REG - eEnergy Group PLC - Results for the six months ended 31 December 2022
28/03/2023 07:15
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RNS Number : 3878U eEnergy Group PLC 28 March 2023
28 March 2023
eEnergy Group plc
("eEnergy" or "the Group")
Results for the six months ended 31 December 2022
eEnergy Group plc (AIM: EAAS), the net zero energy services provider, is
pleased to announce its interim results for the six months ended 31 December
2022.
Financial Highlights
· Revenue up 58% to £15.1 million (HY21: £9.6 million)
- Energy Management revenues of £6.6 million (HY21: £4.8 million)
- Energy Services revenues of £8.5 million (HY21: £4.8 million)
· Adjusted EBITDA ((1) ) up 87% to £1.5 million (HY21: £0.8 million)
· Profit before tax of £0.4 million (HY21: loss of £1.0 million)
· Profit before tax and exceptional items( ) of £0.7 million (HY21: £0.2
million)
· Contracted future revenues increased 45% to £26.4 million at 31 December 2022
(31 December 2021 £18.3 million)
· Cash £1.1 million (FY22: £1.4 million) excluding £0.4 million of restricted
cash balances (FY22: £0.2 million) reflecting scheduled payments of trade
creditors and legacy balance sheet items following drawdown of the new
subordinated debt facility
· As at 24 March 2023, the Group's cash balance was £1.1 million (excluding
restricted cash balances of £0.5 million). This included a payment of £0.5
million received in advance which may, in certain circumstances, be returnable
in May 2023
Operational Highlights
· Key contract renewals and wins comprising healthcare and education trusts as
well as two significant framework agreements
· Launch of eSolar in September 2022 with 12.3 MW under HOT's as at 31 December
2022
· Cross selling proposition continues to improve, with 35% of Energy Service's
TCV signed in H1 FY22 coming from existing customers
Post Period End
· Q3 TCV Values:
- Energy Management £3.2 million
- Energy Services £4.4 million
· Experiencing strong appetite and trading in eSolar
· Stabilised working capital with Net Debt broadly flat during Q3, post period
end
· Appointment of John Foley as Non-Exec Chairman, with David Nicholl moving to
Non-Executive Director
Full Year Outlook
eEnergy continues to grow its pipeline of new business opportunities, both
with existing and new customers. As at 31 December 2022, the Company had
contracted forward revenues ("Forward Order Book"), of £26.4 million over
four years (up 45% on HY21). Of the Forward Order Book, £8.8 million is
expected to be recognised as revenue in H2 FY23 and £6.8 million recognised
in FY24.
The working capital position has been stabilised during Q3 as a result of
management actions and the Board are expecting healthy conversion of earnings
to operating cashflow for H2 as a whole. As at 24 March 2023, the Group's cash
balance was £1.1 million (excluding restricted cash balances of £0.5
million). This included a £0.5 million payment received in advance which may,
in certain circumstances, be returnable in May 2023.
The first months of H2 trading have been strong as we win new clients and
cross selling opportunities within our existing client base continues to bear
fruit. Contract wins during Q3 give improving visibility on the remaining
three month outlook for FY23, and the Board remains optimistic to deliver full
year trading expectations. As previously stated, interest expense for the year
will reflect the drawdown of the subordinated debt facility.
Harvey Sinclair, CEO of eEnergy, commented : "eEnergy continues to make
progress towards making net zero possible and profitable. Following a
transformational year in 2022 bringing our offering under one unified brand,
the first half of the year has seen us grow the business across both Energy
Management and Energy Services. Our financial year is traditionally second
half weighted and based on the new business pipeline and a contracted forward
order book of £26.4 million, with £8.8 million to be recognised in H2, we
remain optimistic to deliver full year trading expectations."
Investor & Analyst presentation
Management will provide a live presentation relating to the interim results
via the Investor Meet Company platform on 28 March 2023 at 11:15am GMT. The
presentation is open to all existing and potential shareholders. Questions can
be submitted at any time during the live presentation. 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)
An online analyst briefing will be held at 10:00am GMT. Analysts wishing to
attend should contact eenergy@tavistock.co.uk to register.
Note: (1) Adjusted EBITDA 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, including the costs incurred in
delivering the 'Buy & Build' strategy associated with acquisitions and
strategic investments, costs of restructuring and transforming acquired
businesses and share-based payments.
