in international expansion.
Zap-Map's share of EV market has continued to transfer into
revenue growth and they delivered over GBP1m in revenue in 2022 and
are on track to double this recurring revenue in 2023 growing
across its three core revenue streams.
-- Subscriptions
o Monthly or annual subscriptions for added-value features on
mobile and in-car.
o Active app users growing in line with BEV market growth.
Targeting 10% of registered users on paid subscription
services.
-- Pay
o 12 charging networks now signed covering 25% of the rapid
charger network.
o Zap-Pay utilisation continuing to increase. Higher charging
costs on the public network allowing for more flexible payment
offers.
o Integration with fleet Allstar Electric card for payment, with
Fleetcor.
-- Data and insights
o Dedicated insights business unit created to serve growing
demand.
o Increased need to understand the EV landscape for a growing
range of businesses and organisations.
o Zap-Map possesses the broadest and deepest data set, excellent
market knowledge and a wide range of recurring data services. High
growth potential.
Zap-Map growth
A major part of the Series A investment is to allow Zap-Map to
build on its market leading data and mapping, to develop its user
experience. This will allow for existing services to be improved
and new revenue streams to be developed. These include increasing
subscriptions through value-add services, improve Zap-Pay
functionality within the user journey and develop an API
(application programme interface) solution to allow the app
functionality to be utilised within partner apps and platforms.
The API solution is a single-entry point to enable third party
digital products. The Zap-Map platform is powered by scalable,
secure, and tested APIs. The first iteration of this has been
developed along Allstar, Fleetcor's UK fuel brand, as part of the
Allstar Electric fuel card. Further API capability will be rolled
out to a wide range of partners for search, payment, and planning.
This provides a range of other companies one integration to
leverage Zap-Map's unique applications.
Growth will be targeted across segments.
-- Free users will have the widest choice, best data, and the simplest way to pay.
-- Premium users can access added value charging features on mobile and in car.
-- Insights and data services use rich data to support required
growth in UK EV charging infrastructure.
-- Strategic partners can gain the ability to build their own digital EV product set.
Monetisation will focus on the development of recurring revenue
streams by growing subscriptions, data API sales, insights and
partner transaction fees. Payment transactions and advertising
revenue will enhance revenues further.
Renewable supply
We continue to operate in both the domestic and business UK
energy supply markets, but remain a premium provider for
green-minded customers. We provide a range of import and export
services, which underpin our overall offering. Our import services
provide 100% real renewable electricity to domestic, small
businesses and smaller half hourly business customers. We do not
focus on large scale industrial customers. Our export services
provide power purchase agreements (PPAs), Feed-in Tariff
administration services and smart generation offers for domestic
and business customers.
In domestic supply, we are witnessing a market with limited
growth potential with the introduction of the market stabilisation
charge, high wholesale costs and increased working capital
requirements for purchasing power. We have continued to make good
progress with our smart meter roll out and now have over 40,000
installed to date.
In Business supply, we have a clear size and sectoral targeting.
Small, medium sized enterprises (SMEs), and half hourly metered
business sites, with a focus on purpose driven businesses looking
for a truly green supply product. Recent customer renewals include
The Crown Estate, PriceWaterhouseCoopers, Rapanui and BNP
Paribas.
Our purchasing of PPA's is what sets us apart and allows us to
provide 100% renewable electricity. This is sourced from over 1,700
individual generators including a mix of wind, solar, hydro and
anaerobic digestion.
Near term growth pathway
Our strategic vision remains unchanged, in helping one million
homes and businesses cut carbon from their energy and transport use
by 2025. Our growth in 2023 will be achieved through.
-- Roll out of solar services to our existing client base.
-- Roll out of solar and heat pump installations.
-- Acquire more capacity to accelerate services strategy faster.
-- Drive uptake of new tariffs to maximise our customer base and potential customers.
For many, the purchase of an electric vehicle will be the
trigger into further energy services products. Initially this will
require the need to search, plan and pay for EV charging on the
road, and charge at home with cheaper, smarter off-peak tariffs.
Research by Zap-Map indicates that EV drivers are seven times more
likely to have solar PV installed than the national average, with
29% of respondents having solar panels on their home.
For those with EVs, solar PV allows you to reduce your overall
energy costs, support off grid consumption and increase value
through flexibility by exporting excess generation or storing it
for avoiding expensive on peak consumption. Our installation
partner data shows that on average 80% of solar PV installs are now
also selling a battery storage system to maximise this benefit.
