REG - eEnergy Group PLC - 12 Month Interim Results
28/09/2023 07:00
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RNS Number : 9175N eEnergy Group PLC 28 September 2023
28 September 2023
eEnergy Group plc
("eEnergy" or "the Group")
12 Month Interim Results
eEnergy (AIM: EAAS), the net zero energy services provider, is pleased to
announce its unaudited interim accounts for the 12 months to 30 June 2023. On
22 June 2023 the Company announced that it had changed its accounting
reference date from 30 June to 31 December. Accordingly, the Company is today
presenting unaudited interim results for the 12 months to 30 June 2023.
Audited full year results for the 18 months to 31 December 2023 will be
announced in 2024.
Financial Highlights
· Revenue up 50% to £33.2 million (FY 2022: £22.0 million)
o Energy Services revenue £19.5 million, up 87%, Adj EBITDA £2.3 million,
up 131%
o Energy Management revenue £13.6 million, up 17%, Adj EBITDA £4.4
million, up 20%
· Adj EBITDA((1)) up 55% to £4.7 million (FY 2022: £3.0 million)
· Adj PBT((2)) up 34% to £2.7 million (FY 2022: £2.0 million)
· PBT £1.1 million (FY 2022 Loss Before Tax: £2.2 million)
· Net Cash / (Debt) £(6.9) million (FY 2022: £1.5 million), a consequence of
£5.2 million increase in working capital, reflecting a strengthened balance
sheet
Operational highlights
· Launch of eSolar with 29 MW under Heads of Terms or signed contract as at 30
June 2023, up 226% on 30 June 2022 (8.9 MW)
· Completion of a new €5 million two-year project funding facility with Solas
Capital AG to finance LED lighting projects in Ireland
· Appointment of John Foley as Non-Executive Chairman
Post Period end
· Increased ownership in subsidiary, eEnergy Insights Ltd, which holds the
Group's MY ZeERO smart metering and analytics platform, to 100%
· Contract with Tudor Grange Academies Trust worth £3.0 million Total Contract
Value for onsite solar generation
Harvey Sinclair, eEnergy CEO, said, "We are pleased with both the financial
and strategic progress throughout the year. We have expanded into new market
segments and built strong platforms in eSolar and eCharge which are expected
to be key growth drivers of the business going forward.
"We achieved a significant milestone in the year in reaching profitability.
The signing of Tudor Grange post period end demonstrates the sales team's
cross selling abilities, and our Forward Order Book remains strong, standing
at £27.5 million. Our established market position is creating larger project
opportunities and Management are focused on improving cash generation to
enable us to pursue these exciting projects. The Board is reviewing a number
of strategic options to further strengthen our balance sheet to support our
continued strong growth. We are cautiously optimistic of delivering trading
expectations for the full period."
Investor & Analyst presentations
An online analyst briefing will be held at 11:00. Analysts wishing to attend
should contact eEnergy@tavistock.co.uk (mailto:eEnergy@tavistock.co.uk) to
register.
Management will provide online presentations relating to the interim results
for investors via the Investor Meet Company platform at 09:00, and the Equity
Development platform at 15:30. Both presentations are open to all existing and
potential shareholders.
Investors can sign up to Investor Meet Company for free and add to meet
eEnergy Group plc via:
https://www.investormeetcompany.com/eenergy-group-plc/register-investor
(https://www.investormeetcompany.com/eenergy-group-plc/register-investor)
Investors can register for the Equity Development presentation for free via:
h
(https://www.equitydevelopment.co.uk/news-and-events/eaas-investor-presentation-28sept2023)
ttps://www.equitydevelopment.co.uk/news-and-events/eaas-investor-presentation-28sept2023
(https://www.equitydevelopment.co.uk/news-and-events/eaas-investor-presentation-28sept2023)
Note: (1) Adjusted EBITDA is Earnings before interest, tax, depreciation and
amortisation, excluding exceptional items. Exceptional Items are those items
which, in the opinion of the Directors, should be excluded in order to provide
a consistent and comparable view of the underlying performance of the Group's
ongoing business and include transaction-related items, restructuring and
integration costs and share based payment expenses.
(2) Adjusted PBT excluding Exceptional Items and amortisation of acquired
intangibles.