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
Singer Capital Markets (Nominated Adviser and Joint Broker) Tel: +44 20 7496 3000
Justin McKeegan, Asha Chotai, James Maxwell (Corporate Finance)
Tom Salvesen (Corporate Broking)
Canaccord Genuity Limited (Joint Broker) Tel: +44 20 7523 8000
Max Hartley, Tom Diehl (Corporate Broking)
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
H1 FY23 has continued to build on what was a transformational FY22 for eEnergy
when further investment was made in the business and the Company's business
divisions unified under a single eEnergy brand. The board believes that the
business is at an inflection point which has been escalated at a quicker rate
due to the long term increase in energy prices, the increase in appetite for
net zero solutions in conjunction with the need for improved energy security.
This is evidenced by an increase in our sales both from new customers and
improving our cross selling rates to existing clients following the
establishment of a more integrated proposition last year.
Energy Market
According to the International Energy Agency, the increase in wholesale
electricity prices in 2022 was most prominent in Europe, where on average,
prices were more than twice as high as in 2021. The mild winter so far in
2022/23 has helped ease wholesale electricity prices, aided by sustained
liquefied natural gas inflows and sufficient gas storage inventories. However,
this status of the global gas balance is delicate and there are a number of
uncertainties in the short term for the rest of 2023.
These now established tailwinds continue to provide eEnergy with significant
opportunities to continue its growth trajectory as organisations globally
mitigate energy costs and accelerate a move to, not just Net Zero, but to
improve their security by establishing energy independence away from the grid.
Results
Revenue increased by 58% to £15.1 million, up from £9.6 million in the prior
year, with Energy Management and Energy Services contributing £6.5 million
and £8.5 million respectively. Adjusted EBITDA was up 87% to £1.5 million in
comparison to £0.8 million in HY21.
Both Energy Services and Energy Management have seen significant contract and
framework wins during the period. We continue to win significant opportunities
with education trusts to support their net zero strategies with contracts for
lighting services, on-site generation services with eSolar and management
through My ZeERO.
In addition we are increasing our presence in new segments with a particular
focus on healthcare.
Following the successful launch of eCharge in March and later eSolar in
September 2022, eEnergy has seen increasing levels of appetite from its
customers for on-site generation services through its capital free Electrical
Vehicle ("EV") charging and solar energy offerings. In addition, eCharge has
secured a contract, to install 70 chargers across 35 locations across the UK
with a new customer.
In November 2022, eEnergy announced that it had raised £2.5 million through
the issue of a new sub-ordinated debt facility from exiting shareholder, Hawk
Investment Holdings, and a new strategic investor, FFIH, and all Directors of
the company, used to fund additional Energy Services working capital as a
result of lengthened cash collection cycles as well as funding the next phase
of MY ZeERO stock-build, other balance sheet liabilities and general working
capital. This allowed eEnergy to tackle a tightened liquidity position and to
support further growth of the business and continued investment in the
Company's market leading platform.
Strategy
eEnergy's new clear and integrated product and service offering remains key to
delivering on our core strategy of making net zero possible and profitable
businesses and organisations, without the need for capital investment. The
Company's integrated end-to-end solution driven platform, which include market
leading digital products, underpinned by its Energy-as-a-Service model, make
it easier than ever before for an organisation to transition to Net Zero.
While new customer acquisition remains central to the Company's growth
strategy, in the last 12 months we have established an integrated cross
selling platform, promoting additional products and services to eEnergy's
existing 2,000 strong customer base. This allows for increased re-occurring
revenues streams at an improved margin, giving greater long term revenue
visibility and predictability.
The Board welcomes John Foley as new Non-Executive Chair to eEnergy. John is a
barrister and chartered accountant who has served on a number of public and
private company boards. He was CEO of MacLellan Group plc, a UK facilities
management provider, for 12 years. He was co founder of Premier Technical
Services Group Ltd ("PTSG") a specialist provider of facilities services, and
was its Chairman from inception in 2007 until early November 2022 (he remains
a Non-Executive Director. He is also currently Chairman of SEC Newgate Spa,
the parent company of a global strategic communications and advisory group and
is also Chairman of Servoca Plc, a provider of staffing solutions and
outsourced services.
David Nicholl will continue to make positive contributions to the Board and
Group strategy in moving to the role of Non-Executive Director.
