TIDMGOOD
RNS Number : 8267M
Good Energy Group PLC
19 September 2023
19 September 2023
Good Energy Group PLC
("Good Energy" or the "Company")
Un-audited interim results for the six months ended 30 June
2023
Strong financial performance and delivery of 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 2023.
Financial highlights
-- Revenue increased 45.6% to GBP156.1m (H1 2022: GBP107.6m)
driven by rising wholesale costs leading to price rises throughout
the year.
-- Gross profit increased 168% to GBP32.7m (H1 2022: GBP12.2m)
with gross profit margin of 20.9% (H1 2022: 11.4%). 683
-- Gross profit increased due to a strong H1 2023 performance
and cost advantages from our power purchase agreements. However, we
anticipate a one-off loss in H2 2023 due to lagging commodity costs
and tariff reductions.
-- Operating profit of GBP14.1m (H1 2022: -GBP0.5m loss). Some
of this is expected to unwind in H2 given the falling commodity
cost environment since late last year.
-- Zapmap reported a loss of GBP1.1m for our 49.9% shareholding.
-- Reported profit after tax for the period of GBP12.0m (H1 2022: GBP0.3m).
-- Reported earnings per share of 72.0p (H1 2022: 7.4p).
-- Cash and cash equivalents of GBP34.9m (FY2022: GBP24.5m)
reflecting strong profitability in H1 and continued focus on
working capital management.
-- Following a good operational performance in H1 2023 and
reflecting our confidence in the ongoing business, the Board has
declared an interim dividend for 2023 of 1.00p per ordinary share
(H1 2022: 0.75p).
Operational highlights
The first half of 2023 demonstrates significant evidence that
our transition has accelerated and is beginning to scale.
Achievements made during the period include:
-- Launched new services to help scale our energy services offering.
-- A new market leading smart export tariff for households with
solar panels live in March 2023.
-- Rolled out smart export and Solar Savings propositions to
40,000 customers. Targeting 75,000 by end of 2023.
-- Further propositions for businesses planned to launch in H2 2023.
-- Growing our solar and heat installation footprint through two acquisitions of installers.
-- Acquisition of WessexECO Energy in June 2023, an established
UK based solar installation business for GBP2.5 million.
-- Wessex completed 155 installs in 2022 and is on track for 200
installs in 2023. The new business plan looks to double capacity by
the end of 2024.
-- The heat pump business will see 2023 as a year of investment
as we look to build out the acquired Igloo platform and
installation capacity. We are targeting 100 installs in 2023, with
increasing uptake in recent months. Earnings growth is expected
from H2 2024.
-- The balance of 2023 and the first half of 2024 are a period
of planned investment. Elevated installation capacity is expected
to drive material earnings accretion from 2025, leveraging
corporate overheads to deliver effective customer acquisition and
cost to serve. Performance since the acquisitions has been in line
with expectations.
-- Wessex will continue to operate under its own brand, whilst
the heat pump business has been rebranded to Good Energy Works.
-- Zapmap growth provides a pathway of electric vehicle (EV)
drivers for energy services propositions.
-- Registered users increased 52% to 683k and 80% of all EV
drivers registered on the platform.
-- Monthly active users increased to record number at 285k.
-- Subscriptions, data insights and B2B API tools continue to
drive growth ahead of planned fundraise.
-- Continued delivery of energy services enabling functions.
-- Smart meter rollout progressing, with 44,000 installed to date.
-- Maintaining excellent service quality with 4.7* Trustpilot
rating achieved in supply and installations.
Outlook highlights
-- Good Energy has successfully evolved into an energy services
business and much of this has been achieved over the past six
months.
-- We have acquired installation capability and launched new
services across the solar, heat pump and EV market during the
period and are rolling these out to our established customer
base.
-- Our established customer base is showing strong interest in
these new services, creating a strong pipeline for the future.
-- Impressive solar and EV market growth continues, and we are
well placed to capitalise on this.
-- We will continue to capitalise on this market growth by
building our installation capabilities and increasing our presence
across the UK. We continue to invest across energy services through
a clear buy and build strategy.
-- Our FY23 expectations remain unchanged, with a strong H1
performance partly offset with an expected one-off loss in H2 due
to lagging commodity costs and tariff reductions
-- The strong cash generated during the period positions us well
to meet our working capital requirements and to invest for further
growth.
Nigel Pocklington, Chief Executive Officer of Good Energy,
said:
"Good Energy has hit an inflection point in the past six months.
The company is now more than an energy supplier, it's a heat pump
and solar installer with over 40,000 customers live on smart export
tariffs. Combined with continued strong growth in Zapmap, we are
delivering our strategy and well on our way to achieving our
mission of helping one million homes and businesses cut their
carbon.
"We have made great strides through acquisitions to offer new
hardware services and launching new services whilst delivering a
positive performance for the first half of the year as we continue
to navigate a volatile energy market. Our robust cash position
serves dual purposes: enabling strategic growth initiatives and
providing a buffer against market uncertainties. Whilst we expect
some of the energy trading factors which have bolstered profit to
unwind through the remainder of the year, we are in a very positive
financial position for Good Energy to continue to grow and
capitalise on its untapped potential.
