REG - eEnergy Group PLC - Results for the six months ended 30 June 2024
30/09/2024 07:00
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RNS Number : 1633G eEnergy Group PLC 30 September 2024
30 September 2024
eEnergy Group plc
("eEnergy", "the Company" or "the Group")
Results for the six months ended 30 June 2024
eEnergy (AIM: EAAS), the net zero energy services provider, announces an
update on trading for the six months ended 30 June 2024 ("the Period").
Financial highlights
● H1 24 Core Revenue((1)) of £6.0m (pro forma((2)) H1 23 £11.0m)
● H1 24 Core Adjusted EBITDA((1)) loss of £(2.0)m (pro forma((2)) H1 23 £0.5m)
● Sale of Energy Management Division for an initial consideration of £29.3m
● Loss Before Tax £(4.9)m (pro forma((2)) H1 23 £(2.0)m)
● Net cash £6.0m (30 June 23 net debt £(7.4)m)
● £5.2m solar contract signed with Spire Healthcare plc, the Group's largest to
date
● Strong sales pipeline growth of 25% up in the Period
Operational highlights
● Significant progress made to streamline and restructure the business following
sale of Energy Management Division
● Restructuring has brought improved efficiencies delivering clear upward trend
in pipeline and margins
● Solar continued its strong growth accounting for 34% of revenues in H1 24
● Secured £40m project funding facility with NatWest to finance energy
efficiency and onsite generation technologies for the Group's public sector
customers
● Investment in people and change in Board and management, Nick Clark appointed
to new role of Chief Operating Officer, John Gahan appointed as CFO, and
Andrew Lawley, previously Non-Executive Director, appointed as Non-Executive
Chair
Outlook
● H2 24 started with strong momentum
· Record quarterly revenue forecasted by management for Q3 of
£9.2m reflects strong performance in solar division and investment in people
● Revenues for rest of FY24 underpinned by contracted forward order book of
£7.6m at end September, of which £6.4m is expected to convert to revenue
during the remainder of FY24
● Market conditions have improved during the period and the business has entered
H2 24 with a substantial pipeline and strong momentum
● Whilst the Board is pleased to maintain full year revenue guidance at £25
million - £26 million, it notes that this is linked to a high volume of
projects scheduled for installation towards the end of the year when timing of
project delivery can be exposed to adverse weather conditions in the
short-term. Any variation in revenue for the full year would be expected to
have a corresponding impact on earnings.
Management and Directorate changes
Following the disposal of the Energy Management Division and consistent with a
shift in the Group's strategy away from M&A, it has been agreed that
Crispin Goldsmith will step-down as CFO. The Board would like to thank Crispin
for his contributions to the growth of the business, including the build-out
and subsequent disposal of the Energy Management Division, and wishes him well
for the future.
The Board are pleased to announce the appointment of John Gahan as the
Company's Chief Financial Officer and to the Board as director. John joins
from Simbec-Orion Group and was previously Finance Director of Sprue Aegis
plc, an AIM-quoted technology products business with a £100 million market
cap. John has extensive financial, commercial and operational experience
during periods of fast growth.
Crispin Goldsmith will step down from the Board as CFO and move to a
consultant role to ensure a smooth handover process.
The change will be effective from 1 October 2024.
Harvey Sinclair, eEnergy CEO, commented: "Following the sale of our Energy
Management Division, the last six months has been a period in which we have
taken the opportunity to realign the group to focus on our improved
efficiencies while investing in our team, making appointments at both the
Board and management level. I am pleased to report we have made significant
operational progress which has laid the foundations for continued growth and
increased market share.
"After a challenging market environment over the last 12 months, we have
started to see improving market conditions in line with our expectations.
Organisations have renewed their focus on both energy reduction initiatives
and clean energy generation solutions. This is reflected in our strong sales
pipeline which is up 25% in the period, and I am pleased to announce we have
achieved a record quarterly revenue for Q3.
"We have strong momentum in the business and with the market conditions
continuing to improve we look forward to updating shareholders on our progress
in H2.