Outlook
The energy crisis, exacerbated by the war in Ukraine has put a spot light on
the UK's energy security, consumption and management. It has never been more
critical for organisations to ensure their ability to mitigate risk,
especially during the cost of living crisis. These market conditions have
driven the awareness of the benefits of energy management both from a cost and
environmental perspective and eEnergy's proposition helps organisations to
navigate these complicated issues.
The Group maintains its cautious optimism while international macroeconomics
continue to be unpredictable. The new business pipeline and forward order book
remain robust and supported by the H2 weighting and, as at 24 March 2023,
there is visibility over 93% of the Full Year revenue expectation. As such,
the board remains optimistic to deliver full year trading expectations. As
previously stated, interest expense for the year will reflect the drawdown of
the subordinated debt facility.
Harvey Sinclair
Chief Executive
28 March 2023
CFO Statement
Group key performance indicators
Period to 31 December 2022 Year to Period to 31 December 2021 Year to
30 June 2022
30 June 2021
£'000 £'000 £'000 £'000
Revenue 15,124 22,096 9,592 13,596
Adj. EBITDA 1,508 3,021 807 830
Adj. EBITDA% 10.0% 13.7% 8.4% 6.1%
Cash & cash equivalents (exc. restricted balances) 1,050 1,380 2,430 3,332
Net Cash / (Debt) (excl. Of IFRS16) (6,567) (3,642) (516) 1,486
Summary performance
H1 FY23 was another period of significant growth for the Group. Revenue of
£15.1 million was up 58% from H1 FY22, driving an 87% increase in Adjusted
EBITDA to £1.5 million and delivering Profit Before Tax of £0.4 million (H1
FY22: £(1.0) million Loss Before Tax).
In November, the Group announced an additional £2.5 million in debt funding
into the business through a new subordinated bond in order to give the
business the working capital headroom to fund additional Energy Services
working capital as a result of lengthened cash collection cycles as well as
funding the next phase of MY ZeERO stock-build, other balance sheet
liabilities and general working capital.
Net debt increased by £2.7 million in the period, reflecting a £3.9 million
increase in working capital. This was largely driven by repayment of legacy
(non-trade) liabilities and increased accrued revenue balances, reflecting the
scale of organic growth and a transition to lengthened cash collection cycles
across both Energy Services and Energy Management.
A number of initiatives were instigated to mitigate this increased working
capital requirement going forward, as a result of which net debt has
stabilised during Q3 with a further £0.8m of legacy liabilities also
settled.
The increase in Net Working Capital also reflected progress in strengthening
the Balance Sheet. During the period £0.9 million of legacy liabilities were
settled and contingent consideration of £0.4 million in relation to the
acquisition of Utility Team was satisfied, primarily for shares rather than
cash, with the balance of £0.5 million written back to the Balance Sheet.
As at 24 March 2023, the Group's cash balance was £1.1 million (excluding
restricted cash balances of £0.5 million). This included a payment of £0.5
million received in advance which may, in certain circumstances, be returnable
in May 2023.
Divisional Performance
Energy Services
The strong momentum in new contract wins built during H2 FY22 converted into
accelerated revenue growth in H1 FY23, delivering revenues of £8.5 million,
an impressive 79% up on the same period last year.
Strong execution and focus on cost management delivered a 60bps improvement in
Gross Margins to 38.4%, despite inflationary pressures across the economy. We
segment Energy Services into three verticals - Measure (primarily MY ZeERO),
Reduce (primarily lighting) and Connect (eSolar and eCharge). Budgeted Gross
Margins vary from 50% in Measure, 34% in Reduce to 30% in Connect.
£10.6 million of new contract signings were delivered during the period,
taking the total to £20.4 million for the calendar year 2022, double that for
calendar year 2021. This accelerating momentum has continued into Q3.
The Group has built a strong pipeline of Solar opportunities over the last 12
months and had12.3 MW under Heads of Terms as at 31 December 2022. Lead times
on Solar projects are long given the number of stakeholders involved and
consents required. After a long development cycle these projects are now
poised to accelerate growth during Q4 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 8% was boosted by annualisation of the
Utility Team acquisition (completed September 2021) to record overall 37%
growth year-on-year to £6.6 million for the half-year, with EBITDA up 19% to
£1.7 million.
The Board believes that the quality of earnings in this business unit are
strong, with 95% of revenue from commissions paid by energy suppliers linked
to long-term customer supply contracts at a 77% budgeted Gross Margin.