Contacts:
eEnergy Group plc Tel: +44 20 7078 9564
Harvey Sinclair, Chief Executive Officer info@eenergyplc.com (mailto:info@eenergyplc.com) ; www.eenergyplc.com
(http://www.eenergyplc.com)
Crispin Goldsmith, Chief Financial Officer
Strand Hanson Limited (Nominated Adviser) Tel: +44 20 7409 3494
Richard Johnson, James Harris
Canaccord Genuity Limited (Joint Broker) Tel: +44 20 7523 8000
Max Hartley, Harry Pardoe (Corporate Broking)
Turner Pope Investments (Joint Broker) Tel: +44 20 3657 0050
Andy Thacker, James Pope info@turnerpope.com
Tavistock Tel: +44 207 920 3150
Jos Simson, Heather Armstrong, Katie Hopkins eEnergy@tavistock.co.uk (mailto:eEnergy@tavistock.co.uk)
About eEnergy Group plc
eEnergy (AIM: EAAS) is a net zero energy services provider, empowering
organisations to achieve net zero by tackling energy waste and transitioning
to clean energy, without the need for upfront investment. It is making net
zero possible and profitable for all organisations in four ways:
· Transition to the lowest cost clean energy through the Group's digital
procurement platform and energy management services.
· Tackle energy waste with granular data and insight on energy use and dynamic
energy management.
· Reduce energy use with the right energy efficiency solutions without upfront
cost.
· Reach net zero with onsite renewable generation and electric vehicle (EV)
charging.
eEnergy is a Top 5 B2B energy company and has been awarded The Green Economy
Mark by London Stock Exchange.
CEO Statement
I am pleased to report that the last 12 months has proved to be another
successful period for eEnergy, delivering significant growth in both revenue
and profitability. Our vision of making Net Zero possible and profitable for
organisations continues to be increasingly relevant as the country continues
its journey to Net Zero by 2050.
Our established energy-as-a-service, end to end solution enables businesses to
access the lowest cost clean energy, identify and tackle energy waste, reduce
energy consumption and transition to an EV charging model through zero capital
solutions.
Energy Market
While energy markets have started to stabilise, energy independence and moving
away from the grid remains a high priority at state level, all the way down to
the consumer.
Although energy prices have dropped since the spike in 2022, volatility and
uncertainty remains, where a single event could see prices escalate quickly.
However, even at current levels which remain significantly higher than
historic trends, there is still a considerable opportunity for organisations
to unlock substantial cash savings without investing their own capital in the
transition to reducing carbon. Compliance and governance are increasing across
the public and private sectors meaning that decarbonising is no longer an
option, but rather a necessity for organisations.
Results
During the 12 month interim period to 30 June 2023, revenue increased by 50%
to £33.2 million, up from £22.1 million, and Adjusted EBITDA increased 54%
to £4.7 million. Energy Services revenue was up 87% to £19.5 million and
Energy Management was up to £13.6 million, an increase of 17%. Adjusted
EBITDA was £2.3 million and £4.4 million for Energy Services and Energy
Management respectively, supported by a strong underlying performance from
both of the Group's divisions.
The increase in revenue has resulted in Profit Before Tax of £1.1 million (FY
2022 Loss Before Tax: £2.2 million) and as at 30 June 2023 the Group's cash
balance was £0.8 million, excluding £0.5 million of restricted cash
balances.
Net Debt (excluding IFRS 16 lease liabilities) at 30 June 2023 was £7.0
million following the Group securing further debt finance of £2.5 million as
announced on 25 November 2022 (the "Subordinated Debt"), in order to provide
additional funding to the Group. The Subordinated Debt was structured as
secured discounted capital bonds (the "Bonds") which are due for repayment on
24 May 2024 and 21 June 2024. £1.0 million of the Subordinated Debt was
provided by each of, Hawk Investment Holdings Limited, an existing shareholder
of eEnergy, and FFIH Limited, with the balance of £0.5 million being provided
by Directors of the Company.
eEnergy has a fully drawn £5.0 million revolving credit facility with HSBC
Innovation Finance (previously known as Silicon Valley Bank). The Company is
actively engaged in discussions with a short list of debt providers and the
Board expects to secure a combined refinancing facility for both debt
instruments. Financing costs during the period were higher due to, inter alia,
the new Subordinated Debt facility and the higher interest rate environment.
Sales across Energy Services have increased by 87% over the last 12 months,
driven partly by the increasing penetration into the education sector but also
due to greater diversification in the broader public sector and through the
ability to cross sell to customers across the Group.
We see increasing growth opportunities developing from new products being
launched in both the education sector and multi-site organisations, which will
see our data services division provide the opportunity to access procurement
services combined with smart granular energy data within buildings, tackling
energy wastage, through the Company's unique capital free subscription
service.