MCS (Microgeneration Certification Scheme) data shows that on
average 60% of recent heat pump installations had solar PV
installed first. This allows consumers to minimise overall heating
costs by powering from solar, or replace increasingly expensive gas
and oil products.
What ties this all together are smart energy tariffs that
maximise the ability to save money and reduce carbon. These are
smart meter enabled, and bespoke recommendations will allow us to
remove complexity for consumers. In time, the technology potential
will allow much of this to be automated to increase cost savings
further. Smart charging, load shifting and further flexibility
services provide material upside.
We remain committed to building out these range of services
through our investments in Zap-Map, Igloo Works and further M&A
activity. Initially through the installation of solar, storage and
heat pump hardware, before wrapping appropriate tariffs to optimise
consumption. And finally monetising these assets as scale is
built.
OPERATING REVIEW
Wholesale energy market conditions
Power prices
The development of power prices in the last 24 months has been
significant, 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 26
August, and had dropped/stabilised to GBP1.30/therm by mid-January
2023 driven by high European gas storage levels, LNG imports into
Europe, a warmer than seasonal normal winter and a general removal
of risk pricing as the industry adapted to the loss of Russian Oil
and Gas flows.
Weather conditions in 2022 have reflected a warmer year than
ever recorded before. The provisional UK mean temperature for 2022
was 10.0 degC, which is 0.9 degC above average, reaching 10 degC
for the first time and exceeding the UK's previous warmest year
(2014, 9.9 degC). Overall Good Energy gas supply volume was down
17% in 2022 (vs 2021) as the warm temperature combined with price
and political reasons to drive down usage.
Overall electricity supply volumes were up 2.5% (vs 2021)
reflecting continued COVID recovery and increased business supply
volumes.
Our renewable supply business
Cash collections
Significant rise in cash collections in 2022 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 30.6% to 8,000. Despite
this reduction in customer numbers, business supply volumes grew by
5% reflecting higher usage contracts. (2022: 457 GWh (Gigawatt
hours), 2021: 435 GWh).
Domestic
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 0.1% to 180,300
versus 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. In
2022,13,000 meters were installed in the year delivering on our
2022 target. Over 40,000 meters have been installed to date.
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.
Financial performance
Profit and loss
Revenue increased 70% in the period to GBP248.7m (2021:
GBP146.0m) driven by increased tariffs which have followed the
volatility seen in worldwide wholesale power and gas costs. Cost of
sales increased by 84% to GBP218.8m (2021 GBP119.0m) driven by
geopolitical impacts on wholesale costs.
Reported gross profit increased 10.7% to GBP29.9m (2021:
GBP27.0m). Gross margin decreased to 12.0% (2021 Reported: 18.5%,
2021 Underlying 14.5%). The 2.5% decline in underlying margins
reflects that pricing whilst rising could not keep pace with
rapidly increasing wholesale costs through H1 2022 (price cap).
Total administration costs increased 20% to GBP28.8m. This
increase relates to the booking of expected credit loss (ECL)
provisions at 2022 year-end rates, alongside the planned expansion
of Zap-Map, energy services investments, and inflationary pressures
experienced by all businesses during 2022.
Finance costs decreased by 40% to GBP0.4m due to a combination
of significant debt reduction over the past few years and the sale
of the generation asset portfolio.
Reported profit before tax of GBP8.5m includes GBP7m of profit
recognised on the deconsolidation of the Zap Map investment due to
relevant accounting treatment , alongside GBP(2.0)m of losses
related to the costs associated with the ZAPMAP business in 2022.
Underlying profit before tax is GBP3.1m which includes price,
weather, industry and the non-repeat of 2021 impairment. Adding
back GBP1.3m of depreciation and amortisation gives GBP4.4m EBITDA
for the period.
Reported tax credit at H1 2022 include the impact one-off
benefits related to generation business sale.
The reported profit for the period was GBP9.2m (2021: -GBP3.9m).
This reflects the increase in value of the Zap Map investment as
explained above and extraordinary market conditions seen since H2
2021 and continuing to this day.
*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
The increased tariffs alongside the recovery from 2021 business
billing migration issues has seen a significant improvement in
collections year on year. Collections in H1 were up 72% and in H2
were up 88% versus the same periods in 2021.