"With its legacy as a truly renewable supplier serving one of
the UK's largest solar microgenerator customer bases, Good Energy
is uniquely positioned to continue to launch and grow services that
make it easy for customers to go green. Our goal is to be a
one-stop solution for green-minded customers, offering a suite of
products that help them reduce carbon, save money, and stay with us
longer. By focusing on multiple product areas that function
harmoniously, we aim to lower churn rates, cut acquisition costs,
cross-sell services and boost the overall lifetime value of our
growing number of customers."
A briefing for Analysts will be held at 9:00am today. Analysts
wishing to attend the presentation either in person or virtually
should register their interest by emailing
investor.relations@goodenergy.co.uk or telephoning 0124 976
5573.
An investor presentation and Q&A will be held today at
11:00am. Investors can sign up to Investor Meet Company for free
and add to meet Good Energy via:
https://www.investormeetcompany.com/good-energy-group-plc/register-investor
.
A video overview of the results from the Chief Executive
Officer, Nigel Pocklington, is available to watch here
https://www.fmp-tv.co.uk/2023/09/15/good-energy-h1-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)
Henry Reast / James Rudd / Maria Gomez de Olea Tel: +44 (0) 20 7597 5970
Canaccord Genuity Limited (Joint Broker)
Henry Fitzgerald - O'Connor / Harry Rees Tel: +44 (0) 20 7523 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 over 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.
CEO's review
Overview
Good Energy's direction is crystal clear: we're on a journey to
become the UK's leading green energy services company in a future
where energy is decentralised, digitised, and green. This vision
gained urgency in 2022, as the flaws of our current fossil
fuel-based system became painfully obvious and in 2023 we have made
great strides delivering against this. As one of the UK's largest
administrators of the Feed-in-Tariff (FiT) serving a large
microgenerator customer base, we're already a major player in this
future grid. With a greater number of our customers generating
their own power than buying ours, we hold a c. 20% market share in
the UK's largest decentralised energy scheme, setting us up for a
transformative role in the energy landscape.
Strong financial performance and continuing to invest
The first six months of 2023 have seen Good Energy focus on
delivering against our exciting growth strategy in energy services.
We have continued the expansion of our energy services portfolio,
launched new services for customers and acquired a further solar
installation business, following the acquisition of a heat pump
installation business in December 2022. These businesses will help
to build out installation capacity in solar PV, storage and heat
pumps. We have launched new export tariffs, as well as trialled
innovative new solutions for our business customers.
Throughout the energy crisis over the past 18 to 24 months, our
energy supply business had remained robust despite the market
volatility surrounding us. With clear communication to customers,
we maintained and even built on the trust we have secured over
years - essential as we expand our green energy services business.
However, as the energy market has stabilised, wider macroeconomic
uncertainty has grown, with rising inflation rates demanding an
elevated interest rate environment. We are conscious of the impact
this could have on many of our customers and we continue to work
closely with them.
Earlier this year, we were 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 to supply almost 38,000 homes. This is
testament to the strong working relationship we have built with
Ørsted and speaks to the partnership approach we have.
We remain in robust financial health and have continued to
invest throughout the period, both organically in new product
launches and inorganically through our acquisitions. Our financial
performance in the first half of the year has been excellent, and
whilst we expect to see some of this unwind in the second half
given the falling commodity cost environment since late last year,
we foresee closing the year in a strong position. We have a strong
cash balance and are committed to investing to accelerate the
growth across our energy services offering.
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 2023 and reflecting
our confidence in the ongoing business, the Board has therefore
declared an interim dividend for 2023 of 1.00p per ordinary share.
This dividend will be paid on 27 October 2023 to shareholders on
the register at the close of business on 29 September 2023.
Outlook
Good Energy is now well on its way to becoming the UK's top
green energy services company. We're expanding solar services and
heat installations and eyeing further M&A to boost our
capabilities. Zapmap's Series B fundraise is on the horizon, which
will set the stage for its B2B and international growth. Our FY23
expectations remain unchanged, with a strong H1 performance partly
offset with an expected one-off loss in H2 due to lagging commodity
costs and tariff reductions.
Nigel Pocklington, CEO
Strategic update - our transition to a green energy services
company
Good Energy's purpose is to power a cleaner, greener world by
making it simple to generate, share, store, use and travel by clean
power. We work towards this purpose by supporting one million homes
and businesses cut carbon from their energy and transport use by
2025.
The first half of 2023 has been a critical period in which that
shift has truly begun to take place, as we have delivered new
services, underpinned by energy supply.
Clean energy services operate as a harmonious 'virtuous circle'.