Change in accounting reference date
As announced on 22 June 2023, the Company has changed its accounting reference
date and financial year end from 30 June to 31 December. The Group's business
activities and revenues are weighted towards the middle of the calendar year
and the Board therefore believes that a 31 December year end will be in the
best interest of the Group.
Strategy
Since launching its renewables division, eSolar, the Company has seen strong
demand, originating 29 MW of signed contracts and HOTs as at 30 June 2023,
which we expect to convert to revenue over the coming 12 months. We see Solar
as a significant growth area across the Group.
The Group announced on 7 June 2023 that it had entered into an initial new
€5 million two-year project funding facility with Solas Capital AG ("Solas")
to finance LED lighting projects in Ireland. This partnership replaces
previous arrangements and reinforces the Group's commitment to its growth
strategy.
The Solas Sustainable Energy Fund is supported by the European Investment
Bank, the Ireland Strategic Investment Fund, and the LIFE-programme of the
European Commission.
eEnergy has built a strong market position which is creating larger project
opportunities. The Company has achieved a significant milestone and is now
profitable. It has improved its working capital position and has made
substantial reductions in legacy liabilities. Management recognises that
further improvements to cash generation are necessary in order that the
business can continue to scale. The Board is reviewing a number of strategic
options to further strengthen the balance sheet to support growth.
On 10 August 2023, the Company announced that it had increased its ownership
to 100% in its subsidiary, eEnergy Insights Ltd ("EIL"), which holds the
Group's MY ZeERO smart metering and analytics platform, through the
acquisition of the minority holdings of two former management shareholders.
The acquisition of the final tranche of MY ZeERO allows the differentiated
offering to be fully integrated into the eEnergy proposition.
Board
Further to the Group's debt financing in November 2022, John Foley was
formally appointed as Non-Executive Chairman of eEnergy in March 2023, while
David Nicholl moved to Non-Executive Director. Derek Myers resigned from the
Board on 2 May 2023.
Outlook
Energy remains high on the agenda across the UK, and we continue to see strong
appetite from new and existing customers for our suite of products and
services.
Post period end, the Company secured a significant contract with a Total
Contract Value ("TCV") of £3.0 million, resulting in £1.9 million revenues,
from existing customer Tudor Grange Academies Trust, for a solar energy
generation project across its collection of academies. This illustrates the
Company's ability to execute against its cross selling strategy within its
existing customer base.
Whilst market conditions tightened over the summer period, eEnergy's
contracted revenue book remains significant, giving strong visibility on
revenues for the final six months of the financial period. Contracted forward
revenues (the "Forward Order Book") at 30 June 2023 were £27.5 million (31
December 2022: £26.4 million), of which £14.1 million are expected to
convert into revenues in the six months to 31 December 2023.
The Group remains confident that eEnergy's proposition is more relevant than
ever, further supported by a continued shift in regulatory and structural
growth drivers. The Group remains cautiously optimistic of delivering results
for the 18 month period ending 31 December 2023 in line with market
expectations.
Harvey Sinclair
Chief Executive Officer
28 September 2023
CFO Statement
Group key performance indicators
12m Period to 30 June 2023 6m Period to 31 December 2022 Year to 30 June 2022 6m Period to 31 December 2021 Year to 30 June 2021
£'000 £'000 £'000 £'000 £'000
Revenue 33,159 15,124 22,096 9,592 13,596
Adj. EBITDA 4,665 1,508 3,021 807 830
Adj. EBITDA% 14.10% 10.00% 13.70% 8.40% 6.10%
Cash & cash equivalents (exc. restricted balances) 818 1,050 1,380 2,430 3,332
Net Cash / (Debt) (excl. Of IFRS16) (6,935) (6,567) (3,642) (516) 1,486
Summary performance
The 12 months to June 2023 ("P1 FY23") was another period of significant
growth for the Group. Revenue of £33.2 million was up 50% from FY22,
driving a 54% increase in Adjusted EBITDA to £4.7 million and delivering
Profit Before Tax of £1.1 million (FY22 Loss Before Tax: £2.2 million).
Net Debt increased by £3.3 million in the period, funded by an additional
£2.5 million in debt funding through a new Subordinated Bond in November
2022. The increase in Net Debt was largely a consequence of a £5.0
million increase in working capital. This was primarily driven by an increase
in net accrued revenues, representing future contracted cash due to the
business, repayment of legacy (non-trade) liabilities and a reduction in the
provision for earnout consideration relating to the acquisition of
UtilityTeam.