There was a net increase in cash of GBP17.8m, 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
GBP2.7m and the acquisition of Igloo Works for GBP1.8m.
Cash and cash equivalents at the end of Dec 2022 were GBP24.5m,
with a further GBP8.4m sat in restricted deposit accounts. GBP4.5m
of which relates to Government support scheme monies received in
late December for application to business and domestic customer
accounts in January.
Funding and debt
Our business is debt free on a net basis.
Substantial progress has been made against reducing Group
finance costs and reducing the gearing ratio. The remaining Good
Energy Bonds II outstanding (GBP4.9m) is split GBP10k short term
liabilities and GBP4.9m within long term liabilities. This is due
to an annual redemption request window for bondholders in December
of each year.
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 increased to 59.7p (2021:
-20.7p).
Dividend
Following stable operational performance in 2022, the sale of
the generation portfolio and reflecting our confidence in the
ongoing business, the Board recommend a final dividend for 2022 of
2.0p per ordinary share.
Good Energy continues to operate a scrip dividend scheme and the
payment timetable of the final dividend will be announced in due
course.
Expected Credit Loss (ECL)
ECL charge in the year was GBP3.9m, this is an increase of
GBP1.0m (2021: GBP2.9m).
The main impact of the year is elevated tariffs. Revenues have
significantly increased but this has been partially offset by
Government support schemes reducing the impact of higher prices on
end customers.
Zap-Map investment
2022 saw a P&L loss related to Zap Map of GBP(2.0)m which
increased GBP(1.0)m from 2021, following a period of continued
investment. This was expected and related to Zap Map's growth plan.
From 8 August 2022 Good Energy decreased its stake to a 49.9%
minority shareholding and deconsolidated Zap Map which is now an
Associate .
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. 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
Good Energy will voluntarily withdraw the Company's ordinary
shares ("Ordinary Shares") from trading on the AQSE Growth Market.
Therefore, trading in the Ordinary Shares will cease at 4:30 p.m.
on 31 March 2023. Trading in the Ordinary Shares will continue on
the AIM market of the London Stock Exchange.
Consolidated Statement of Comprehensive Income (Unaudited)
For the year ended 31 December 2022 2022 2021
GBP'000 GBP'000
Notes Unaudited
REVENUE 2 248,682 146,045
Cost of sales (218,768) (119,019)
---------- ----------
GROSS PROFIT 29,914 27,026
Administrative expenses (28,805) (23,816)
Non-underlying costs - (806)
Other operating income 66 -
---------- ----------
OPERATING PROFIT 1,175 2,404
Finance income 4 633 14
Finance costs 4 (351) (584)
Gain arising on loss of control of 6,884 -
subsidiary
Share of loss of associate (712) -
---------- ----------
PROFIT BEFORE TAX 7,629 1,834
Taxation 737 (187)
---------- ----------
PROFIT FOR THE YEAR FROM CONTINUING
OPERATIONS 8,366 1,647
---------- ----------
DISCONTINUED OPERATIONS
Profit/(Loss) from discontinued operations,
after tax 858 (5,546)
---------- ----------
PROFIT/ (LOSS) FOR THE PERIOD 9,224 (3,899)
Attributable to
Good Energy Group PLC 9,816 (3,389)
Non-Controlling Interest (592) (510)
========== ==========
OTHER COMPREHENSIVE INCOME:
Other comprehensive income for the
year, net of tax - 677
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR ATTRIBUTABLE TO OWNERS OF THE
PARENT COMPANY 9,224 (3,222)
========== ==========
Earnings per share for the year 5 Basic 59.7p (20.7) p
5 Diluted 59.7p (20.7) p
Earnings per share for the year (continuing
operations) 5 Basic 50.9p 13.2p
5 Diluted 50.9p 13.0p
Consolidated Statement of Financial Position (Unaudited)
As at 31 December 2022
2022 2021
GBP '000 GBP '000
Unaudited
ASSETS
Non-current assets
Property, plant and equipment 117 209
Intangible assets 3,507 3,891
Right of use assets 324 851
Deferred Tax asset 162 173
Equity investments in associate 12,578 -
Total non-current assets 16,688 5,124
Current assets
Inventories 9,211 7,682
Trade and other receivables 56,882 35,928
Restricted deposit accounts 8,462 2,414
Cash and cash equivalents 24,487 6,699
Total current assets 99,042 52,723
---------- ------------
Held for sale assets - 64,798
---------- ------------
TOTAL ASSETS 115,730 122,645
---------- ------------
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 844 840
Share premium account 12,915 12,790
Employee Benefit Trust shares (7) (444)
Retained earnings 25,231 4,774
Revaluation surplus - 11,693