For example for many customers, electric vehicles are the starting
point. According to Zapmap data, if you drive an EV, you're seven
times more likely to have solar panels installed than the national
average. And with our investment in Zapmap, the UK's leading EV
mapping platform, we're positioned to take advantage of this. To
build on this insight, our installation partner data shows that
over 80% of our solar installs now include a battery storage
system. Continuing the trend, historic MCS data shows that around
60% of new heat pump installations are in homes that already have
solar. We're launching smart tariffs and this Winter we will be
participating in the upcoming demand flexibility events with the
National Grid to make all of this as cost-effective and
carbon-friendly as possible. Helping our customers go green, cut
carbon and save money.
We see ourselves as not an energy supply firm that offers energy
services but as an energy services firm, of which energy supply is
just one part of what we can offer our customers. In 2023, we have
made good progress delivering against this strategy to date.
We have rolled out solar services and export tariffs for our
microgeneration customers, including launching smart export for our
Feed-in-Tariff customers and piloted Solar Savings (formerly Power
for Good) at a market leading 10p/kwh export rate. As Solar Savings
now comes out of its beta phase, we are bolstering the rates to
15p/kWh with an even more attractive 20p/kWh rate for customers who
install their solar PV with us through Wessex ECOEnergy. This
positions our export tariffs among the best rate on the market,
level with the highest per unit payments for flat rate tariffs
available.
We intend to launch a time of use tariff for electric vehicles
in the final quarter of 2023, to help EV drivers charge at cheaper
and greener times. We have developed our capability to install both
solar and heat pumps and are looking to double this by the end of
2024. We acquired Wessex Eco Energy in June to increase our solar
installation capability and expect to acquire further businesses to
help increase our installation capacity. We have supported Zapmap
on its journey as to launch new B2B API services, simplified and
grow its B2C subscription offering and built a strong data business
relied on across the industry. We are pleased with how we are
executing our vision.
We believe that this is both the future of energy and makes us a
better business in the long term. We're excited about the road
ahead, not just because we're targeting a GBP5 billion market that
could grow to GBP10 billion (company research and MCS data), but
because we're doing it in sectors like solar, heat pumps, and EVs
that offer fast growth, good margins, and low working capital
requirements. This positions us well for both short-term and
long-term returns, especially compared to the lower margin and more
working capital intense energy supply markets. Our research
indicated that our already engaged, green-minded customer base is
showing strong interest in these new services, reinforcing our role
in accelerating the transition to renewables. We're eager to share
updates in what promises to be another transformative year for Good
Energy.
By offering multiple harmonious cleaner energy products, we aim
to lower churn rates, cut acquisition costs, and boost customer
lifetime value. We are carving out a suite of services that can
allow our customers to become energy efficient in every aspect of
their lives.
A targeted energy supply offering
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. For generators who take both services, our
intention is to make it cheaper than a comparable standard supply
contract without generation. We want to incentivise people to go
green and save money.
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
progress with our smart meter roll out and now have nearly 44,000
installed to date. Earlier this year, we achieved a 5* Trust pilot
rating, making us one of the most trusted energy suppliers in the
country.
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. Where possible we are also
starting to offer smart export and solar installation propositions
to our business customers. We have recently launched innovative new
services for business customers to match their hourly energy use to
time-based renewable generation, giving them even greater
transparency on their carbon footprint.
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.
We believe it is important that we have the right type of
customers. Those individuals and businesses that support our
mission and are more likely to go on this journey with us.
Delivering a leading position in electric vehicles through
Zapmap
The electric vehicle market saw continued growth into 2023,
following impressive growth in recent years. Total EVs on the road
now totals almost 1.4m as of August 2023, with over 60% of these
being battery electric vehicles (Zapmap and SMMT data 2023). These
battery electric vehicles are Zapmap's core market.
The Battery EV market grew 60% to over 817,000 in the 12 months
to June 2023 and has a 2-year CAGR of 71% (June 2021 to June 2023).
Cumulatively, Zapmap now has over 1.2 million downloads of the app
and over 683,000 registered users, up over 50% in 2023 and a 2 year
CAGR of 70%. It continues to retain its position as the market
leader in the high growth electric vehicle market, with registered
user penetration at 80% of all electric vehicle drivers.
Zapmap: Building scale and recurring revenue
Zapmap has made good progress against its business plan
throughout 2023, and since their GBP9m series A fundraise in August
2022. Zapmap has seen both registered users (683k +51%) and monthly
active users (285k +16%) rise, and they are on track to more than
double revenue in 2023, and close Q4 2023 on a GBP2m annual
recurring revenue run rate.
Alongside a refreshed brand and website, subscriptions were
simplified and relaunched earlier in the year. This allows drivers
to access everything needed for simple EV charging, including the
location and live availability of chargers on the move using
Android Auto or Apple CarPlay. Zapmap plus and premium were
combined to one premium offer at a lower monthly price of GBP2.99 /
month, or GBP29.99 / year. This led to material increases in
subscriber numbers.
Zapmap Spark was launched to enable third party digital
platforms with EV charging search, plan and payment services and
has a strong pipeline of commercial customers. The data and
insights business has expanded significantly with new products and
channel revenues driving strong performance in 2023.