"Finally, I welcome John Gahan as our new CFO who starts tomorrow. I would
like to thank Crispin Goldsmith for his role in repositioning the business
post the sale of our Energy Management Division."
Investor presentation
Harvey Sinclair, CEO, and Crispin Goldsmith will host an online presentation
via the Investor Meet Company platform for investors at 9am on Tuesday 1
October 2024.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via the Investor Meet Company dashboard up until
9am the day before the meeting, or at any time during the live presentation. A
recording of the presentation will be available after the event.
Sign up for free via:
https://www.investormeetcompany.com/eenergy-group-plc/register-investor
(https://www.investormeetcompany.com/eenergy-group-plc/register-investor)
(1) Core Revenue and Core Adjusted EDIBTA 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.
(2) 'pro forma' means on a like-for-like basis, for the comparative period 1
January to 30 June 2023 adjusted for the sale of the Energy Management
Division.
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, David Asquith
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.
CEO Statement
It has been a busy and productive six months, with significant change across
the Group, including the sale of the Energy Management Division in February
2024 ("the "Disposal"). We have taken the opportunity to pause and reset,
taking time to invest in our infrastructure, people and platforms, with
actions also being taken to reduce the Group's PLC cost-base. The Board is
pleased to report significant operational progress has been made which has
laid the foundations for continued growth and increased market share.
Operationally, our first half trading performance has reflected weak market
conditions, legacy balance sheet constraints and disruption as a result of the
Disposal and consequent business separation. After a lull during H2 FY23 and
into early FY24, we have seen a strengthening and re-acceleration of the Net
Zero agenda towards the end of H1 FY24 and into the start of H2 FY24. This is
reflected in our strong sales pipeline which is up 25% in the period, and we
have seen the strong performance in solar and investment in people already
impact trading and produce a record quarterly revenue for Q3.
The new, simplified eEnergy business model with a strengthened balance sheet
During the period the separation from the Energy Management Division was
executed. With the businesses having previously been fully integrated, the
separation process has been challenging. It has involved the completion of the
ERP implementation in parallel to carving out a standalone accounting system
and building independent infrastructure and platforms.
This has ultimately led to a disruptive period of change which management have
embraced as a one off opportunity to restructure the remaining Energy Services
Division and to provide a strong, scalable platform for growth.
To achieve this, we have invested in the people and technology that will drive
growth, particularly to support a step-change in Solar. We have strengthened
our management team and are pleased to have Nick Clark join us as a full-time
COO, a new senior management role. He brings extensive expertise and a proven
track record in successful operational growth and will be instrumental in
driving eEnergy forward.
The receipt of the initial £25 million for the Energy Management Division has
significantly strengthened our balance sheet, removing previous constraints
and repaying substantially all debt. Our strong financial position has been
enhanced by our innovative funding facility with NatWest which we are now
drawing down on regularly. We now have the working capital to tender for much
larger multi-million pound contracts and can consequently secure improved
terms from our supply chain.
As we look to pivot to healthcare and frameworks agreements, we intend to
leverage our financing capabilities, with our platform, technology, and
systems receiving investment to help scale up. During the period we
strengthened our frameworks capability to complement our direct sales
resources. This has required investment in the processes and technology to
on-board with selected frameworks across different segments of the public
sector.
The market and the opportunity
During the energy crisis in 2022 there was a surge in demand and the market
was set for an acceleration of energy transition projects. Instead however,
the market took a pause and as a result we have seen a reduction in momentum
during the latter part of 2023 and into early 2024. This pause was driven by
falling energy prices, increasing costs of capital, and the cost increases
across the supply chain.
However, we saw the market strengthen towards the end of the period H1 FY24
and we believe the future trajectory is now strong. Renewables continue to
dominate and solar, in particular, is set for significant expansion due to its
decreasing levelised cost of energy (LCOE) (a measure of the cost of energy
generated by a system). Electric vehicle (EV) adoption is also accelerating
and is projected to account for a larger share of global car sales, increasing
the potential addressable market.