Total equity attributable to members of
the parent company 38,983 29,653
Non-Controlling Interests - (325)
---------- ------------
Total equity 38,983 29,328
Non-current liabilities
Borrowings 4,927 5,066
Total non-current liabilities 4,927 5,066
Current liabilities
Borrowings 294 2,118
Trade and other payables 71,526 40,911
Total current liabilities 71,820 43,029
---------- ------------
Liabilities associated with held for sale
assets - 45,223
---------- ------------
Total liabilities 76,747 93,318
---------- ------------
TOTAL EQUITY AND LIABILITIES 115,730 122,646
---------- ------------
Consolidated Statement of Changes in Equity (Unaudited)
For the year ended 31 December 2022
Share Share EBT Retained Revaluation Total Non-controlling Total
capital premium shares earnings surplus equity interests
attributable
to members
of the
Parent
Company
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
At 1 January
2021 833 12,790 (502) 6,854 12,472 32,447 185 32,632
(Loss) for the
year - - - (3,389) - (3,389) (510) (3,899)
Other
comprehensive
income for
the
year - - - 677 - 677 - 677
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
Total
comprehensive
income for
the
year - - - (2,712) - (2,712) (510) (3,222)
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
Exercise of
options 7 58 (40) - 25 - 25
Dividends paid - - - (108) - (108) - (108)
Transfer of
revaluation
to retained
earnings - - - 779 (779) - - -
Total
contributions
by and
distributions
to owners of
the parent,
recognised
directly
in equity 7 - 58 631 (779) (83) - (83)
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
At 31 December
2021 840 12,790 (444) 4,773 11,693 29,652 (325) 29,327
=========== ======== ========== ========= ============ ================ ================ ========
At 1 January
2022 840 12,790 (444) 4,773 11,693 29,652 (325) 29,327
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
Profit for the
year - - - 9,816 - 9,816 (592) 9,224
Other - - - - - - - -
comprehensive
income for the
year
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
Total
comprehensive
income for
the
year - - - 9,816 - 9,816 (592) 9,224
Share based
payments - - - 198 - 198 - 198
Dividend Paid - - - (297) - (297) - (297)
Scrip
dividends
issued 3 125 - (128) - - - -
Transaction
arising from
loss of
control
of subsidiary - - - (592) - (592) 917 325
Exercise of
options 1 - 437 (232) - 206 - 206
Transfer of
revaluation
to retained
earnings - - - 11,693 (11,693) - - -
Total
contributions
by and
distributions
to owners of
the parent,
recognised
directly
in equity 4 125 437 10,642 (11,693) (485) 917 432
----------- -------- ---------- --------- ------------ ---------------- ---------------- --------
At 31 December
2022 844 12,915 (7) 25,231 - 38,983 - 38,983
=========== ======== ========== ========= ============ ================ ================ ========
Consolidated Statement of Cash Flows (Unaudited)
For the year ended 31 December 2022
2022 2021
GBP'000 GBP'000
Unaudited
Cash flows from operating activities
Cash generated from operations 5,763 3,900
Finance income 17 620
Finance cost (351) (2,902)
Income tax received - -
---------- ---------
Net cash flows generated from operating activities 5,429 1,618
---------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (9) (248)
Purchase of intangible fixed assets (125) (760)
Transfers (to)/from restricted deposit accounts (1,515) 1,971
Acquisition of subsidiary, net of cash held in (1,725) -
the subsidiary
Investment in associate (2,794) -
Proceeds from disposal of held for sale assets 20,351 -
Net cash flows used in investing activities 14,183 963
---------- ---------
Cash flows from financing activities
Payments of dividends (297) (108)
Proceeds from borrowings - 6,786
Repayment of borrowings (1,382) (18,076)
Capital repayments of leases (582) (616)
Proceeds from exercise of share options 437 26
---------- ---------
Net cash flows used in financing activities (1,824) (11,988)
---------- ---------
Net increase/(decrease) in cash and cash equivalents 17,788 (9,408)
Cash and cash equivalents at beginning of year 6,699 18,282
---------- ---------
Cash and cash equivalents at end of year
Represented by: 24,487 8,874
Cash and cash equivalents for discontinued operations - 2,175
Cash and cash equivalents for continuing operations 24,487 6,699
---------- ---------
Notes to the Financial Information (Unaudited)
For the year ended 31 December 2022
1. Basis of Preparation
Good Energy Group PLC is an AIM listed company, incorporated in
England and Wales and domiciled in the United Kingdom, under the
Companies Act 2006.