In 2024 and beyond, Zapmap will focus on four key areas. First,
the consumer app aims to simplify charging solutions in the UK,
with plans to expand internationally, including the EU and North
America. Second, B2B services will offer comprehensive charging
data and insights. Third, Zapmap Spark plans to scale through
API-enabled tech solutions. Finally, a Series B funding round in
2024 will enable further growth and scaling of these services into
new markets. We expect to participate in this round to support
Zapmap's growth plan. Our collaboration with Zapmap will also
extend to developing energy services products, aimed at helping the
UK's EV drivers cut carbon and save money.
Solar and generation
Impressive solar market growth continues whilst heat market is
slower
The UK solar market saw near record levels of growth through
2022 as energy prices remained high. Installs increased over 125%
to over 130,000 rising to the near the record highs of 2015. In
2023 H1 sales started strongly, with sales in the first six months
rising to over 90k installs and forecast to increase over 18% year
on year (Company research and MCS database 2023).
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. This requires a 2.9% annual growth in install
levels to c. 167k per year, with almost that number expected to be
achieved in 2023. 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.
New services for generators
In early 2023 we launched a beta market leading smart export
tariff for a limited number of households with solar panels. 'Solar
Savings' (formerly Power for Good) pays a 10p per kWh variable
export tariff rate, materially better than the standard rates
offered under the Government's Smart Export Guarantee. Solar
Savings is Good Energy's first tariff available to generators that
installed their solar panels after the Feed-in-Tariff scheme closed
in 2019.
It is now moving out of beta, with enhanced rates of 15p/kWh and
20p/kWh for customers who install their solar through Good Energy,
positioning Solar Savings amongst the best flat rate export tariffs
available on the market. We are targeting rolling this out to c.
5,000 customers by the end of 2023.
This is in addition to our new smart export services for
existing FiT customers, allowing them to receive an export payment
based on the actual amount of power that they provide to the grid,
rather than the volume they are deemed to have exported. Our data
shows that at times many customers have exported around 20% more
than the deemed amount, meaning that smart export provides an
opportunity for these customers to earn more. With the enhanced
rates offered by Solar Savings enabling them to earn further
still.
As the largest voluntary FiT administrator with over 180,000
customers for whom we process hundreds of millions of pounds in
payments, this is a significant shift. And we have already rolled
the service out to over 40,000 customers, targeting more than
70,000 by the end of the year.
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. Customers
still get paid for what they generate, but now also get paid for
everything that they export, using readings from their smart
meter.
There are significant commercial benefits for Good Energy in
this shift too, providing substantial tradeable power and
efficiencies through lower costs to serve. We expect this to start
providing a very tangible positive financial impact in 2024.
Scaling installation services
Installation of solar panels, battery storage and heat pumps are
a key step on the path to decarbonisation. They are a building
block of our energy services strategy and provide access to high
growth, high margin and low working capital markets. In December
2022, we acquired Igloo Works a heat pump installer and in June
2023 we acquired Wessex Eco Energy, a solar installer based in the
South West of the UK.
Wessex completed 155 installs in 2022 and is on track for 200
installs in 2023. The new business plan looks to double capacity by
the end of 2024.
The heat pump business will see 2023 as a year of investment as
we look to build out the acquired Igloo platform and installation
capacity. We are targeting 100 installs in 2023, with increasing
uptake in recent months. Earnings growth is expected from H2
2024.
The balance of 2023 and the first half of 2024 are a period of
planned investment. Elevated installation capacity is expected to
drive material earnings accretion from 2025, leveraging corporate
overheads to deliver effective customer acquisition and cost to
serve. Performance since the acquisitions has been in line with
expectations.
Coupled with installations, we have been working with Wessex to
provide improved export tariffs for Customers to increase their
overall savings.
Our ambition is to continue to increase our installation
capacity, through both organic and inorganic growth in the near
term. The solar installation market remains highly fragmented with
over 2,000 registered installers and the vast majority installing
less than 200 installs per year. Our growth strategy is focused on
targeting specific regions to develop a fully national capacity in
time.
OPERATING REVIEW
Wholesale energy market conditions
Wholesale Power & Gas prices
Over the past 12 months we have seen a period of decline from
the peak pricing pressures seen in H2 2022. Since late August 2022,
when the day ahead gas prices hit at GBP6.44/therm, we have seen a
significant decline in wholesale costs. By the end of 2022 gas
prices had fallen to GBP1.75/therm and have averaged
c.GBP0.90/therm since late April 2023. However significant
unpredictability is still present, and whilst the trend has been
downwards there have still been periods of significant volatility.
This general reduction in wholesale costs takes time to flow into
lower tariffs. Hedging agreements, fixed tariff durations, and an
OFGEM managed price cap window all impact when wholesale cost
benefits are seen for end consumers.
Weather conditions seen in 2023 continue to reflect what is a
warming and uncertain climate future. Worldwide temperature records
have been broken, and the UK is no exception to this. Provisionally
H1 2023 saw a mean UK temperature of 8.5 degrees, which is highest
it has been since 2007. These warmer, milder conditions, coupled
with the higher tariffs facing consumers in H1 2023 has seen
reduction in average usage by consumers. Good Energy's customers
are no exception to this with gas usage down 13% to 227 GWh in H1
2023 (H1 2022 259GWh). Electricity supplied volumes are also
reduced year-on year by 28% to 257 GWh (2022 356), but this is down
to a combination of factors including a strategic shift within the
business supply sector, alongside lower average domestic
consumption.