This strong momentum from the end of our first half has continued. The new
government is preparing to drive Net Zero more actively as one of its levers
for growth. The public sector, we believe, will lead this activity and we are
already seeing public sector clients signing up to more flexible financing
arrangements which can allow them to adopt our products and services with no
upfront capital expenditure.
With the market still volatile, customers are looking for security and
stability of energy supply. This is driving demand for onsite generation, and
the opportunity is greater than we previously anticipated. Currently, the
market is thinly served, with large barriers to entry and we are now well
placed to capture the opportunities created by limited competition.
Currently, customers have more than one energy transition driver, a
combination of environmental, economic and technological factors all
contribute towards customers' net zero requirements. Customers are always
looking to reduce costs and, move to cleaner and more sustainable energy
sources, all whilst reducing reliance on the grid. eEnergy seeks to take
advantage of the preference for one partner that can execute multiple
solutions simultaneously. The starting point comes with the need for energy
insights as organisations start to report their carbon footprints and the
changes they're delivering.
As a nation, we are facing a combination of challenges: climate change, an
unpredictable energy market and the ongoing effects of the cost-of-living
crisis. Our aim is to highlight both the challenges and opportunities at hand
to drive greater awareness. Over the last 12 months, we have commissioned
independent research to ascertain the addressable market in healthcare and
education. The reports identified the large opportunities within these
sectors. The remaining addressable education market is 65% which management
believe values the opportunity ats c. £2 billion, with a 50% remaining
addressable market in the NHS alone for LED lighting.
Results
The business had a slow start to the year and experienced significant
disruption and change through the Disposal process and subsequent separation.
In particular, the majority of Q1 2024 was a period where the business
continued to be hampered by a weak balance sheet and, as previously
highlighted, this was exacerbated by weak market conditions. Lower energy
prices and higher costs of finance led to lengthened customer decision-making
cycles, culminating in a delay in contract signings.
During the six month period to 31 June 2024, Core Revenues(1) were £6.0
million, down from £11.0 million in H1 2023 (pro forma(2)), and Core Adjusted
EBITDA(1) moved to a loss of £2.0 million, year-on-year on a like-for-like
basis.
In February 2024, the Disposal was completed for £29.3 million. The net
proceeds from the Disposal are being used to reinvest into the Company's high
growth Energy Services Division and substantially all the Group's previous
debt facilities of £8.1 million have now been repaid. Additional contingent
consideration, expected at the time of completion to be between £8 million
and £10 million, will also be due to the Company, based on the trading
performance of the Energy Management Division for the period to 30 September
2025.
In March, we announced the new £40 million Project Funding Facility with
NatWest ("the Facility"), to finance energy efficiency and onsite generation
technologies for the Group's public sector customers. The Facility is a new
financing solution created by both parties and designed exclusively for the
funding of public sector energy transition projects across the full range of
eEnergy products. The Board believes that the Facility gives eEnergy a unique,
compliant off balance sheet solution for public sector customers and will
strengthen eEnergy's competitive position in tendering for large multi-site
contracts.
We see growth opportunities across all areas of the business, especially for
solar multi-site opportunities, and via frameworks, within the public sector.
Board
Following the Disposal, the Company announced a board restructure to reflect
the simplified business. John Foley stepped down from the board and his role
as Non-Executive Chair. Andrew Lawley, previously Non-Executive Director, was
appointed Non-Executive Chair. David Nicholl, previously Non-Executive
Director, also stepped down from the board, but has however remained as an
adviser to the board.
Following the disposal of the Energy Management Division and consistent with a
shift in the Group's strategy away from M&A, it has been agreed that
Crispin Goldsmith will step-down as CFO. The Board would like to thank Crispin
for his contributions to the growth of the business, including the build-out
and subsequent disposal of the Energy Management Division, and wishes him well
for the future.
The Board are pleased to announce the appointment of John Gahan who will take
over the role of Group CFO from 1 October 2024.