A key part of the integration has been a focus on service delivery. The Group
has invested in both the team and delivery platform to ensure a best-in-class
customer experience through the life of the relationship which will maintain
and enhance retention rates as well as giving a differentiated proposition for
new business acquisition. This investment has led to a temporary reduction in
the EBITDA margin to 25.9% in the period (from 29.8% for H1 FY22) which is
expected to normalise in H2.
Cash Flow and Working Capital
Net cash outflow from operating activities for the period was £2.0 million
(H1 FY22 net cash outflow of £3.2 million).
There were two key drivers of this operating cash outflow. First, the
repayment of £0.9 million of legacy (non-trade) liabilities which is planned
to conclude during H2. Second, the scale of organic growth led to an increase
of £2.5 million in trade working capital, mainly due to an increase in
accrued revenue of £3.3 million.
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.
As discussed in the FY22 Annual Report, the increase has been caused both by
organic growth and through a transition, now-completed, to new payment cycles
in both Energy Management (£2.5 million impact) and Energy Services (£0.7
million impact). This was accentuated by seasonal delays to receipts over the
Christmas period.
There was also a largely non-cash reduction of £0.9 million in contingent
consideration, relating to the acquisition of Utility Team.
Cash flow in the period also reflected £0.5 million investment in developing
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 during H1, outlined below, have
stabilised working capital during Q3 FY23 and, together with the completion of
legacy liability repayments during Q4, are expected to deliver strong cash
generation for H2 as a whole.
A focus on improving payment terms from energy suppliers has resulted in 27%
of January and February TCV signed in Energy Management now being invoiced on
signing, up from 2% average for H1 FY23.
Off-balance sheet funding has been secured for the first batch of MY ZeERO
eMeters, giving rise to an expected £0.2m cash benefit during H2 FY23.
In Energy Services, there has been increased demand for Capex (customer-pays)
projects which give a significantly improved cash collection profile to the
Group compared to the zero-capital upfront product. Capex products have
accounted for 45% of Q3 FY23 cash receipts to-date in Energy Services, up from
30% in H1 FY23.
The Group is working with a number of funding partners with the aim of
improving cash collection cycles on funded projects.
Diversification of supply chains across the business, aimed at reducing
concentration risk and mitigating inflationary pressures, have also had a
secondary benefit of delivering additional working capital capacity.
Borrowings and Funding
The increase in Net Working Capital during H1 was financed through the issue
of £2.5 million of subordinated bonds in November 2022.
Post period end, improved operating cash flow has contributed to a stabilised
net debt position during Q3 FY23. Between 1 January and 24 March 2023 there
was a modest increase of £0.1 million of net debt (to £6.7 million,
including unrestricted cash of £1.1 million), after a further £0.8 million
reduction in legacy liabilities. This compares to a £2.9 million increase in
H1 FY23, £3.3 million increase in H2 FY22 and £1.8 million in H1 FY22. The
Board believes this marks substantial progress.
The pricing and structure of the subordinated bonds reflect the fact that they
are intended to be short-term in nature, with the Board expecting the Group to
deliver a healthy conversion of operating profit to operating cashflow going
forward.
Under the guidance of the new Chairman, the Board is addressing the structure
of the Group's capital base and borrowing facilities.
H2 FY23 Outlook
Momentum across both parts of the business means that, going into Q4, the
Group is well positioned to meet the Board's expectations for the full-year
out-turn. As at 24 March there is good visibility on 93% of the Full Year
revenue expectation.
Energy Services continue to benefit from accelerating momentum and are
strengthening their presence in attractive new market segments.
Continued investment in capabilities and infrastructure is delivering an
enhanced customer proposition and user experience, supporting retention and
new business wins.
Revenue growth during H2 FY23 is expected to be supported by positive revenue
impact from eCharge and eSolar, launched during 2022, which leverage the
existing Group cost base.
A substantial improvement in operating margins is expected from H1 FY23 to H2
FY23 as a result of operating efficiencies delivered during H1 FY23 and the
benefits of operational gearing.