Our renewable supply business
Cash collections
Cash collections in H1 2023 remained strong with customer bills
and payments being augmented by continued Government support scheme
payments through the winter and spring period.
There is a continued focus on good quality business partners to
ensure the supply of energy comes hand in hand with good
collections performance - the business is very much focused on
quality over quantity when it comes to customer acquisition and
renewal.
Whilst wholesale costs are showing signs of stabilisation,
volatility still exists, and cash management is key to managing
well through this environment. The economic environment remains
challenging for consumers and businesses alike, and whilst certain
customers have seen debt levels increase, total live-customer aged
debt has remained at a similar level to the end of 2022, with an
increase in domestic customer debt offset by a corresponding
reduction in business debt. We remain particularly vigilant to
ongoing trends across the industry as we approach the winter.
Business
Total business supply customers fell by 12.1% to 7.0k (8.0k).
This reflects the company's focus on good quality business
partners).
Domestic
We remain committed to ensuring that we offer fair priced,
transparent 100% renewable electricity proposition. High but
stabilising energy prices have the potential to open up the
domestic supply market to increased switching in the future. The
business will continue to counter this by being very clear on its
renewable credentials alongside its strategic energy services
offering.
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 3.6% to 184k versus
2022.
CFO REVIEW
Overview
Financial performance
Profit and loss
Revenue increased 45% in the period to GBP156.1m (2022:
GBP107.6m) driven by higher tariffs which now reflected the full
effect of the steep rise in wholesale costs in 2022 caused by
worldwide volatility in wholesale power and gas costs. Cost of
sales increased by 29% to GBP122.8m (2022 GBP95.4m) driven largely
by geopolitical impacts on wholesale costs.
Reported gross profit increased 168% to GBP32.7m (2022:
GBP12.2m). The increase reflects a recovery from a loss making H1
2022 as well as a strong H1 2023 performance. Our electricity power
purchase agreements(PPAs), which are typically contracted over a
12-18 month period, provided a cost advantage over the H1 period,
although this will reverse in H2 as commodity costs have fallen
steadily since Sept-22 and tariffs have significantly reduced from
Apr-23 onwards following those wholesale cost reductions. We had
planned and are managing the financial outcome of the year as a
whole, recognising that H2 2023 will be a one-off loss making
period as those commodity input costs lag the sales tariff
reductions that we have continued to provide for our variable
tariff Domestic and SME supply customers since the start of
July.
Total administration costs increased 47% to GBP18.6m. This
increase relates to the strategic expansion into Energy Services;
additional debt provisioning reflecting the higher revenue levels;
and regulatory costs.
The business reported net finance income of GBP0.1m as a result
of the higher cash balance, whilst gross debt remained at
GBP5m.
Reported profit before tax of GBP13.1m. Adding back GBP1.7m of
depreciation, amortisation, finance income & share in loss of
associate gives GBP14.9m EBITDA for the period.
The tax liability for H1 2023 was GBP1.2m (2022 credit of
GBP1.0m).
The reported profit for the period was GBP12.0m (2022:
GBP0.8m).
*A profit bridge slide has been included in the Investor
presentation, which is available on the Company's website. (
https://www.goodenergy.co.uk/investors/results-presentations/ )
Cash flow and cash generation
The profitability seen in H1 2023 has driven strong cash
generation alongside it.
There was a net increase in cash of GBP10.4m and this is after
an initial investment of GBP2.5m for the purchase of the Wessex
EcoEnergy Business.
Cash and cash equivalents at the end of June 2023 were GBP34.9m,
with a further GBP8.4m held in restricted deposit accounts; GBP3.0m
of which relates to Government support scheme monies held
separately pending the full scheme reconciliations being
concluded.
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 over the last 2 years.
The remaining Good Energy Bonds II outstanding (GBP4.9m) is held
within short term liabilities. This is due to an annual redemption
request window for bondholders in December with repayment in June
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 72.0p (HY 2022
7.4p).
Dividend
The Board has declared an interim dividend for H1 2023 of 1.00p
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)
ECL charge for H1 2023 was GBP3.7m, this is an increase of
GBP2.2m (2022: GBP1.5m).
The main impact in year, is significantly elevated revenue from
the higher tariffs resulting in a larger H1 provision level. H2
2023 ECL charges are expected to be lower reflecting reductions in
tariffs for this period.
Wessex EcoEnergy
On 21 June 2023, Good Energy acquired the entire share capital
of Wessex EcoEnergy Limited for an initial consideration of
GBP2.5m.