Outlook
We have strong momentum in the business and the market conditions continue to
improve. We entered H2 FY with a robust contracted forward order book, and I
am pleased to say we have had a record quarterly revenue forecasted by
management for Q3 of £9.2 million, which reflects a strong performance in
solar division and investment in people.
The security of supply and the race to Net Zero are back as a priority across
the UK. With the increase of energy transition drivers, we are seeing a
particular increase in demand for energy insights and Solar to provide energy
stability for businesses and organisations. Additionally, we have already
started to see the impact of the favourable new government policies and a
reform of regulations in the public sector, with the reduction of red tape.
After a time of investment post the Disposal, the Board is excited by the
opportunities presented to eEnergy and believes that we have the platform and
resources in place to take full advantage of these, beginning in the remainder
of this financial year. As a result, despite the challenges of the first half,
we are maintaining full year revenue guidance of £25 million - £26 million.
The Board would like to note that this is linked to a high volume of projects
scheduled for installation towards the end of the year when timing of project
delivery can be exposed to adverse weather conditions in the short-term. Any
variation in revenue for the full year would be expected to have a
corresponding impact on earnings. We look forward to a busy second half.
Harvey Sinclair
Chief Executive
30 September 2024
CFO Statement
Group key performance indicators
6-months to 6-months to June '23
June '24 (pro forma(2))
£'000 £'000
Core Revenue(1) 6,020 11,020
Core Adj. EBITDA(1) (before Central costs) (1,104) 1,275
Core Adj EBITDA(1) (before Central costs) % (18.3)% 11.6%
Core Adj EBITDA(1) (after Central costs) (2,048) 461
Cash & cash equivalents (exc. restricted balances) 5,989 597
Net Cash / (Debt) (excl. of IFRS16) 5,959 (7,433)
(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.
(2) 'pro forma' means on a like-for-like basis, for the comparative period 1
January to 30 June 2023 adjusted for the sale of the Energy Management
Division.
Financial results presentation
The sale of the Energy Management Division was completed on 9 February 2024
and, as a result, the Energy Management Division prior to completion is
classified as 'held for sale' as required by statutory reporting standards.
The Energy Management Division, prior to disposal, consisted of the businesses
and operations of Beond (acquired December 2020), UtilityTeam (acquired
September 2021) and MY ZeERO (acquired in stages from April 2021).
Following the divestment, the Energy Services Division represents the
continuing customer-facing activities of the Group encompassing Energy
Reduction Services, Energy Generation Services and EV Charging Services.
Summary performance
It was a challenging period, with the business continuing to be hindered by a
constrained balance sheet in Q1 2024, heightened by weak market conditions as
previously reported. The business therefore had a slow start to the year and
experienced significant disruption and change through the Energy Management
Division disposal process and subsequent separation.
H1 FY24 was focused on separating the fully integrated Energy Management
Division. This involved carving out a standalone accounting system as well as
implementing a new ERP system, which started during FY23, allowing the Company
to build an independent infrastructure and platforms.
Management have also taken the opportunity to restructure the operating
platform of the Energy Services business to ensure a strong foundation to
drive long-term, scalable revenue and earnings growth with improving margins.
This has involved a strengthening of the management team, a focus on solar
operations to enable scale, completion of the finance transformation process
started during FY23, along with investment in technology and systems.
The business has also pivoted to driving sales through frameworks and
healthcare to complement the existing direct sales channel.
Whilst the Company has made substantial operational progress in recent months,
the significant changes have impacted the H1 FY24 trading results for the
Energy Services business. However the results themselves mask the substantial
operational progress made during the period, described in the CEO's Review.
Energy Services Results
Revenue for the period of £6.0 million was down from £11.0 million for the
six-month period to 30 June 2023 on a like-for-like basis.
As solar revenues have increased, accounting for 34% of revenues in H1 FY24,
blended margins have reduced, reflecting the typically lower product margins
for this part of the business. This effect was exacerbated by the effects of
the balance sheet constraints, in particular from projects completed in the
period which had been started prior to the end of FY23. As a result, gross
margins for H1 FY24 were 19.2%, down from 32.5% in H2 FY23.
