REG - eEnergy Group PLC - H1 24 Trading Update

EenergyAnnouncement

26/07/2024 07:00

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RNS Number : 9289X  eEnergy Group PLC  26 July 2024

26 July 2024

 

eEnergy Group plc

("eEnergy", "the Company" or "the Group")

 

H1 24 Trading Update

 

eEnergy (AIM: EAAS), the net zero energy services provider, announces an
update on trading for the six months ended 30 June 2024 ("the Period").

 

The Period has been focused on restructuring the operating platform of the
Group following the sale of the Energy Management Division. In addition, Q1 24
trading was impacted by a constrained balance sheet prior to the Energy
Management Division disposal and weak market conditions, resulting in a slow
start to the year as previously guided. Market conditions improved during the
Period and H2 24 has started with strong momentum which, together with a
robust contracted forward order book, enables the Group to maintain full year
revenue guidance at £25-26m.

 

Summary

 ●    H1 24 Core Revenue((1)) of £6.2m (pro forma((2)) H1 23 £11.0m)
 ●    H1 24 Core Adjusted EBITDA((1)) loss of £(2.1)m (pro forma((2)) H1 23 £0.5m)
 ●    £5.2 million solar contract signed with Spire Healthcare plc, the Group's
      largest to date
 ●    Up to £40m project funding facility with National Westminster Bank Plc (the
      "NatWest Facility") to finance energy efficiency and onsite generation
      technologies for the Group's public sector customers
 ●    Sales pipeline growth has been strong in the Period (pipeline up 25% in the
      period)
 ●    H2 24 revenues underpinned by contracted forward order book at 19 July -
      £12.9m expected to convert to revenue during H2 24 (pro forma((2)) H1 23
      £8.7m), comprising 75% of forecast H2 24 Solar revenues and 44% of forecast
      H2 24 LED revenues
 ●    H2 24 started with strong momentum, with positive signs of market recovery
 ●    Interim accounts expected to reflect an exceptional adjustment to the balance
      sheet following a full review of the Group structure and balance sheet,
      implemented following the sale of the Energy Management Division
 ●    Nick Clark appointed to new role of Chief Operating Officer

 

Note (1): Core Revenue and Core Adjusted EBITDA relate to the underlying
revenues and earnings of the continuing operations of the Group for the
period. They exclude amounts related to the Energy Management Division,
including pre-completion revenues and costs, and the accounting treatment of
the disposal. They are stated before share-based payments and 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.

Note (2): 'pro forma' means on a like-for-like basis, adjusted for the sale of
the Energy Management Division.

 

Q1 24 was a period where the business continued to be hampered by a weak
balance sheet. As previously highlighted, this was exacerbated by weak market
conditions, driven by lower energy prices and higher costs of finance which
saw lengthened customer decision-making cycles, culminating in a delay in
contract signings. However, following the disposal of the Energy Management
Division ("Disposal") and with the new NatWest Facility, the Group's balance
sheet has been significantly strengthened, providing working capital for
growth.

 

Market conditions have improved during the Period and the business has entered
H2 24 with a robust contracted forward order book of which £12.9m is expected
to convert to revenue in H2 24, comprising 75% of forecast H2 24 Solar
revenues and 44% of forecast H2 24 LED revenues. This high level of contracted
revenue gives the Board confidence in the underlying trading for the
continuing business for the full year FY24.

 

During the Period the Group completed on the Disposal for £29.3m.  The net
proceeds from the Disposal are being used to reinvest into the Company's high
growth Energy Services Division and all the Group's previous debt facilities
of £8.1m have now been repaid. Following the Disposal, which has necessitated
carving out a standalone accounting system at the same time as completing an
ERP implementation and building independent infrastructure and platforms,
management have taken the opportunity to restructure the continuing Group in
order to build a strong foundation to drive long-term, scalable revenue and
earnings growth with improving margins. This restructure has identified a
number of items which management are proposing to adjust for in the interim
accounts. As a result, the interim accounts are currently expected to reflect
an adjustment to the balance sheet of up to £2.5m which management consider
to be exceptional items and therefore excluded from adjusted earnings.