Crispin Goldsmith
Chief Financial Officer
28 March 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 31 December 2022
Note Period to Period to Year to 30 June 2022
31 December 2022
31 December 2021
£'000
£'000 £'000
Continuing operations
Revenue from contracts with customers 15,124 9,592 22,096
Cost of sales (6,781) (4,067) (9,131)
Gross profit 8,343 5,525 12,965
Operating expenses (7,085) (5,911) (12,233)
Included within operating expenses are:
- Other exceptional items 4 250 1,193 2,289
Adjusted operating expenses (6,835) (4,718) (9,944)
Adjusted earnings before interest, taxation, depreciation and amortisation 3 1,508 807 3,021
Earnings before interest, taxation, depreciation and amortisation 1,258 (386) 732
Depreciation and amortisation (684) (401) (2,636)
Finance costs (143) (227) (323)
Profit / (Loss) before taxation 431 (1,014) (2,227)
Income tax Credit 150 - 736
Profit / (Loss) for the year from continuing operations attributable to the 581 (1,014) (1,491)
owners of the company
Attributable to:
Owners of the company 3 617 (932) (1,431)
Non-controlling interest (36) (82) (60)
581 (1,014) (1,491)
Other comprehensive income - items that may be reclassified subsequently to
profit and loss
Translation of foreign operations (105) 107 (125)
Total other comprehensive (loss) / profit (105) 107 (125)
Total comprehensive profit / (loss) for the year 476 (907) (1,616)
Total comprehensive profit / (loss) attributable to:
Owners of the company 512 (825) (1,556)
Non-controlling interest (36) (82) (60)
476 (907) (1,616)
Basic and diluted earnings (loss) per share from continuing operations 5 0.15p (0.31)p (0.44)p
attributable to owners of the company
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
Note As at As at
31 December 2022
30 June 2022
£'000
£'000
NON-CURRENT ASSETS
Property, plant and equipment 417 458
Intangible assets 6 28,666 28,733
Right of use assets 642 777
Deferred Tax Asset 1,071 1,071
Total non-current assets 30,796 31,039
Inventories 745 809
Trade and other receivables 19,946 16,022
Financial assets at fair value through profit or loss 21 21
Cash and cash equivalents 8 1,453 1,802
Total current assets 22,165 18,654
TOTAL ASSETS 52,961 49,693
NON-CURRENT LIABILITIES
Lease liability 206 399
Borrowings 7 7,356 5,011
Other non-current liabilities 2,431 2,252
Deferred Tax Liability 1,169 1,318
Provisions 786 860
Total non-current liabilities 11,948 9,840
CURRENT LIABILITIES
Trade and other payables 16,607 16,802
Lease liability 492 492
Borrowings 7 261 11
Total current liabilities 17,360 17,305
TOTAL LIABILITIES 29,308 27,145
NET ASSETS 23,653 22,548
Equity attributable to owners of the parent
Issued share capital 16,386 16,373
Share premium 47,667 47,360
Other reserves 570 261
Reverse acquisition reserve (35,246) (35,246)
Foreign currency translation reserve (243) (138)
Accumulated losses (5,368) (5,985)
Total equity attributable to owners of the parent 23,766 22,625
Non-controlling interest (113) (77)
Total equity 23,653 22,548
CONSOLIDATED STATEMENTS OF CASHFLOWS
For the six month period ended 31 December 2022
Period to 31 December 2022 Period to 31 December 2021 Year to
£'000
£'000
30 June 2022
£'000
Cash flow from operating activities
Operating profit / (loss) - continuing operations 581 (1,014) (1,491)
Adjustments for:
Depreciation and amortisation 684 401 2,636
Finance cost (net) 143 158 264
Taxation (150) - -
Share based payment 309 170 520
Share of loss in associate - 30 -
Foreign exchange movement - 12 -
Gain on derecognition of contingent consideration (448) - (1,032)
Operating cashflow before working capital movements 1,119 (243) 897
(Increase) / decrease in trade and other receivables (3,906) 65 (9,857)
(Decrease) / increase in trade and other payables 664 (2,612) 165
Decrease / (increase) in inventories 68 (42) (95)
Decrease / (increase) in deferred income 53 (414) 2,650
Net cash (outflow) / (2,002) (3,246) (6,240)
inflow from operating activities
Cash flow from investing activities
Cash acquired on acquisition of business - 2,800 4,007
Cash paid to acquire subsidiaries - (10,582) (11,081)
Expenditure on intangible assets (535) (457) (401)
Purchase of property, plant and equipment (93) (117) (294)
Net cash (outflow) from investing activities (628) (8,356) (7,769)
Cash flows from financing activities
Interest (paid) received (130) (97) (188)