The six-months to June 2023 ("H2 FY23") saw the working capital position
improve as a result of management actions, with an increase in Net Debt of
£0.4 million after settling £0.9 million of legacy overdue HMRC balances.
Whilst this represented a significant improvement on previous periods (£2.9
million increase for H1 FY23) and demonstrated that underlying operating cash
flows are starting to come through, it was below the internal cash generation
targets set.
The business has successfully built strong market positions across its product
set giving a good platform for growth. It is a key focus for management to
deliver on this growth opportunity in a way which is more cash generative.
Divisional Performance
Energy Services
The strong momentum in new contract wins continues to drive accelerated
revenue growth. Revenues of £19.5 million for P1 FY23 represented growth of
87% compared to FY22 and drove substantial growth of 131% in Adjusted EBITDA
to £2.3 million (FY22 £1.0 million).
Strong execution and focus on cost management helped the Group deliver a 0.9%
improvement on Gross Margins to 35.1% (FY22 34.2%), despite inflationary
pressures and a changing product mix with growing eSolar and eCharge revenues
generating lower product Gross Margins. Energy Services is segmented into
three verticals - Measure (primarily MY ZeERO), Reduce (primarily lighting)
and Connect (eSolar and eCharge). Target Gross Margins vary from 50% in
Measure, 38% in Reduce to 25%-30% in Connect (depending on the product).
£26.4 million of new contract signings were delivered during the period,
representing an increase of 76% on FY22. This accelerating momentum has
continued into the final period of FY23, in particular with the award of the
eSolar contract worth £3.0 million in TCV and £1.9 million in revenues with
Tudor Grange Academies Trust in September 2023.
The Group has built a strong pipeline of solar opportunities over the last 12
months and had 29.0 MW under signed contracts or Heads of Terms as at 30 June
2023 (up from 8.9 MW at 30 June 2022). Lead times on eSolar projects are long
given the number of stakeholders involved and consents required. After a long
development cycle these projects are now converting into revenue, accelerating
growth during the remainder of FY23 and into FY24.
Energy Management
The Energy Management business has continued to perform well despite a
challenging market backdrop of unprecedently high volatility in energy prices
and a period where the primary focus has been on integration rather than
growth.
Underlying organic revenue growth of 5% was boosted by annualisation of the
UtilityTeam acquisition (completed September 2021) to record overall 17%
revenue growth to £13.6 million (FY22: £11.6 million). Adjusted EBITDA of
£4.4 million represented robust 20% growth (FY22: £3.7 million).
A significant majority (c.95%) of revenue is generated from commissions paid
by energy suppliers linked to long-term customer supply contracts with a
retention rate on renewal of 85%+. The Board believes this dynamic gives the
business unit an attractive quality of earnings.
Service delivery continues to be a key focus of the Company following
completion of the UtilityTeam integration. The Group has invested in both the
enlarged team and the delivery platform to ensure a best-in-class customer
experience through the life of the relationship which should maintain and
enhance retention rates, as well as giving a differentiated proposition for
new business acquisition. This investment is now delivering returns and EBITDA
margin has increased to 32.4% in the period (FY22: 31.6%).
Cash Flow and Working Capital
Net cash outflow from operating activities for the period was £1.2
million (FY22 net cash outflow: £6.2 million). Management actions during
the period, as detailed below, have improved operating cash flows, delivering
a cash inflow from operating activities of £0.7 million for H2 FY23 (H2 FY22
net cash outflow: £3.0 million). Nevertheless, this was below the internal
cash generation targets set for the business.
The operating cash outflow was a result of a £5.0 million increase in net
working capital. Whilst this represents a strengthened Balance Sheet which
should support improved cash generation going forward, it led to a funding
requirement for the business in the period.
The single biggest contributor to this was an increase in net accrued revenue
of £6.2 million. This increase partly reflects longer project lead times in
eSolar, with strong contract signings in the final quarter of the reporting
period, together with the organic growth of the business in both Energy
Management and Energy Services. Accrued revenue is recognised where revenue
generating activity within a given period is rewarded by cashflow in future
periods. Accrued revenue therefore represents contracted future cash receipts
for the business.
The increase in accrued revenue was mitigated by increases in accruals and
trade payables, which have scaled as revenues have increased, resulting in a
net increase in trade working capital of £1.3 million.