Underlying product margins showed strong improvement during Q2 2024, and
continuing into Q3 2024, as a result of management actions on pricing and
supply chain (securing improved terms from suppliers). Energy Services margins
are therefore expected to show strong recovery during H2 FY24 despite the
increasing mix of solar revenues.
Weaker margins and investment in the management and operational team, in
particular to support the strong solar growth, contributed to the Adjusted
EBITDA loss of £(2.0) million down from (positive) £0.5 million for the
six-month period to 30 June 2023).
Market conditions recovered strongly during the Period, with £14.6
million of new contracts signed which represents an increase of 11% on H1
FY23 (£13.2 million). As at end September 2024 the business benefitted from a
revenue forward order book (contracted future revenues) of £7.6 million of
which £6.4 million was expected to convert to revenue during FY24.
Group Restructure
During the period we have strengthened the management team, with the
appointment of Nick Clark as Chief Operating Officer, together with additional
experienced frameworks personnel.
We have completed the finance transformation process which started during FY23
and have invested heavily in technology and systems. Costs have been incurred
in executing the separation from the Energy Management Division, which has
involved carving out a standalone accounting system for the remaining
business.
We have also reviewed the Group plc structure to right-size it for the
remaining business.
As a result, exceptional costs of £1.9 million have been charged to the
Profit & Loss account in relation to these activities in the period. This
includes a modest profit recognised on disposal of the Energy Management
Division.
Cash Flow and Balance Sheet
H1 FY24 cash flow reflects a period of operating loss and the restructuring
and post-Disposal separation undertaken in the Period.
Investment has also been made, having established the innovative £40 million
project funding facility with NatWest to support funding of public sector
energy transition projects across the full range of eEnergy products.
Most notably, the sale of the Energy Management Division in February 2024
enabled the Group to repay £8.2 million of third party borrowing.
As a result, Net Cash stood at £6.0 million at 30 June 2024, compared to a
Net Debt position of £7.4 million at 31 December 2023.
FY24 Outlook
The latter half of H1 FY24 was positively impacted by improving market
conditions and the refreshed focus on the race to Net Zero. This is reflected
in strong sales for the second half of the Period and the significant forward
order book of £15.0 million coming into H2 FY24.
This gives us a strong platform for delivery during Q3 2024 which resulted in
a record quarter for revenue generation for the Energy Services business.
Whilst the Board is pleased to maintain full year revenue guidance at £25
million - £26 million, it notes that this is linked to a high volume of
projects scheduled for installation towards the end of the year when timing of
project delivery can be exposed to adverse weather conditions in the
short-term. Any variation in revenue for the full year would be expected to
have a corresponding impact on earnings.
Crispin Goldsmith
Chief Financial Officer
September 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2024
Note 6 months to 6 months to 30 June 2023
30 June 2024
£'000
£'000
Continuing operations
Revenue from contracts with customers 6,020 11,020
Cost of sales (4,864) (7,441)
Gross profit 1,156 3,579
Operating expenses (5,499) (3,906)
Included within operating expenses are:
- Share Based Payments 5 278 274
- Other exceptional items 5 2,017 514
Adjusted operating expenses (3,204) (3,118)
Adjusted losses earnings before interest, taxation, depreciation and (2,048) 461
amortisation
Losses before interest, taxation, depreciation and amortisation (4,343) (327)
Depreciation and amortisation (245) (757)
Finance costs - net (345) (873)
(Loss) before taxation (4,933) (1,957)
Income tax (207) (635)
(Loss) for the year from continuing operations (5,140) (2,592)
Discontinued operations
(Loss) / Profit after tax from discontinued operations disposed of during the 4 (3) 2,611
period
(Loss) / Profit for the year (5,143) 19
Attributable to:
Owners of the company (5,140) (2,620)
Owners of the company - non continuing (3) 2,611
Non-controlling interest - 28
(5,143) 19
Other comprehensive income - items that may be reclassified subsequently to
profit and loss
Translation of foreign operations 53 116
Total other comprehensive profit 53 116