Consolidated Statement of profit or loss (Un-audited)
For the 6 months ended 30 June 2023
Notes Unaudited Unaudited Audited
6 months 6 months 12 months
to 30/06/2023 to 30/06/2022 to 31/12/2022
GBP000's GBP000's GBP000's
REVENUE 156,114 107,600 248,682
Cost of Sales (123,457) (95,379) (218,768)
--------------- --------------- ---------------
GROSS PROFIT 32,657 12,221 29,914
Administration Expenses (18,574) (12,725) (28,109)
Other operating income 47 - 66
--------------- --------------- ---------------
OPERATING PROFIT 14,130 (504) 1,871
Finance Income 299 1 633
Finance Costs (169) (247) (351)
Gain on loss of control of
subsidiary - - 7,767
Share of loss of associate (1,139) - (712)
--------------- --------------- ---------------
PROFIT BEFORE TAX 13,121 (750) 9,208
Taxation (1,156) 1,044 (637)
--------------- --------------- ---------------
PROFIT FOR THE PERIOD 11,965 294 8,571
Profit from discontinued
operations before tax - 82 64
Tax on discontinued operations - 440 -
--------------- --------------- ---------------
Profit for the period 11,965 816 8,635
Attributable to:
Equity holders of the
parent 11,965 1,217 9,227
Non-controlling interest - (401) (592)
Earnings per Share
* Basic 10 72.0p 7.4p 55.7p
* Diluted 10 68.6p 7.4p 55.6p
* Basic (continuing operations) 72.0p 4.2p 51.7p
* Diluted (continuing operations) 68.6p 4.2p 51.7p
Consolidated Statement of profit or loss (Un-audited)
For the 6 months ended 30 June 2023
Notes Unaudited Unaudited Audited
6 months 6 months 12 months
to 30/06/2023 to 30/06/2022 to 31/12/2022
GBP000's GBP000's GBP000's
Profit for the period 11,965 816 8,635
--------------- --------------- ---------------
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD ATTRIBUTABLE
TO OWNERS OF THE PARENT
COMPANY 11,965 816 8,635
Attributable to: Equity
holders of the parent 11,965 1,217 9,227
Non-controlling interest - (401) (592)
Consolidated Statement of Financial Position (Un-audited)
As at 30 June 2023
Notes Unaudited Unaudited Audited
6 months 6 months 12 months
to 30/06/2023 to 30/06/2022 to 31/12/2022
GBP000's GBP000's GBP000's
ASSETS
Non-current assets
Property, plant and equipment 306 171 117
Right-of-use assets 46 850 324
Intangible assets 12 5,517 4,233 3,503
Deferred tax asset 87 1,280 162
Equity investments in associate 11,440 - 12,578
--------------- --------------- ---------------
Total non-current assets 17,396 6,534 16,684
Current assets
Inventories 20,252 17,893 9,212
Trade and other receivables 6 49,482 38,262 57,497
Restricted deposit accounts 7 8,489 2,816 8,462
Cash and cash equivalents 8 34,926 21,690 24,487
--------------- --------------- ---------------
Total current assets 113,149 80,661 99,658
--------------- --------------- ---------------
TOTAL ASSETS 130,545 87,195 116,342
--------------- --------------- ---------------
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 844 842 844
Share premium account 12,915 12,790 12,915
EBT shares (7) (444) (7)
Retained earnings 36,863 17,281 25,234
--------------- --------------- ---------------
Total equity attributable
to members of the parent
company 50,615 30,469 38,986
Non-controlling Interest - (726) -
--------------- --------------- ---------------
Total equity 50,635 29,743 38,986
Consolidated Statement of Financial Position (Un-audited)
As at 30 June 2023
Non-current liabilities
Borrowings 9 89 276 4,927
-------- ------- --------
Total non-current liabilities 89 276 4,927
Current liabilities
Borrowings 9 5,169 5,436 294
Trade and other payables 73,517 51,683 72,135
Current tax payable 1,155 59 -
-------- ------- --------
Total current liabilities 79,841 57,176 72,429
-------- ------- --------
Total liabilities 79,930 57,452 77,356
-------- ------- --------
TOTAL EQUITY AND LIABILITIES 130,545 87,195 116,342
-------- ------- --------
Consolidated Statement of Changes in Equity (Un-audited)
For the 6 months ended 30 June 2023
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 2022 840 12,790 (444) 4,773 11,693 (325) 29,327
--------- --------- ---------- ---------- ------------ ---------------- ---------
Profit for the year - - - 816 - (401) 415
Other comprehensive income - - - - - - -
for the year
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total comprehensive income
for the year - - - 816 - (401) 415
Transfer of revaluation
to retained earnings - - - 11,693 (11,693) - -
Dividend paid - - - (187) - - (187)
Total contributions by
and distributions to
owners
of the parent, recognised
directly in equity - - - 11,506 (11,693) - (187)
--------- --------- ---------- ---------- ------------ ---------------- ---------
At 1 July 2022 840 12,790 (444) 17,095 - (726) 29,555
--------- --------- ---------- ---------- ------------ ---------------- ---------
Profit / (Loss) for the
period - - - 8,411 - (191) 8,220
Other comprehensive income - - - - - - -
for the period
--------- --------- ---------- ---------- ------------ ---------------- ---------
Total comprehensive income
for the period - - - 8,411 - (191) 8,220
Exercise of options 1 - 437 (232) - - 206