The principal activity of Good Energy Group PLC is that of a
holding and management company to the Group. More detailed
information on the Group's activities is set out in the Chairman's
statement, the Chief Executive's review and the Finance Director's
review.
The unaudited Preliminary Report has been prepared using
consistent accounting policies with those of the previous financial
year. It does not contain sufficient information to comply with the
disclosure requirements of UK-adopted international accounting
standards .
The Preliminary Report was approved by the Approvals Committee
and the Audit Committee and adopted by the Board of Directors. The
Preliminary Report does not constitute statutory financial
statements within the meaning of section 434 of the Companies Act
2006 and has not been audited.
On 24 November 2021, the Group publicly announced the decision
of its Board of Directors to sell the Good Energy Holding Company
No. 1 Limited group including its wholly owned subsidiaries
("GEGAN
group"). The sale of the GEGAN group was completed on 19 January
2022. At 31 December 2021 the GEGAN group was classified as a
disposal group held for sale and as a discontinued operation. The
business of GEGAN group represented the entirety of the Group's
Electricity Generation operating segment until 24 November 2021.
With GEGAN group being classified as discontinued operations, the
Electricity Generation segment is no longer presented in the
segment note.
On 8 August 2022, a subsidiary of the Group (Zap-Map Limited)
completed a GBP9m Series A fundraise. This included a further
GBP3.7m investment from Good Energy and a GBP5.3m investment from
new strategic investor Fleetcor UK Acquisition Limited
("Fleetcor"), the leading global fuel card and payment provider
with a US$17 billion market cap. From the date of the fundraise
Good Energy no longer includes Zap-Map as a subsidiary within the
financial statements. The results of Zap-Map are now recognised in
line with accounting for associates. A gain of GBP6.9m has been
recognised on disposal of the former subsidiary. Good Energy Group
PLC remains a significant investor in Zap-Map.
On 2 December 2022, the Group acquired the entire share capital
of Igloo Works Limited ("Igloo"), an established UK based heat pump
installation business (the "Acquisition"), for an initial
consideration of GBP1.75 million. The results of Igloo Works are
consolidated within the financial statements.
The accounting policies adopted, other than as documented above,
are consistent with those of the annual financial statements for
the year ended 31 December 2022 , as described in those financial
statements.
The Preliminary Report is presented in pounds sterling because
that is the currency of the primary economic environment in which
the Group operates.
The Preliminary Report will be announced to all shareholders on
the London Stock Exchange and published on the Group's website on
28 March 2023 . Copies will be available to members of the public
upon application to the Company Secretary at Good Energy, Monkton
Park Offices, Monkton Park, Chippenham, Wiltshire, United Kingdom,
SN15 1GH.
2. Segmental Analysis
The chief operating decision-maker has been identified as the
Board of Directors (the 'Board'). The Board reviews the Group's
internal reporting in order to assess performance and allocate
resources. Management has determined the operating segments based
on these reports. The Board considers the business from a business
class perspective, with each of the main trading subsidiaries
accounting for each of the business classes. The main segments
are:
-- Supply companies (including electricity supply, FiT administration and gas supply);
-- Energy as a service (including Igloo Works, Zap-Map and nextgreencar.com)
-- Holding companies, being the activity of Good Energy Group PLC.