Total comprehensive (loss) profit for the year (5,090) 135
Total comprehensive profit (loss) attributable to:
Owners of the company (5,087) (2,620)
Owners of the company - non continuing (3) 2,611
Non-controlling interest - 28
(5,090) 19
Basic (loss) earnings per share from continuing operations 6 (1.31) (0.76)
Diluted (loss) earnings per share from continuing operations 6 (1.31) (0.76)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
Note As at As at
30 June 2024
31 December 2023
£'000
£'000
NON-CURRENT ASSETS
Property, plant and equipment 264 292
Intangible assets 7 3,586 3,465
Right of use assets 504 502
Trade and other receivables 7,076 818
Deferred Tax Asset - 1,138
Total non-current assets 11,430 6,215
Inventories 225 177
Trade and other receivables 12,065 14,418
Cash and cash equivalents 5,989 597
18,279 15,192
Disposal group classified as held for sale - 34,997
Total current assets 18,279 50,189
TOTAL ASSETS 29,709 56,404
NON-CURRENT LIABILITIES
Lease liability 357 384
Deferred tax liability - 944
Total non-current liabilities 357 1,328
CURRENT LIABILITIES
Trade and other payables 10,112 15,203
Lease liability 220 189
Borrowings 8 30 8,030
Total current liabilities 10,362 23,422
Disposal group classified as held for sale - 7,852
10,362 31,274
TOTAL LIABILITIES 10,719 32,602
NET ASSETS 18,990 23,802
Equity attributable to owners of the parent
Issued share capital 16,494 16,494
Share premium 49,319 49,319
Other reserves 2,295 2,017
Reverse acquisition reserve (35,246) (35,246)
Foreign currency translation reserve (146) (199)
Accumulated losses (13,726) (8,583)
Total equity attributable to owners of the parent 18,990 23,802
Non-controlling interest - -
Total equity 18,990 23,802
CONSOLIDATED STATEMENTS OF CASHFLOWS
For the period ended 30 June 2024
Period to 30 June 2024 Period to
£'000
30 June 2023
£'000
Cash flow from operating activities
Operating Losses (Losses Before Interest and Tax) (4,588) (1,084)
Depreciation and amortisation 245 757
EBITDA Continuing Operations (4,343) (327)
EBITDA Discontinued Operations (197) 2,591
EBITDA (4,540) 2,264
Adjustments for:
Other non-cash working capital adjustments 194 (867)
Share based payment 278 274
Operating cashflow before working capital movements (4,068) 1,671
(Increase) in trade and other receivables (4,366) (2,996)
(Decrease) / increase in trade and other payables (5,697) 2,443
Decrease / (increase) in inventories 206 (376)
Decrease in net accrued / deferred income 2,502 351
Net cash outflow inflow from operating activities (11,423) 1,093
Cash flow from investing activities
Proceeds on the sale of energy management division 25,000 -
Expenditure on intangible assets (32) (532)
Purchase of property, plant and equipment - (31)
Net cash Inflow / (outflow) from investing activities 24,968 (563)
Cash flows from financing activities
Interest (paid) - (186)
Repayment of lease liabilities (19) (471)
Repayment of borrowings (8,167) (10)
Net cash inflow from financing activities (8,186) (667)
Net increase in cash and cash equivalents 5,359 (137)
Effect of exchange rates on cash 33 (11)
Cash and cash equivalents at the start of the period 597 1,453
Cash and cash equivalents at the end of the period 5,989 1,305
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2024
Share Capital (iii) 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 2022 16,373 47,360 (35,246) 261 (138) (5,985) (77) 22,548
Other comprehensive loss - - - - (61) - - (61)
Loss for the period - - - - - (2,521) - (2,521)
Total comprehensive loss for the period - - - - (61) (2,521) - (2,582)
Issue of shares during the period 105 1,650 - - - - - 1,755
Issue of share for acquisition of subsidiaries (i) 16 309 - - - - - 325
Acquisition of balance of non-controlling interest (ii) - - - 860 - (77) 77 860
Warrants - - - 136 - - - 136
Share based payments - - - 760 - - - 760
Total transactions with owners 121 1,959 - 1,756 - (77) 77 3,836
Balance at 30 June 2023 16,494 49,319 (35,246) 2,017 (199) (8,583) - 23,802
Other comprehensive loss - - - - 53 - - 53
Loss for the period - - - - - (5,143) - (5,143)
Total comprehensive loss for the period - - - - 53 (5,143) - (5,143)
Issue of shares during the period - - - - - - - -
Warrants - - - - - - - -
Share based payments - - - 278 - - - 278
Total transactions with owners - - - 278 - - - 278
Balance at 30 June 2023 16,494 49,319 (35,246) 2,295 (146) (13,726) - 18,990
(i) Issue of share capital (non-cash) for settlement of contingent
consideration, relating to the acquisition of UtilityTeam and acquisition of
minority interests in eEnergy Insights Limited.