Share based payments - - - 198 - - 198
Scrip dividends issued 3 125 - (128) - - -
Dividend paid - - - (110) - - (110)
Disposal of Subsidiary - - - - - 917 917
Total contributions by
and distributions to
owners
of the parent, recognised
directly in equity 4 125 437 (272) - 917 1,211
--------- --------- ---------- ---------- ------------ ---------------- ---------
At 31 December 2022 844 12,915 (7) 25,234 - - 38,986
--------- --------- ---------- ---------- ------------ ---------------- ---------
Consolidated Statement of Changes in Equity (Un-audited)
For the 6 months ended 30 June 2023
At 1 January 2023 844 12,915 (7) 25,234 - - 38,986
---- ------- ---- ------- -------
Profit/(Loss) for the period 11,965 - - 11,965
Other comprehensive income - - - - - - -
for the period
---- ------- ---- ------- -------
Total comprehensive income
for the period - - - 11,965 - - 11,965
Dividends declared - - - (336) - - (336)
Total contributions by and
distributions to owners
of the parent, recognised
directly in equity - - - (336) - - (336)
---- ------- ---- ------- -------
At 30 June 2023 844 12,915 (7) 36,863 - - 50,615
Consolidated Statement of Cash Flows (Un-audited)
For the 6 months ended 30 June 2023
Notes Un-audited Un-audited Audited
30/06/2023 30/06/2022 31/12/2022
GBP000's GBP000's GBP000's
Cash flows from operating
activities
Cash inflow from continuing
operations 13,033 (2,173) 5,180
Finance income 65 (1) 17
Finance cost (145) (348) (70)
Net cash flows from operating
activities 11 12,953 (2,522) 5,127
Cash flows from investing
activities
Purchase of property, plant
and equipment (61) - (9)
Purchase of intangible fixed
assets (3) (342) (125)
Deposit into restricted accounts - (401) -
Investment in associate - - (3,494)
Proceeds from disposal of held
for sale assets - 19,575 20,351
Acquisition of subsidiary,
net of cash acquired (2,163) - (1,725)
Net cash flows used in investing
activities (2,227) 18,832 14,998
Cash flows from financing
activities
Payments of dividends - - (297)
Repayment of borrowings (30) (1,000) (1,619)
Capital repayment of leases (257) (321) (626)
Proceeds from issue of shares - - -
Proceeds from sale of share
options - 2 205
------------ ------------ ------------
Net cash flows from financing
activities (287) (1,319) (2,337)
Net increase/(decrease) in
cash and cash equivalents 10,439 14,991 17,788
Cash and cash equivalents at
beginning of period 24,487 6,699 6,699
Cash and cash equivalents
at end of period 34,926 21,690 24,487
Notes to the Interim Accounts
For the 6 months ended 30 June 2023
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 18 September 2023. 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 2022 were approved by the
Board of Directors on 5 May 2023 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 2022 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 2022, as described in those Annual Financial
Statements.
The Interim Financial Statements have not been audited.
2. Going concern basis
The Group has seen a strong start to 2023 reflecting the benefit
from when power purchase agreements were secured versus market
tariffs. The Group has performed a going concern review, going out
until the mid-2025 considering both an internal base case, and
various externally provided scenarios. The scenarios were provided
by Ofgem in mid-2023 as part of their ongoing check 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.
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 2022.
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 2022.
5. Segmental analysis
H1 2023 Electricity FIT Gas Supply Total Supply Energy Holding Total
Supply Administration Companies as a service Company/
Consolidated
Adjustments
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------ --------------- ----------- ------------- -------------- -------------- ----------
Revenue 122,092 2,730 30,890 155,712 402 - 156,114
Cost of sales (92,003) (93) (30,797) (122,893) (564) - (123,457)
Gross
profit/(loss) 30,089 2,637 93 32,819 (162) - 32,657
Gross margin 25% 97% 0% 21% -40% 21%
Admin costs (16,102) (1,500) (925) (18,527)
------------- -------------- -------------- ----------
Operating
profit/(loss) 16,717 (1,662) (925) 14,130
Net finance
costs - (53) 183 130
Share of
loss of
associate - (1,139) - (1,139)
------------- -------------- -------------- ----------
Profit/(loss)
before tax 16,717 (2,854) (742) 13,121
H1 2022 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 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)
6. Trade Receivables
Unaudited Audited
As at 30/06/2023 As at 31/12/2022
GBP000s GBP000s
Gross trade receivables 63,919 69,007
Provision for impairment/non-payment
of trade receivables (17,203) (15,428)
------------------ ------------------
Net trade receivables 46,716 53,579
Prepayments and other taxation 2,766 3,918
------------------ ------------------
Total 49,482 57,497
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 30/06/2023 As at 31/12/2022
GBP000's GBP000's
Balance at 1 January 15,428 11,792