The Board assesses the performance of the operating segments
based primarily on summary financial information, extracts of which
are reproduced below. An analysis of profit and loss, assets and
liabilities and additions to non-current assets, by class of
business, with a reconciliation of segmental analysis to reported
results follows:
Segmental analysis: 31 December 2022 - Unaudited
Electricity FIT Gas Total Energy Holding Total
Supply Administration Supply Supply as a Companies/Consoli-dation -
Companies service Adjustments Continuing
Operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Revenue from
external
customers 205,942 5,588 36,500 248,030 652 - 248,682
Total revenue 205,942 5,588 36,500 248,030 652 - 248,682
------------ --------------- --------- ---------- -------- ------------------------- -----------
Expenditure
Cost of sales (190,391) (688) (27,516) (218,595) (196) 23 (218,768)
Gross Profit 15,551 4,900 8,984 29,435 456 23 29,914
Administrative
expenses (20,685) (2,041) (4,273) (26,999)
Net other
operating
income/
(costs) (156) 170 52 66
Depreciation
& amortisation (1,806) - - (1,806)
------------ --------------- --------- ---------- -------- ------------------------- -----------
Operating
profit/(loss) 6,788 (1,415) (4,198) 1,175
Net finance
costs (96) (3) 381 282
Gain arising
on loss of
control of
subsidiary - 6,884 6,884
Share of loss
of associate - - (712) (712)
------------ --------------- --------- ---------- -------- ------------------------- -----------
Profit/(loss)
before tax 6,692 (1,418) 2,355 7,629
Segments
assets &
liabilities
Segment assets 67,636 56 48,041 115,733
Segment
liabilities (59,544) (279) (16,924) (76,747)
---------------- ------------ --------------- --------- ---------- -------- ------------------------- -----------
Net asset/
(liabilities) 8,092 (223) 31,117 38,936
---------------- ------------ --------------- --------- ---------- -------- ------------------------- -----------
Additions
to non-current
assets - - 1,929 1,929
All turnover arose within the United Kingdom.
Segmental analysis: 31 December 2021
Electricity FIT Gas Total Energy Holding Total
Supply Admin-isration Supply Supply as a Companies/Consoli-dation -
Companies service Adjustments Continuing
Operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Revenue from
external
customers 116,521 5,323 23,491 145,335 643 1 145,979
FiT/ROC subsidy
revenue 66 - - 66 - - 66
Total revenue 116,587 5,323 23,491 145,401 643 1 146,045
------------ --------------- --------- ---------- -------- ------------------------- -----------
Expenditure
Cost of sales (103,339) (647) (14,851) (118,837) (154) (28) (119,019)
Gross Profit 13,248 4,676 8,640 26,564 489 (27) 27,026
Administrative
expenses (17,849) (1,448) (3,612) (22,103)
Depreciation
& amortisation (1,578) (134) (1) (1,713)
------------ --------------- --------- ---------- -------- ------------------------- -----------
Operating
profit/(loss) 7,137 (1,093) (3,640) 3,210
Net finance
costs (67) (2) (501) (570)
Share of loss - - - -
of associate
------------ --------------- --------- ---------- -------- ------------------------- -----------
Profit/(loss)
before tax 7,070 (1,095) (4,141) 1,834
Segments
assets &
liabilities
Segment assets 63,415 633 (6,201) 57,847
Segment
liabilities (47,826) 1,549 (1,281) 48,094
---------------- ------------ --------------- --------- ---------- -------- ------------------------- -----------
Net asset/
(liabilities) 15,589 (916) (4,920) 9,753
---------------- ------------ --------------- --------- ---------- -------- ------------------------- -----------
Additions
to non-current
assets 1,746 3 - 1,749
All turnover arose within the United Kingdom.
4. Finance Income and Finance Costs
Finance income: 2022 2021
GBP'000 GBP'000
Unaudited
Bank and other interest receivables 17 14
Preference share dividends 187 -
Discount on purchase of preference shares 429 -
633 14
========== ========
Finance costs: 2022 2021
GBP000 GBP000
Unaudited
On bank loans and overdrafts - 3
On corporate bond 237 485
Other interest payable 70 27
Lease interest payable 44 69
351 584
========== =======
5. Earnings / (loss) per Ordinary Share
Basic
Basic earnings per share is calculated by dividing the profit
attributable to owners of the Company by the weighted average
number of ordinary shares during the year, after excluding 79,924
(2021: 250,880) shares held by Clarke Willmott Trust Corporation
Limited in trust for the Good Energy Group Employee Benefit
Trust.
2022 2021
Unaudited
Profit/ (Loss) attributable to owners of the Company
(GBP'000) 9,816 (3,389)
Basic weighted average number of ordinary shares
(000's) 16,440 16,399
---------- --------
Basic earnings per share 59.7p (20.7p)
Continuing operations 2022 2021
Unaudited
Profit attributable to owners of the Company (GBP'000) 8,366 2,157
Basic weighted average number of ordinary shares
(000's) 16,440 16,399
---------- -------
Basic earnings per share 50.9p 13.2p
Diluted
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.
