TIDMUTW
RNS Number : 6359Z
Utilitywise plc
04 September 2018
4 September 2018
Utilitywise plc
("Utilitywise" or the "Company" or the "Group")
Trading update
Utilitywise, a leading independent utility cost management
consultancy, today provides an update on trading for the financial
year ended 31 July 2018 ("FY18").
Enterprise division
As previously announced in the FY18 interim results, the order
book delivery of the Enterprise division has been impacted by a
number of internal and external factors, including inter alia:
-- Further strengthening of internal controls;
-- Commercial decisions taken by management to improve the quality of business:
o Discontinuance of trading with uneconomic sub-brokers in its
partner channel;
o Discontinuance of the practice of seeking significant
additional same supplier renewal contracts in the final month of
each six-month accounting period, with focus changed to maintenance
of a more "normalised" level;
-- Commencement of a new inbound channel, in line with the Group's "Strategy for Growth";
-- The significant adverse impact on the business during the
second half of FY18, as a result of the delay in announcement of
the Group's results for the year ended 31 July 2017 ("FY17") and
temporary suspension of the Company's shares from trading. The
operational and commercial impact was greater and more far-reaching
than the Board had expected and, as a result:
o Order book delivery in the year, on a like-for-like basis at
the expected "go-live" rate (see below), was GBP55.6m, a 16%
reduction compared to prior year (FY17: GBP66.1m).
o Closing gross order book(1) at 31 July 2018 was GBP54.7m, a
17% reduction compared to GBP66.0m at 31 July 2017.
Notwithstanding the challenges the business faced during the
period, there were a number of positive key performance
indicators:
-- Observed "go-live" rate of customer new utility contracts of
80.3%, compared to 76.2% in FY17, leading to an increase in the
expected proportion of delivered contracts that subsequently become
revenue for the Group, as a result of improved controls and quality
of business;
-- Order book delivery from the newly launched inbound channel
of GBP1.5m in the year (FY17: GBPnil); and
-- Enterprise customer numbers of 42,200, an increase of 3%
compared to 41,100 at 31 July 2017, including the impact of the new
inbound channel.
As previously announced, the Group appointed
PricewaterhouseCoopers LLP to be its external auditors in June
2018. The Group is reviewing its revenue estimation methodology as
part of its FY18 year-end audit process, in light of the adoption
of the accounting standard IFRS 15 (Revenue from Contracts with
Customers) on 1 August 2017. A further update will be provided in
due course, once the review is complete.
Corporate division
FY18 saw continued progress in the Corporate division, with an
increase in Underlying EBITDA(2) of 252% compared to FY17.
As previously announced in July 2018, the Group is collaborating
with Vodafone and Dell EMC to launch an innovative Internet of
Things offering to the marketplace. FY18 revenues from the Group's
"intelligent buildings" proposition were 25% higher than FY17 and
further traction in these commercial relationships is expected
during the new financial year.
Group net debt
Group net debt at 31 July 2018 of GBP17.5m, a reduction of 8%
compared to net debt of GBP19.0m at 31 July 2017 and a reduction of
10% excluding non-cash changes in net debt. The net debt as at 31
July 2018 includes net bank debt of GBP14.3m, which is funded by
the Group's GBP25m revolving credit facility.
Brendan Flattery, Utilitywise CEO, said:
"The second half of the financial year was challenging, for
reasons that were well-publicised, as the Group continued to deal
with a number of legacy issues. However, we have also remained
focused on delivering our Strategy for Growth 2021 and have already
taken some significant steps to capture the considerable growth
opportunities we see in both the Enterprise and Corporate
divisions.
We expect the new financial year to be key as we see increased
progress in the execution of our strategy. In the Enterprise
division, this will mean continued improvements to efficiency and
profitability as well as the optimisation of our channel mix,
including growth from our new inbound channel. In the Corporate
division, we expect further revenue growth from our Internet of
Things proposition, with which we are delighted to collaborate with
Vodafone and Dell.
Despite the issues we have faced, the opportunities available
for growth mean that we remain excited about the long-term
prospects for Utilitywise and delivering value to
shareholders."
(1) Closing order book stated on 100% basis, before allowance
for go-live rates and projected under-consumption
(2) Underlying EBITDA is earnings before interest, taxation
depreciation and amortisation, stated before exceptional items
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
For further information
Utilitywise plc 0330 303 0233
Brendan Flattery (CEO)
Richard Laker (CFO)
finnCap (NOMAD and broker) 020 7220 0500
Matt Goode / James Thompson (Corporate Finance)
Andrew Burdis (Corporate Broking)
Liberum (Joint broker) 020 3100 2000
Robert Morton / Steve Pearce
Redleaf Communications 020 3757 6865
Robin Tozer / Elisabeth Cowell utilitywise@redleafpr.com
Utilitywise is a leading independent utility cost management
consultancy, which has established trading relationships with a
number of major UK and European energy suppliers and provides
services to its customers designed to assist them in achieving
better value out of their energy contracts, reduced energy
consumption and lower carbon footprint.
Utilitywise is a UK company quoted on the AIM market of the
London Stock Exchange. For more information, please visit
www.utilitywise.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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