 

In addition to these anticipated exceptional items, exceptional costs in the
period will reflect the costs of executing the Disposal as well as the
separation and restructuring of the continuing business post-completion.

 

The Company expects to report its interim results during the second half of
September 2024.

 

Harvey Sinclair, eEnergy CEO, comments: "The first half of the year has been a
transformative period for the business, with the sale of the Energy Management
Division leaving a company with a solid track record and opportunity for
growth. The strengthened balance sheet alongside the NatWest facility removes
cash constraints on the business and provides working capital to drive growth.

 

"We have taken the opportunity following the sale to take a comprehensive
review on the Group structure, operations and balance sheet. As a result the
interim accounts are expected to reflect an exceptional balance sheet
adjustment of up to £2.5m.

 

"With much of the education sales cycle centred around the school year,
revenue generation for FY24 is expected to be concentrated in the second half
of the year. We have a strong Current Forward Order Book and the Board is
maintaining full year revenue guidance for FY24.

 

"We are pleased to have Nick Clark on board as a full-time COO. He brings
extensive expertise and a proven track record in successful operational growth
and he will be instrumental in driving eEnergy forward as we continue to
evolve our leading customer offers."

 

Investor Presentation

Harvey Sinclair, CEO, and Crispin Goldsmith, CFO, will host an online
presentation for investors on 8 August 2024. The presentation is open to all
existing and potential shareholders, and will be held via the Equity
Development platform and the Investor Meet Company platform.

 

This announcement contains inside information for the purposes of Article 7
of EU Regulation 596/2014. The person responsible for arranging for the
release of this announcement on behalf of eEnergy is Harvey Sinclair, Chief
Executive Officer.

 

For further information, please visit www.eenergy.com (http://www.eenergy.com)
or contact:

 

 eEnergy Group plc                              Tel: +44 20 7078 9564
 Harvey Sinclair, Chief Executive Officer       info@eenergy.com (mailto:info@eenergy.com)

 Crispin Goldsmith, Chief Financial Officer

 Strand Hanson Limited (Nominated Adviser)      Tel: +44 20 7409 3494
 Richard Johnson, James Harris

 Canaccord Genuity Limited (Broker)             Tel: +44 20 7523 8000
 Max Hartley, Harry Pardoe (Corporate Broking)

 Tavistock                                      Tel: +44 207 920 3150
 Jos Simson, Simon Hudson, Katie Hopkins        eEnergy@tavistock.co.uk (mailto:eEnergy@tavistock.co.uk)

 

About eEnergy Group plc

eEnergy (AIM: EAAS) is revolutionising the path to Net Zero as a leading
digital energy services provider for B2B and public sector organisations. We
eliminate the barriers to clean energy generation and energy waste reduction,
offering solutions that don't require upfront capital investment. Our vision
is clear: make Net Zero possible and profitable for every organisation.

 

Our primary services include:

·      Reduce: LED lighting and controls

·      Generate: Solar PV, ground mount, rooftop, and carport

·      Charge: EV charging and management software

 

All eEnergy's services come with intelligent circuit-level energy analytics
and are funded through NatWest or Siemens to provide an off-balance
sheet-compliant energy-as-a-service solution.

 

eEnergy has completed over 1,100 decarbonisation projects within the B2B and
public sector. We are #1 in the education sector, having worked with over 840
schools, installing over half a million LED lights, and improving the learning
environment for over 443,000 students-enough to fill Wembley Stadium almost
five times over. In one year alone, eEnergy has saved the education sector
£13 million in energy costs. With over 70% of schools yet to transition to
LED lighting and over 90% yet to deploy solar, eEnergy estimates that at least
£5.4 billion would need to be invested to install adequate rooftop solar, LED
lighting, and EV charging infrastructure in UK schools.

 

eEnergy is a market leader within the education sector and has been awarded
the Green Economy Mark by the London Stock Exchange.

 

-ends-

 

 

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