Where the vesting of these awards is contingent on satisfying a
service or performance condition, the number of potentially
dilutive ordinary shares is calculated based on the status of the
condition at the end of the period.
Potentially dilutive ordinary shares are dilutive only when the
average market price of 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 during
the year was 242p (2021: 269p).
5. Earnings per Ordinary Share (continued)
The dilutive effect of share-based incentives was 10,497 shares
(2021: 145,752 shares). The dilutive effect of share-based
incentives for continuing operations was 10,497 shares (2021:
145,752 shares).
2022 2021
Unaudited
Profit/ (Loss) attributable to owners of the Company
(GBP'000) 9,816 (3,389)
Basic weighted average number of ordinary shares
(000's) 16,451 16,544
---------- --------
Diluted earnings per share 59.7p (20.7p)
Diluted (continuing operations) 2022 2021
Unaudited
Profit attributable to owners of the Company (GBP'000) 8,366 2,157
Weighted average number of diluted ordinary shares
(000's) 16,451 16,544
---------- -------
Diluted earnings per share 50.9p 13.0p
6. Borrowings
2022 2021
GBP'000 GBP'000
Current Unaudited
Bank and other borrowings - 1,007
Bond 10 557
Lease liabilities 284 555
---------- --------
Total 294 2,119
---------- --------
2022 2021
GBP'000 GBP'000
Unaudited
Non-current
Bond 4,921 4,749
Lease liabilities 6 317
---------- --------
Total 4,927 5,066
---------- --------
The current portion of the bond repayment represents the
interest accrued and the amount of principal repayments requested
prior to the end of the year. The latest redemption request
deadline was in December 2022, for repayment of the remaining bond
in June 2023.
The bank and other borrowings are made of interest accrued and
amount of principal repayments under a Revolving Credit
Facility.
7. Cash Generated from Operations
For the year ended 31 December 2022
2022 2022
GBP'000 GBP'000
Unaudited
Profit before tax from continuing operations 7,629 1,834
Loss before tax from discontinued operations 858 (6,752)
---------- ---------
Profit/ (Loss) before tax 8,487 (4,918)
Adjustments for:
Depreciation 624 4,014
Amortisation 951 1,133
Revaluation of generation site - 1,324
Loss on asset disposals & writedowns - 182
Share options exercised (232) -
Gain arising on loss of control of subsidiary (6,884) -
Gain on sale of assets held for sale (776) -
Share based payments 198 -
Share of loss of associates 712 -
Other Finance (income)/costs - net (281) 2,257
Changes in working capital (excluding the effects
of acquisition and exchange differences on consolidation):
Inventories (1,509) 5,582
Trade and other receivables (20,642) (10,098)
Trade and other payables 25,115 4,424
---------- ---------
Cash generated from operations 5,763 3,900
========== =========
9. Subsequent Events
A final dividend of 2.0p per share (2021: 1.80p) was proposed on
23 March 2023, subject to shareholder approval at the Group's
AGM.
[i] Based on growth market modelling carried out by Good Energy
using market research conducted by Hall & Partners in 2022
[ii] Ofgem wholesale market indicators
https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators
[iii] MCS data for 2022
https://solarenergyuk.org/news/rooftop-solar-power-installations-double-in-a-year/
[iv] MCS data for 2022
https://solarenergyuk.org/news/rooftop-solar-power-installations-double-in-a-year/
[v] Energy Security Bill factsheet: Low carbon heat scheme
https://www.gov.uk/government/publications/energy-security-bill-factsheets/energy-security-bill-factsheet-low-carbon-heat-scheme
[vi] SMMT statistics, outlined by Zap-Map:
https://www.zap-map.com/ev-market-statistics/
[vii] 4 million customers on prepayment meter reported by Ofgem
in 2020, with increases reported since
https://www.ofgem.gov.uk/publications/more-help-prepayment-customers-and-those-struggling-bills
[viii] Based on Acuity Knowledge Partners research conducted for
Good Energy combined with government targets - 9.9% CAGR based on
current volume installed today, vs requirement by 2030
[ix] MCS data, reported by Current+
https://www.current-news.co.uk/mcs-announces-2022-as-record-year-for-certified-heat-pump-installations/
[x] Calculated using MCS data
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END
FR KZGZFRNZGFZM
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March 28, 2023 02:00 ET (06:00 GMT)
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