Payments of £1.8 million were made against legacy (non-trade and
non-recurring) liabilities during the period. £1.6 million related to
historical Time-to-Pay arrangements with HMRC, clearing historical overdue
amounts, and £0.2 million related to legacy liabilities in Ireland.
There was also a largely non-cash reduction of £0.9 million in contingent
consideration, relating to the acquisition of UtilityTeam.
Cash flow also reflected a £0.8 million investment in the period in
continuing to develop the Group's proprietary technology platforms, including
a new self-service client portal in Energy Management and MY ZeERO's cloud
analytics.
Initiatives implemented by management in the period have improved working
capital during H2 FY23.
Operating cash conversion in Energy Management is on an improving trajectory
as a result of improved contract terms negotiated with energy suppliers and
growing contracted cash flows from customer contracts signed in previous
periods. Operating cash conversion increased from 34% for the 12 months to
March 2023 to 63% for the 12 months to June 2023 and is targeted to improve
further to 75% in FY24.
Energy Services is now the key focus area for improving cash generation, with
a clear plan to increase operating cash conversion from 50% for P1 FY23 to a
targeted 75% for FY24.
The Group is now working with a range of funding partners able to fund all
customer and product types. Off-balance sheet funding has been secured for MY
ZeERO eMeters with the first drawdowns against this facility being made post
period end. In addition, post period end, a funding partner in Solas has been
secured for eSolar projects.
There is also a focus on improving operating margins, for example by
consolidating operational delivery teams.
Borrowings and Funding
The increase in Net Working Capital during the period was principally
financed through the issue of £2.5 million of Subordinated Bonds
in November 2022.
The Group's senior secured revolving credit facility with HSBC Innovation
Finance (previously known as Silicon Valley Bank) is scheduled to be repaid in
February 2024. The Subordinated Bonds are scheduled to be repaid in May 2024.
The Board is working to complete a refinancing of these facilities ahead of
the scheduled repayment dates.
During the reporting period the Company has achieved profitability, improved
its working capital position and has made substantial reductions in legacy
liabilities. Management are now focusing on delivering further improvements to
cash generation in order that the business can continue to scale. The Board is
reviewing a number of strategic options to further strengthen the balance
sheet to support growth.
H3 FY23 Outlook
Momentum across both parts of the business means that, going into Q6, the
foundations are in place to meet the Board's expectations for the full-year
out-turn. As at 27 September 2023, there is visibility on 90% of the revenue
expectation for the full period.
Energy Services continues to benefit from accelerating momentum and has
developed a strong pipeline of revenues in attractive new market segments, in
particular eSolar. It is important that this momentum is converted in a way
which improves cash generation.
Continued investment in capabilities and infrastructure in Energy Management
is delivering an enhanced customer proposition and user experience, supporting
retention and new business wins.
The final quarter of FY23 is expected to benefit from strong revenue growth in
eSolar, now converting the pipeline of opportunities built over the last 12
months and leveraging off the existing Group cost base.
Crispin Goldsmith
Chief Financial Officer
28 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
Note Year to Year to 30 June 2022
30 June 2023
£'000
£'000
Continuing operations
Revenue from contracts with customers 33,159 22,096
Cost of sales (15,474) (9,131)
Gross profit 17,685 12,965
Operating expenses (14,163) (12,233)
Included within operating expenses are:
- Other exceptional items 4 1,143 2,289
Adjusted operating expenses (13,020) (9,944)
Adjusted earnings before interest, taxation, depreciation and amortisation 4,665 3,021
Earnings before interest, taxation, depreciation and amortisation 3,522 732
Depreciation and amortisation (1,387) (2,636)
Finance costs (1,050) (323)
Profit (Loss) before taxation 1,085 (2,227)
Income tax (485) 736
Profit (Loss) for the year from continuing operations attributable to the 600 (1,491)
owners of the company
Attributable to:
Owners of the company 608 (1,431)
Non-controlling interest (8) (60)
600 (1,491)
Other comprehensive income - items that may be reclassified subsequently to
profit and loss
Translation of foreign operations 11 (125)
Total other comprehensive profit (loss) 11 (125)
Total comprehensive profit (loss) for the year 611 (1,616)
Total comprehensive profit (loss) attributable to:
Owners of the company 619 (1,556)
Non-controlling interest (8) (60)
611 (1,616)
