REG - eEnergy Group PLC - Trading update

EenergyAnnouncement

30/01/2025 07:00

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RNS Number : 1928V  eEnergy Group PLC  30 January 2025

30 January 2025

 

eEnergy Group plc

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

 

Trading update

 

 Record H22024 revenue and EBITDA

FY2023 accounting adjustments

 

eEnergy (AIM: EAAS), the UK's leading Energy-as-a-Service and
Lighting-as-a-Service business to the education and healthcare sectors,
announces a trading update for the year ended 31 December 2024, together with
an update on the Board's outlook for FY2025. In addition, the Company
announces adjustments to its results for FY2023.

 

H2 2024 Trading update

 

·      H2 delivered record revenue of circa £21.1 million (H22023
restated £10.5 million)

·      Adjusted EBITDA(1) for H22024 of £2.4 million (12% EBITDA margin)

·      Momentum has continued into 2025 with Q1 expected to be another
record quarter with a strong contracted revenue order book of £7.0 million

·      Wins announced in Q4 including appointment to the NHS Commercial
Solutions Sustainable Estates Framework Agreement and a £975,000 LED lighting
contract with Newcastle College Group

·      Strengthening of the Company's financial control environment and
introduction of a sharper focus on operational performance with steps taken to
reduce the fixed cost base of the business

 

FY 2024*

 

·      As a result of a record Q3 and Q4 and the adjustments outlined
below, Revenue in FY2023 increased by £14.4 million to circa £27.1 million
in FY2024

·      Adjusted EBITDA for FY2024 improved by £4.0 million to £0.4
million, compared to the restated £3.6 million annualised EBITDA loss for
FY2023

·      Exceptional charge in FY2024 of circa £4.2(2) million (includes a
non-cash share-based payments charge of £0.6 million), together with costs
associated with the re-organisation of the Group (18 months ended 31 December
2023: Restated Exceptional charge of £5.5 million(1,2) includes a non-cash
share-based payments charge of £0.8 million)

·      Net cash at year end (excluding IFRS 16 liabilities) of £2.3
million with no debt (FY2023: net debt (excluding IFRS 16 liabilities) of
£7.3 million (pre the sale of the Energy Management business))

 

Accounting adjustments

 

Three non-cash adjustments were identified as part of a review of the
accounting in FY2023, which together have been reflected in the restated
annualised FY2023 comparatives as follows:

·      Reported annualised FY2023 revenue of £17.5 million is reduced by
a net £2.0 million to £15.5 million to correctly state project accounting
balances

·      A £2.1 million Exceptional charge within Operating Expenses in
FY2023 to write off unrecoverable debtors as at 31 December 2023 - which
mainly related to the Energy Management business which was sold in February
2024

·      Restated annualised FY2023 revenue of £15.5 million is further
reduced by £2.8 million to £12.7 million and annualised FY2023 gross profit
is reduced by £1.4 million to harmonise accounting revenue recognition in
FY2023

 

* FY2024 results and accounting adjustments subject to completion of audit
process

 

2025 Outlook

 

Following a record H22024 with revenue of circa £21.1 million, our momentum
has continued into Q12025 with a strong contracted revenue order book of £7.0
million (£1.0 million more than the £6.0 million revenue for the whole of H1
2024). The Board is confident of a positive EBITDA result for H12025, which is
typically a weaker period of trading compared to the second half of the year,
driven in part by operational efficiencies and tighter cost controls. As a
result, the Board is confident that the business will deliver significantly
improved EBITDA and cash generation in FY2025.

 

Harvey Sinclair, CEO of eEnergy, commented:

 

"I am pleased to report a return to strong growth for eEnergy. We have
demonstrated our ability to grow revenue, improve gross margin and generate a
significantly improved underlying financial performance.

 

The strong finish to the year saw a successful appointment to
the NHS Commercial Solutions Sustainable Estates Framework Agreement and the
signing of a £975,000 contract with Newcastle College Group to deliver a
full LED lighting conversion across ten buildings in Newcastle and Carlisle
in November 2024. This is evidence of eEnergy's strategy to accelerate energy
efficiency solutions through frameworks, competitive tenders and reducing
sales cycles, while extending our market leading reach within the education
sector to include the university segment.

 

We start FY2025 with a debt free balance sheet, a record forward order book, a
strengthened operational management team, a reduced cost base and are more
focused than ever on improving gross margin and cash generation.

 

We are market leaders in our sector serving education and healthcare
organisations and are well placed to drive further significant growth. The
Board is confident that the business will deliver significantly improved
EBITDA and cash generation in FY2025."

 

 

Note: (1) Adjusted EBITDA

 

Adjusted EBITDA is earnings before interest, tax and depreciation, excluding
exceptional items and share-based payment charge.

 

Note (2) Exceptional items

 

Exceptional Items are those items which, in the opinion of the Directors,
should be excluded from Adjusted EBITDA in order to provide a consistent and
comparable view of the underlying performance of the Group's Energy Services
ongoing business, including the costs incurred in delivering acquisitions, the
sale of businesses, the net gain / (loss) on sale of businesses, costs of
restructuring and transforming acquired / disposed of businesses, together
with the non-cash share-based payments charge.

 

Note: (3) Revenue recognition and accounting error adjustments

 

In FY2024, the Group introduced a more structured revenue recognition policy.
This recognises 30% of project revenue upon contract signing, with the balance
of revenue being recognised only when linked to clear / defined project
milestones. In addition, the Group has amended its policies with regards to
the recognition of project costs against revenue to ensure a more accurate and
prudent basis of reporting. This revised policy reduces the potential for an
overstatement / early recognition of project revenue, and an understatement of
project costs during the life of a project which occurred in FY2023 and prior
periods.

 

The Group has therefore restated prior year comparatives for both revenue and
cost of sales. Additionally, the balance sheet project entries as of 31
December 2023 will be restated to reflect the impact of this change in
accounting policy.

 

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part
of UK domestic law by virtue of the European Union (Withdrawal) Act 2018,
as amended.

 

 

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)

 John Gahan, 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 20 7920 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 providing
customers with energy solutions to reduce their energy usage with LED lighting
and to generate their own electricity using solar power.  Our product
offering avoids the upfront capital cost for the customer of the investment
using a third party funded solution if required by the customer.  eEnergy
provides a feasibility study to its customers to demonstrate the efficacy of
its proposed energy saving and cost reduction solutions.  All of its services
are delivered seamlessly through its project managers based across the UK and
through a central team based in London.

 

eEnergy's customer solutions provide real cash flow savings and cost
reductions through the deployment of energy efficient technology on the
customer premises.  Every project is carefully designed by our in-house team
and installed at a time to suit our customers.  eEnergy is serious about
helping its customers achieve Net Zero.

 

Our primary services include:

·      Reduce: LED lighting and controls

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

·      Charge: EV charging and management software

 

eEnergy is market leader within the UK education sector and has been awarded
the Green Economy Mark by London Stock Exchange in recognition that more than
50% of its revenue is generated from projects that work towards the delivery
of Net Zero.

 

 

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