Acquisition of Wessex EcoEnergy Limited
22/06/2023 07:01
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RNS Number : 5154D Good Energy Group PLC 22 June 2023
22 June 2023
Good Energy Group PLC
("Good Energy" or "the Company")
Acquisition of Wessex EcoEnergy Limited
Good Energy Group PLC (AIM: GOOD), the 100% renewable electricity and energy
services provider, is pleased to announce that it has acquired the entire
issued share capital of Wessex EcoEnergy Limited ("Wessex"), an established UK
based solar installation business (the "Acquisition"), on a debt free, cash
free basis for an initial consideration of £2.5 million.
Building on its acquisition of Igloo Works in December 2022, the Acquisition
represents a further milestone in delivering on Good Energy's strategy to
expand its capability in decentralised energy services, complementing its
established energy supply business and heat pump installation capability. It
also supports Good Energy's ambition to help one million customers cut carbon
by 2025.
Strategic highlights
· Continued progress against Good Energy's ambition to be the UK's
leading provider of green energy services, with the ability to install green
energy infrastructure and provide the best tariffs for the energy produced by
its customers.
· Having established itself as a solar installer since acquiring
Igloo Works, this transaction takes Good Energy's solar installation
capabilities to the next level. The Company is positioned to offer premium
solar installs, benefiting from the ongoing rapid growth in demand for solar
power. The UK solar market has seen near record levels of growth through 2022
as energy prices remained high.
· Installs increased over 125% to 132,000 and this trend has
continued in 2023.
· Domestic installs accounted for 88% of the volumes in 2022, as
people looked to shield themselves from elevated energy costs.
· We anticipate this market is to grow by 9.9% CAGR to 2030.
· Wessex will report under Good Energy services division and
continue to operate under its own brand. Wessex will benefit from now being
able to offer a full energy service package including solar, storage, heat and
export tariffs for its customers. Services will be marketed to both Good
Energy's existing 270,000 customers and new prospects focused in the South
West of England.
· Wessex is a registered MCS, RECC and Tesla Energy Certified solar
installer and service provider, based in Dorchester, for domestic and
commercial customers with an established team of engineers, technicians, and
operations specialists. It has a strong brand predominantly covering the South
West of England and a proven track record of high-quality installs with a 5*
Google review rating. It completed 155 installs in 2022 and following the
acquisition will be targeting 600 panel installations per month within 18
months.
· The Acquisition builds on Good Energy's existing energy service
offering across other product areas including heat, storage and electric
vehicles. Good Energy will seek to accelerate growth in these areas through
further bolt-on acquisitions.
Transaction highlights
· Good Energy has acquired 100% of Wessex's issued share capital
for an initial consideration of £2.5 million, payable in cash on completion
(the "Initial Consideration"). Deferred consideration of up to £1.5m is
payable in cash by Good Energy dependent on the achievement of certain
financial and non-financial milestones, over an 18-month transition period to
31 December 2024. These are split broadly equally across service quality,
management transition, increased installation capacity and earnings run
rate.
· Day 1 Initial Consideration price at a less than six times EBITDA
multiple based on forecast 2023 earnings. Revenue for the year to 31 October
2023 remains on track to exceed £4m.
· For the financial year ended 31 October 2022, Wessex reported
sales of £2.2 million and a net profit of £0.3m. Gross assets as at 31
October 2022 were £0.8m.
· The new business plan will see the balance of 2023 and the first
half of 2024 as a period of investment as we look to double the installation
capacity of Wessex. Elevated installation capacity is expected to drive
material earnings accretion from 2025, leveraging corporate overheads to
deliver effective customer acquisition and cost to serve.
· Working capital will be required over the coming 12 months to
accelerate investment in people and marketing to allow the business to scale.
Good Energy expects to invest £0.5m in working capital to reach this point.
· The Initial Consideration, rest of the working capital and any
future pay-outs will be funded through the Company's existing cash resources.
· The Acquisition is expected to be marginally EPS accretive in the
first full year of ownership and materially accretive in the year ending 31
December 2025.
· Wessex EcoEnergy was founded in 2014 by Daniel Cole and Martin
Hawkins, who are the majority shareholders. Both will remain with the business
on completion. Daniel has over 24 years' experience in sales and senior
management roles in telecoms, internet, SAAS and solar energy sectors. Martin
is a Chartered Engineer specialising in Naval Architecture and an experienced
Project Manager, Martin has a proven track record of delivering multi-million
pound engineering projects. Martin has a passion and skill for property
renovation as well as cutting-edge ecological technology.
Nigel Pocklington, Chief Executive Officer of Good Energy, said:
"Good Energy is fast becoming the UK's go-to all-in-one solar service company.
We have the second largest solar generating customer base, paid out a record
amount for solar power last year and have launched market leading smart export
tariffs. Bringing Wessex into the business accelerates our solar and storage
installations business, as the solar surge which saw installs grow 125% in
2022 continues.
"Not only does Wessex ECOEnergy's purpose align with Good Energy's, its
premium, trusted positioning in the South West aligns with Good Energy too.
"There is a £5 to £10 billion growth opportunity in clean energy technology
installations among climate conscious consumers. With our trusted legacy and
green-motivated existing customer base we are positioned to be a major player
in this, and are already kitting out homes with heat pumps, solar and
batteries. Now we're supercharging our solar services."
Enquiries
Good Energy Group PLC Email: press@goodenergy.co.uk (mailto:press@goodenergy.co.uk)
Nigel Pocklington, Chief Executive
Charlie Parry, Director of Corporate Strategy & Investor Relations
Ian McKee, Head of Communications
SEC Newgate UK Email: GoodEnergy@secnewgate.co.uk (mailto:GoodEnergy@secnewgate.co.uk)
Elisabeth Cowell / Molly Gretton Tel: +44 (0)7900 248213
Investec Bank plc (Nominated Adviser and Joint Broker)
Henry Reast / James Rudd Tel: +44 (0) 20 7597 5970
Canaccord Genuity Limited (Joint Broker) Tel: +44 (0) 20 7523 4617
Henry Fitzgerald - O'Connor / Harry Rees
About Good Energy www.goodenergy.co.uk (http://www.goodenergy.co.uk/)
Good Energy is a supplier of 100% renewable power and an innovator in energy
services. It has long term power purchase agreements with a community of 1,700
independent UK generators.
Since it was founded 20 years ago, the Company has been at the forefront of
the charge towards a cleaner, distributed energy system. Its mission is to
power a cleaner, greener world and make it simple to generate, share, store,
use and travel by clean power. Its ambition is to support one million homes
and businesses to cut carbon from their energy and transport used by 2025.
Good Energy is recognised as a leader in this market, through green kite
accreditation with the London Stock Exchange, Which? Eco Provider status and
Gold Standard Uswitch Green Tariff Accreditation for all tariffs.
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