Increase in allowance for impairment/non-payment 1,775 3,636
Balance at 30 June 2023 / 31 December
2022 17,203 15,428
------------------ ------------------
Days past due
Unaudited <30 30-60 61-90 >91
As at 30/06/2023 Current days days days days Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Expected credit loss
rate 9.7% 14.0% 26.0% 41.6% 86.9%
Estimated total gross
carrying amount at
default 27,162 4,271 1,970 1,564 14,755 49,722
--------- --------- --------- --------- --------- ---------
Expected credit loss 2,622 600 513 650 12,818 17,203
--------- --------- --------- --------- --------- ---------
Days past due
Audited Current <30 30-60 61-90 >91 Total
As at 31/12/2022 days days days days
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Expected credit loss
rate 6.4% 15.0% 27.1% 39.1% 87.9%
Estimated total gross
carrying amount at
default 41,471 3,041 1,805 1,492 12,780 60,589
--------- --------- --------- --------- --------- ---------
Expected credit loss 2,662 456 490 584 11,236 15,428
--------- --------- --------- --------- --------- ---------
7. Restricted deposit accounts
Unaudited Audited
As at 30/06/2023 As at 31/12/2022
GBP000s GBP000s
Restricted deposit accounts 8,489 8,462
------------------ ------------------
Total 8,489 8,462
Restricted deposit accounts include an amount of GBP2,984,085
(December 2022: GBP4,533,381) that relates to Government support
scheme monies received for application to business and domestic
customer accounts. At the end of each scheme all unallocated funds
are due to be returned to the Government.
8. Cash and cash equivalents
Unaudited Audited
As at 30/06/2023 As at 31/12/2022
GBP000s GBP000s
Cash at bank and in hand 34,545 24,063
Security deposits 381 424
------------------ ------------------
Total 34,926 24,487
Included within cash at bank and in hand for both the Parent
Company and the Group is GBP6,911 (December 2022: GBP592,893) in
respect of monies held by the Good Energy Employee Benefit
Trust.
9. Borrowings
Unaudited Audited
As at 30/06/2023 As at 31/12/2022
Current: GBP000s GBP000s
Bond 4,926 10
Bank loans 178 -
Lease liabilities 65 284
------------------- ------------------ ------------------
Total 5,169 294
Unaudited Audited
As at 30/06/2023 As at 31/12/2022
Non-current: GBP000s GBP000s
Bond - 4,921
Bank Loans 19 -
Lease liabilities 70 6
------------------- ------------------ ------------------
Total 89 4,927
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 30/06/2023 As at 30/06/2023 As at 31/12/2022 As at 31/12/2022
Fair value Carrying Fair value Carrying
GBP000s value GBP000s value
GBP000s GBP000s
Corporate bond 4,847 4,456 4,820 4,486
10. Earnings per share
The calculation of basic earnings per share at 30 June 2023 was
based on a weighted average number of ordinary shares outstanding
for the six months to 30 June 2023 of 16,609,219 (for the six
months to 30 June 2022: 16,528,000 and for the full year 2022:
16,574,697) 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 2023 was 187p (for the six months to 30 June
2022: 258p and for the full year 2022: 242p). The dilutive effect
of share-based incentives was 839 shares (for the six months to 30
June 2022: 208,252 shares and for the full year 2022: 10,497).
11. Net cash flows from operating activities
The operating cashflow for the six months to 30 June 2023 is an
inflow of GBP13m (for the six months to 30 June 2022: GBP2.5m
outflow and for the full year 2022: GBP5.1m inflow). The difference
in the cashflow between the half year 2023 and its comparative for
the same period is primarily due to timing of working capital
related items.
12. Business Combinations
On 21 June 2023, Good Energy Group PLC acquired the entire share
capital of Wessex EcoEnergy Limited, an established UK based solar
installation business. Building on its acquisition of Igloo Works
in December 2022, the acquisition represents a further milestone in
delivering on Good Energy's strategy to expand its capability in
decentralised energy services.
Unaudited Unaudited Audited Audited
As at 30/06/2023 As at 30/06/2023 As at 31/12/2022 As at 31/12/2022
Fair value Carrying Fair value Carrying
GBP000s value GBP000s value
GBP000s GBP000s
Property, plant and equipment 171 171 23 23
Inventories 362 362 20 20
Receivables 243 243 125 125
Cash 353 353 34 34
Payables (1,010) (1,010) (194) (194)
------------------------------- ------------------ ------------------ ------------------ ------------------
Total identifiable net
assets 119 119 8 8
Unaudited Audited
As at 30/06/2023 As at 31/12/2022
GBP000s GBP000s
Goodwill 2,401 1,805
Consideration 2,520 1,813
The goodwill recognised in respect of the acquisition of Wessex
EcoEnergy at 30th June 2023 is provisional, subject to a fair value
assessment of identifiable intangible assets separable from
goodwill in accordance with the provisions of IFRS3: Business
Combinations.
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END
IR QVLFFXKLEBBB
(END) Dow Jones Newswires
September 19, 2023 02:01 ET (06:01 GMT)
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