(ii) Relates to reversal of put option provision, regarding the step
acquisition of eEnergy Insights Limited, following acquisition of outstanding
share capital.
(iii) Share capital is inclusive of £15,333,000 deferred share capital.
SELECTED NOTES TO THE FINANCIAL INFORMATION
For the six months ended 30 June 2024
Basis of preparation
During the prior period, the Group changed its accounting reference date from
30 June to 31 December and consequently reported on the extended 18 month
period ended 31 December 2023. The comparatives of this report are the 6 month
period ended 30 June 2023, except for the Consolidated Statement of Financial
Position and Changes in Equity, where the comparative is the 31 December 2023.
The condensed consolidated interim financial statements of eEnergy Group
plc (the "Group") for the six month period ended 30 June 2024 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 18 months period ended 31
December 2023, 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 18 months ended 31 December
2023 have 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.
Basis of preparation - going concern
The interim financial statements have been prepared under the going concern
basis.
At 30 June 2024 the Group had cash reserves of £5,989,000 (31 December 2023:
£597,000).
The Directors have a reasonable expectation that the company and Group have
sufficient resources to continue to operate for the foreseeable future.
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, including the current level of
resources and the ability to trade within its available facilities.
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 period and corresponding interim reporting period.
3. 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 period ended 30 June 2024 the Group had
two operating segments, being Energy Services and Group, noting that during
the period the Group disposed of its Energy Management business segment, hence
the results for this business segment are up until the disposal date of 9
February2024.
Energy Mgmt Energy Services Group Central Group
6 months ended 30 June 2024 £'000 £'000 £'000 £'000
Revenue - UK 1,239 5,768 - 7,007
Revenue - Ireland - 252 - 252
Revenue - Total 1,239 6,020 - 7,259
Cost of sales (282) (4,864) - (5,146)
Gross Profit 957 1,156 - 2,113
Adjusted Operating expenses (1,154) (2,260) (944) (4,358)
Adjusted EBITDA (197) (1,104) (944) (2,245)
Depreciation and amortisation - (58) (187) (245)
Finance and similar charges - (5) (340) (345)
(Loss) before exceptional items (197) (1,167) (1,471) (2,835)
Exceptional items & Share Based Payment Charges* - (1,401) (894) (2,295)
(Loss) before tax (197) (2,568) (2,365) (5,130)
Taxation 194 (13) (194) (13)
(Loss) after tax (3) (2,581) (2,559) (5,143)
EBITDA (197) (2,505) (1,838) (4,540)
Net Assets
Assets 15,117 14,592 29,709
Liabilities (9,972) (747) (10,719)
Net assets 5,145 13,845 18,990
Energy Mgmt Energy Services Central Group
6 months ended 30 June 2023 £'000 £'000 £'000 £'000
Revenue - UK 7,015 9,744 16,759
Revenue - Ireland - 1,276 - 1,276
Revenue - Total 7,015 11,020 - 18,035
Cost of sales (1,252) (7,441) - (8,693)
Gross Profit 5,763 3,579 - 9,342
Operating expenses (3,067) (2,304) (814) (6,185)
Adjusted EBITDA 2,696 1,275 (814) 3,157
Depreciation and amortisation 54 (71) (686) (703)
Finance and similar charges (34) (34) (839) (907)
Profit (loss) before exceptional items 2,716 1,170 (2,339) 1,547
Exceptional items (105) (170) (618) (893)
Profit (loss) before tax 2,611 1,000 (2,957) 654
Taxation credit - - (635) (635)
Profit (loss) after tax 2,611 1,000 (3,592) 19
EBITDA 2,591 1,105 (1,432) 2,264
Net Assets (June 2023)
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
4. DISPOSAL OF ENERGY MANAGEMENT DIVISION
During the period, the Group disposed of its wholly owned Energy Management
division to Flogas Britain Limited for an initial consideration of £29.1
million and additional contingent consideration which was, at the date of
completion, expected to be in the range of £8-£10m, subject to the trading
performance of the Energy Management division for the period to 30 September
2025.