Basic earnings (loss) per share from continuing operations 5 0.17p (0.44)p
Diluted earnings (loss) per share from continuing operations 5 0.14p (0.44)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Note As at As at
30 June 2023
30 June 2022
£'000
£'000
NON-CURRENT ASSETS
Property, plant and equipment 492 458
Intangible assets 6 28,812 28,733
Right of use assets 680 777
Deferred Tax Asset 745 1,071
Total non-current assets 30,729 31,039
Inventories 1,116 809
Trade and other receivables 22,876 16,022
Financial assets at fair value through profit or loss 44 21
Cash and cash equivalents 1,305 1,802
Total current assets 25,341 18,654
TOTAL ASSETS 56,070 49,693
NON-CURRENT LIABILITIES
Lease liability 456 399
Borrowings 7 - 5,011
Other non-current liabilities 2,125 2,252
Deferred Tax Liability 1,477 1,318
Provisions 860 860
Total non-current liabilities 4,918 9,840
CURRENT LIABILITIES
Trade and other payables 18,972 16,802
Lease liability 365 492
Borrowings 7 7,753 11
Total current liabilities 27,090 17,305
TOTAL LIABILITIES 32,008 27,145
NET ASSETS 24,062 22,548
Equity attributable to owners of the parent
Issued share capital 16,386 16,373
Share premium 47,667 47,360
Other reserves 844 261
Reverse acquisition reserve (35,246) (35,246)
Foreign currency translation reserve (127) (138)
Accumulated losses (5,377) (5,985)
Total equity attributable to owners of the parent 24,147 22,625
Non-controlling interest (85) (77)
Total equity 24,062 22,548
CONSOLIDATED STATEMENTS OF CASHFLOWS
For the year ended 30 June 2023
Year to 30 June 2023 Year to
£'000
30 June 2022
£'000
Cash flow from operating activities
Operating profit (loss) - continuing operations 600 (1,491)
Adjustments for:
Depreciation and amortisation 1,383 2,636
Finance cost (net) 672 264
Share based payment 583 520
Gain on derecognition of contingent consideration (448) (1,032)
Operating cashflow before working capital movements 2,790 897
(Increase) in trade and other receivables (6,902) (9,857)
Increase in trade and other payables 2,777 165
(Increase) in inventories (308) (95)
Decrease in deferred income 404 2,650
Net cash outflow from operating activities (1,239) (6,240)
Cash flow from investing activities
Cash acquired on acquisition of business - 4,007
Cash paid to acquire subsidiaries - (11,081)
Expenditure on intangible assets (1,067) (401)
Purchase of property, plant and equipment (124) (294)
Net cash (outflow) from investing activities (1,191) (7,769)
Cash flows from financing activities
Interest (paid) received (316) (188)
Repayment of lease liabilities (510) (347)
Net proceeds from the issue of shares - 11,382
Proceeds from loans and borrowings 2,775 4,891
Repayment of borrowings (10) (3,287)
Net cash inflow from financing activities 1,939 12,451
Net decrease in cash and cash equivalents (491) (1,558)
Effect of exchange rates on cash (6) 28
Cash and cash equivalents at the start of the period 1,802 3,332
Cash and cash equivalents at the end of the period 1,305 1,802
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share Capital Share Premium Reverse Acqn. Reserve Other Reserves Foreign Currency Reserve Accum. Losses Non Control Interest Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 July 2021 16,071 33,014 (35,246) 601 (13) (4,554) - 9,873
Other comprehensive loss - - - - (125) - - (125)
Profit for the period - - - - - (1,431) (60) (1,491)
Total comprehensive loss for the period - - - - (125) (1,431) (60) (1,616)
Issue of shares for cash 240 11.760 - - - - - 12,000
Issue of shares for acquisition of subsidiary 55 2.903 - - - - - 2,958
Issue of shares in exchange for loan notes 7 301 - - - - - 308
Acquisition of non-controlling interest - - - - - - (17) (17)
Acquisition of put-option relating to non-controlling interest - - - (3.921) - - - (3.921)
Utilisation on acquisition of non-controlling interest - - - 3,061 - - - 3,061
Share based payments - - - 520 - - - 520
Cost of share issue - (618) - - - - - (618)
Total transactions with owners 302 14.346 - (340) - - (17) 14,291
At 1 July 2022 16,373 47,360 (35,246) 261 (138) (5,985) (77) 22,548
Other comprehensive loss - - - - 11 - - 11
Profit for the period - - - - - 608 (8) 600
Total comprehensive loss for the period - - - - 11 608 (8) 611
Issue of shares during the period 13 307 - - - - - 320
Share based payments - - - 583 - - - 583
Total transactions with owners 13 307 - 583 - - - 903
Balance at 30 June 2023 16,386 47,667 (35,246) 844 (127) (5,377) (85) 24,062
SELECTED NOTES TO THE FINANCIAL INFORMATION
For the year ended 31 June 2023
1. BASIS OF PREPARATION
The condensed consolidated interim financial statements of eEnergy Group
plc (the "Group") for the six month period ended 31 December 2023 have been
prepared in accordance with Accounting Standard IAS 34 Interim Financial
Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 30 June 2022, which
was prepared under UK adopted international accounting standards (IFRS), and
any public announcements made by eEnergy Group plc during the interim
reporting period and since.