Repayment of lease liabilities (39) (109) (347)
Net proceeds from the issue of shares - 11,382 11,382
Net proceeds from loans and borrowings 2,445 - 4,891
Repayment of borrowings - (333) (3,287)
Net cash inflow from financing activities 2,276 10,843 12,451
Net decrease in cash and cash equivalents (354) (759) (1,558)
Effect of exchange rates on cash 5 15 28
Cash and cash equivalents at the start of the period 1,802 3,332 3,332
Cash and cash equivalents at the end of the period 1,453 2,588 1,802
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2022
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 2022 16,373 47,360 (35,246) 261 (138) (5,985) (77) 22,548
Translation of foreign operations - - - - (105) - - (105)
Profit for the period - - - - - 617 (36) 581
Total comprehensive loss for the period - - - - (105) 617 (36) 476
Issue of shares during the period 13 307 - - - - - 320
Share based payments - - - 309 - - - 309
Total transactions with owners 13 307 - 309 - - - 629
Balance at 31 December 2022 16,386 47,667 (35,246) 570 (243) (5,368) (113) 23,653
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2021
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
Translation of foreign operations - - - - 107 - - 107
Loss for the period - - - - - (932) (82) (1,014)
Total comprehensive loss for the period - - - - 107 (932) (82) (907)
Shares issued during the period 296 14,771 - - - - - 15,067
Cost of share issue - (618) - - - - - (618)
Share based payments - - - 170 - - 170
Acquisition of new entity - - - - - - (241) (241)
Total transactions with owners 296 14,153 - 170 - - (241) 14,378
Balance at 31 December 2021 16,367 47,167 (35,246) 771 94 (5,486) (323) 23,344
SELECTED NOTES TO THE FINANCIAL INFORMATION
For the six month period ended 31 December 2022
1 Basis of preparation
The condensed consolidated interim financial statements of eEnergy Group plc
(the "Group") for the six month period ended 31 December 2022 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 2022
prepared under IFRS 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 31 December 2022 the Group had unrestricted cash reserves of £1.1m (30
June 2022: £1.4m; 31 December 2021: £2.4m).
The Directors have a reasonable expectation that the company and Group have
sufficient resources to continue to operate for the foreseeable future. The
Group has shown significant improvement in revenue and operating
profitability. To help facilitate the growth of the company, and finance
working capital, the company raised £2.5m of additional funding in November
2022.
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 the terms and covenants of its loan
facility.
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.
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. Management has determined the operating segments based on the reports
reviewed by the Board.
The Board considers that during the six month period ended 31 December 2022
and 31 December 2021, the Group operated in two business segments, the Energy
Management segment and the Energy Services segment, which largely comprised of
LED lighting solutions.
Energy Mgmt Energy Services Central Group
2022 £'000 £'000 £'000 £'000
Revenue - Total 6,604 8,520 - 15,124
Cost of sales (1,532) (5,249) - (6,781)
Gross Profit 5,072 3,271 - 8,343
Operating expenses (3,359) (2,291) - (5,650)
Operating EBITDA 1,713 980 - 2,693
Central management costs - - (1,185) (1,185)
Adjusted EBITDA 1,713 980 (1,185) 1,508
Depreciation and amortisation (401) (70) (213) (684)
Finance and similar charges (4) (52) (87) (143)
Profit / (loss) before exceptional items 1,308 858 (1,485) 681
Exceptional items (134) (129) 13 (250)
Profit / (loss) before tax 1,174 729 (1,472) 431
Taxation credit - - 150 150
Profit / (loss) after tax 1,174 729 (1,322) 581
Non-controlling interest (36) - - (36)
Profit / (loss) attributable to owners of the Company 1,210 729 (1,322) 617
Net Assets
Non current assets 26,530 3,862 404 30,796
Current assets 7,644 12,079 2,442 22,165
Assets - Total 34,174 15,941 2,846 52,961
Liabilities (9,849) (10,435) (9,024) (29,308)
Net assets 24,325 5,506 (6,178) 23,653
Energy Mgmt Energy Services Central Group
2021 £'000 £'000 £'000 £'000
Revenue 4,832 4,760 - 9,592
Cost of sales (1,107) (2,960) - (4,067)
Gross Profit 3,725 1,800 - 5,525