The energy management division within the Group comprised the following
subsidiaries:
• eEnergy Consultancy Limited;
• eEnergy Insights Limited; and
• eEnergy Management Limited.
The results of the Energy Management division disposal of are presented in the
segment note 3.
5. EXCEPTIONAL ITEMS
Operating expenses include items that the Directors consider to be exceptional
by their nature. These items are:
6 month period ended 30 June 2024 6 month period ended 30 June
2023
£'000
£'000
Incremental restructuring and integration costs 1,882 514
Share based payment expense 206 274
Other strategic investments 135 -
Total exceptional expenses 2,223 788
Share based payment expense 72 -
Total of share based payment and exceptional expenses 2,295 788
Share based payments classified as exceptional excludes £72,000 of share
scheme costs awarded in the period. The consolidated income statement Share
Based Payment charge is £284,000 with £206,000 classified as exceptional.
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 and in early 2024 which are being
amortised over their three year vesting period.
Following completion of the disposal of the Energy Management division,
management have undertaken a restructure of the continuing Group in order to
build a strong foundation to drive long-term, scalable revenue and earnings
growth. The costs of this restructuring, together with costs incurred in the
separation from Energy Management and a modest accounting Profit on Disposal,
are classified within 'Incremental restructuring and integration costs'.
6. 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
Period to 30 June 2024 6 month period ended 30 June 2023
(Loss) profit for the year from continuing operations attributable to owners (5,087,000) (2,620,000)
of the Company - £
(Loss) profit for the year - £ (5,090,000) 19,000
Weighted number of ordinary shares in issue 387,224,625 346,779,959
Basic earnings per share from continuing operations - pence (1.31) (0.76)
Weighted number of dilutive instruments in issue - -
Weighted number of ordinary shares and dilutive instruments in issue 438,916,469 398,477,693
Diluted earnings per share from continuing operations - pence (1.36) (0.76)
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 current period as they are anti-dilutive.
7. INTANGIBLE ASSETS
Goodwill £'000 Software £'000 Total
£'000
Cost
At 1 January 2024 3,010 496 3,506
Adjustment to held for sale balances - 187 187
At 30 June 2024 3,010 683 3,693
Amortisation
At 1 January 2024 - (41) (41)
Amortisation in the period - (66) (66)
At 30 June 2024 - (107) (107)
Net book value at 3,010 455 3,465
31 December 2023
Net book value at 3,010 576 3,586
30 June 2024
8. BORROWINGS
30 June 2024 31 December 2023
£'000
£'000
Current
Borrowings 30 8,030
30 8,030
In February 2024, following the disposal of its Energy Management division to
Flogas for an initial adjusted consideration of £25m, the Group repaid
substantially all of its existing bank indebtedness.
9. RELATED PARTY TRANSACTIONS
Key management personnel are considered to the Board of Directors. The amount
payable to the Board of Directors for the period ended 30 June 2024 was £0.8
million (period ended 30 June 2023: £0.9 million).
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