These condensed consolidated interim financial statements do not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 30 June 2022have
been prepared under IFRS and have been filed with the Registrar of Companies.
The auditor's report on those financial statements was unqualified and did not
contain a statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been audited.
During the period, the Group changed its accounting reference date to 31
December and consequently will report again for the 18 month period ending 31
December 2023.
Basis of preparation - going concern
The Directors have a reasonable expectation that the Company and Group have
sufficient resources to continue to operate for the foreseeable future. The
Group continues to show improvement in revenue and operating profitability
over the past several periods. The scale of organic growth and associated
working capital requirement, particularly in the Energy Services business,
continues to be a key focus area of management action to continue to improve
the operating cash flow of the business going forward. The Group expects to be
able to refinance its existing £7.8 million borrowing, repayable within the
next 12 months (see Note 7), before the scheduled repayment dates. At 30 June
2023 the Group had unrestricted cash reserves of £0.8 million (30 June 2022:
£1.4 million).
In assessing whether the going concern assumption is appropriate, the
Directors have taken into account all relevant information about the current
and future position of the Group and Company. These include the current level
of resources, the ability to trade within the terms and covenants of its loan
facility, the assumed success of the debt refinancing and the ability of the
Group to raise additional equity or debt capital if required. After taking
these matters into consideration, the Directors consider that the continued
adoption of the going concern basis is appropriate. The interim financial
statements do not reflect any adjustments that would be required if they were
to be prepared other than on a going concern basis.
Accounting policies
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
2. SEGMENT REPORTING
The following information is given about the Group's reportable segments:
The Chief Operating Decision Maker is the Board of Directors. The Board
reviews the Group's internal reporting in order to assess performance of the
Group and has determined that in the year ended 30 June 2023 the Group had
three operating segments, being Energy Services, Energy Management and
Central.
Energy Mgmt Energy Services Central Group
30 June 2023 £'000 £'000 £'000 £'000
Revenue - UK 13,619 17,746 31,365
Revenue - Ireland - 1,794 - 1,794
Revenue - Total 13,619 19,540 - 33,159
Cost of sales (2,784) (12,690) - (15,474)
Gross Profit 10,835 6,850 - 17,685
Operating expenses (6,426) (4,595) (1,999) (13,020)
Adjusted EBITDA 4,409 2,255 (1,999) 4,665
Depreciation and amortisation (347) (141) (899) (1,387)
Finance and similar charges (38) (86) (926) (1,050)
Profit (loss) before exceptional items 4,024 2,028 (3,824) 2,228
Exceptional items (239) (299) (605) (1,143)
Profit (loss) before tax 3,785 1,729 (4,429) 1,085
Taxation credit - - (485) (485)
Profit (loss) after tax 3,785 1,729 (4,914) 600
Net Assets
Assets 35,667 18,396 2,007 56,070
Liabilities (8,971) (12,431) (10,606) (32,008)
Net assets 26,696 5,965 (8,599) 24,062
Energy Mgmt Energy Services Central Group
30 June 2022 £'000 £'000 £'000 £'000
Revenue - UK 11,634 8,518 - 20,152
Revenue - Ireland - 1,944 - 1,944
Revenue - Total 11,634 10,462 - 22,096
Cost of sales (2,251) (6,880) - (9,131)
Gross Profit 9,383 3,582 - 12,965
Operating expenses (5,709) (2,607) (1,628) (9,944)
Adjusted EBITDA 3,674 975 (1,628) 3,021
Depreciation and amortisation (789) (124) (159) (1,072)
Finance and similar charges (82) (244) 3 (323)
Profit (loss) before exceptional items 2,803 607 (1,784) 1,626
Impairment of brands (1,564) - - (1,564)
Exceptional items (797) (346) (1,146) (2,289)
Profit (loss) before tax 442 261 (2,930) (2,227)
Taxation credit 736 - - 736
Profit (loss) after tax 1,178 261 (2,930) (1,491)
Net Assets
Assets 33,930 12,930 2,833 49,693
Liabilities (10,483) (8,702) (7,960) (27,145)
Net assets 23,447 4,228 (5,127) 22,548
3. EXCEPTIONAL ITEMS
Operating expenses include items that the Directors consider to be exceptional
by their nature. These items are:
Year to Year to
30 June
30 June
2022
2023 £'000
£'000
Acquisition related expenses - 1,273
Changes to initial recognition of contingent consideration (435) (1,032)
Incremental restructuring and integration costs 995 1,181
Share based payment expense 583 520
Other strategic investments - 347
Total exceptional expenses 1,143 2,289
Acquisition expenses from the prior period are the costs incurred in
completing the "Buy and Build" strategy associated with acquisitions and
strategic investments. The costs incurred in completing the acquisition of
UtilityTeam in September 2021 are described in Note 8.