Operating expenses (2,298) (1,524) - (3,822)
Operating EBITDA 1,427 276 - 1,703
Central management costs - - (896) (896)
Adjusted EBITDA 1,427 276 (896) 807
Depreciation and amortisation (344) (56) (1) (401)
Finance and similar charges (24) (184) (19) (227)
Profit / (loss) before exceptional items 1,059 36 (916) 179
Exceptional items (139) (63) (991) (1,193)
Profit / (loss) before tax 920 (27) (1,907) (1,014)
Taxation charge - - - -
Profit / (loss) after tax 920 (27) (1,907) (1,014)
Non-controlling interest (82) - - (82)
Profit / (loss) attributable to owners of the Company 1,002 (27) (1,907) (932)
Net Assets
Non current assets 23,269 3,932 4,385 31,586
Current assets 6,878 4,161 524 11,563
Assets - Total 30,147 8,093 4,909 43,149
Liabilities (8,891) (6,167) (4,747) (19,805)
Net assets 21,256 1,926 162 23,344
4. EXCEPTIONAL ITEMS
Operating expenses include items that the Directors consider to be exceptional
by their nature. These items are:
Period to Period to Year to
31 December
31 December
30 June
2022
2021
2022
£'000 £'000 £'000
Acquisition related expenses - 820 1,273
Changes to initial recognition of contingent consideration (448) - (1,032)
Incremental restructuring and integration costs 389 198 1,181
Share based payment expense 309 175 520
Other strategic investments - - 347
Total exceptional expenses 250 1,193 2,289
Acquisition expenses are the costs incurred in completing the "Buy and Build"
strategy associated with acquisitions and strategic investments.
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.
5. 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 31 Dec 2022 Period to 31 Dec 2021 Year to 30 June 2022
Profit / (loss) profit for the year from continuing operations attributable to 617,000 (932,000) (1,431,000)
owners of the Company - £
Weighted number of ordinary shares in issue 350,036,790 304,325,269 323,783,394
Number of shares for diluted earnings per share 417,158,305 - -
Basic earnings per share from continuing operations - pence 0.18p (0.31)p (0.44)p
Diluted Basic earnings per share from continuing operations - pence 0.15p (0.31)p (0.44)p
The comparative periods do not include a diluted earnings per share
calculation, or number of shares for the diluted earnings per share
calculation, since the business was loss-making in those periods.
6. 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 (315) - - - (315)
Additions in the period - 653 - - 653
At 31 December 2022 23,501 1,911 4,311 1,594 31,317
Amortisation
At 1 July 2022 - (219) (433) (1,594) (2,246)
Amortisation in the period - (164) (241) - (405)
At 31 December 2022 - (383) (674) (1,594) (2,651)
Net book value at 23,816 1,039 3,878 - 28,733
30 June 2022
Net book value at 23,501 931 3,637 - 28,666
31 December 2022
7. BORROWINGS
31 December 2022 31 December 2021 30 June 2022
£'000
£'000
£'000
Current
Borrowings 261 579 11
261 579 11
Non-current
Borrowings 7,356 2,367 5,011
7,356 2,367 5,011
In February 2022 the Group refinanced substantially all of its existing bank
indebtedness and consolidated its borrowings into a single £5,000,000, four
year, revolving credit facility provided to eEnergy Holdings Limited, an
intermediate holding company in the Group. The new 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 and is repayable on or before 12 February 2024.
During the current period the Group secured a further £2,525,000 in
subordinated debt which has been structured 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 £3,207,754) on or before 24 May 2024 (in respect of £2,000,000)
and on or before 21 June 2024 (in respect of £525,000).
Maturity of the borrowings as of 31 December 2022 are as follows:
£'000
Current 261
Due between 1-2 years 7,356
Due between 2-5 years -
Due beyond 5 years -
7,617
8. CASH & CASH EQUIVALENTS
Period to 31 Dec 2022 Period to 31 Dec 2021 Year to 30 June 2022
Unrestricted Cash 1,050 2,430 1,380
Restricted Cash 403 158 422
1,453 2,588 1,802
Restricted cash relates to financing arrangements and customer collections.
9. RELATED PARTY TRANSACTIONS
Key management personnel are considered to the Board of Directors. The amount
payable to the Board of Directors for the six months ended 31 December 2022
was £400,509 (31 December 2021: £563,000).
10. EVENTS AFTER THE BALANCE SHEET DATE
Nothing to disclose.
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