The share based payment charge reflects the non cash cost of the Management
Incentive Plan awards made on 7 July 2020 and the award of options made to the
senior management team on 7 December 2021 which are being amortised over their
three year vesting period.
4. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the year by the weighted average number of
ordinary shares in issue during the year.
Year to Year to
30 June 2023 30 June 2022
Profit / (loss) profit for the year from continuing operations attributable to 608,000 (1,431,000)
owners of the Company - £
Weighted number of ordinary shares in issue 350,406,333 323,783,394
Basic earnings per share from continuing operations - pence 0.17p (0.44)p
Weighted number of dilutive instruments in issue 83,991,424 -
Weighted number of ordinary shares and dilutive instruments in issue 434,397,757 323,783,394
Diluted earnings per share from continuing operations - pence 0.14p (0.44)p
Share options and warrants could potentially dilute basic earnings per share
in the future but were not included in the calculation of diluted earnings per
share in the prior period year as they are anti-dilutive.
5. INTANGIBLE ASSETS
Goodwill £'000 Software £'000 Customer relation-ships Trade names £'000 Total
£'000
£'000
Cost
At 1 July 2022 23,816 1,258 4,311 1,594 30,979
Adjustment to goodwill on acquisition (215) - - - (215)
Additions in the period - 1,063 - - 1,063
At 30 June 2023 23,601 2,321 4,311 1,594 31,827
Amortisation
At 1 July 2022 - (219) (433) (1,594) (2,246)
Amortisation in the period - (381) (388) - (769)
At 30 June 2023 - (600) (821) (1,594) (3,015)
Net book value at 23,816 1,039 3,878 - 28,733
30 June 2022
Net book value at 23,601 1,721 3,490 - 28,812
30 June 2023
6. BORROWINGS
30 June 30 June
2023 2022
£'000
£'000
Current
Borrowings 7,753 11
7,753 11
Non-current
Borrowings - 5,011
- 5,011
During the current period the Group secured a further £2.5 million in
Subordinated Debt which has been structured as secured discounted capital
bonds. The Bonds are being issued at a 21.29% discount to their face value
(equivalent to a discount rate of 1.25% per month plus a 2% repayment fee) and
are due to be redeemed by the Company (through the payment of in
aggregate £3.2 million) on or before 24 May 2024 (in respect of £2.0
million) and on or before 21 June 2024 (in respect of £0.5 million).
In February 2022 the Group refinanced substantially all of its existing bank
indebtedness and consolidated its borrowings into a single £5.0 million,
three year, revolving credit facility provided to eEnergy Holdings Limited, an
intermediate holding company in the Group. A term of the additional
Subordinated Debt requires the business to refinance this loan in February
2024, one year earlier than originally planned. The facility is secured by way
of debentures granted to the lender by all of the Group's trading
subsidiaries. The facility includes covenants relating to debt service cover
and gearing.
Maturity of the borrowings as of 30 June 2023 are as follows:
£'000
Current 7,753
Due between 1-2 years -
Due between 2-5 years -
Due beyond 5 years -
7,753
7. RELATED PARTY TRANSACTIONS
Key management personnel are considered to be the Board of Directors. The
amount payable to the Board of Directors for the 12 months ended 30 June 2023
was £0.9 million (FY22: £0.8 million).
Directors' remuneration includes contractual payments to the former Chief
Financial Officer after he left the Board.
8. EVENTS AFTER THE BALANCE SHEET DATE
There were no significant events that occurred after the balance sheet date.
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