REG - Good Energy Group - Further statement in relation to hostile offer

Good EnergyAnnouncement

16/09/2021 07:00

RNS Number : 9300L
  
Good Energy Group PLC
  
16 September 2021
  
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
 
FOR IMMEDIATE RELEASE
 
Good Energy Group PLC
 
("Good Energy" or "the Company")
 
Further statement in relation to the hostile offer by Ecotricity Group Limited ("Ecotricity")
 
The Board of Good Energy Group PLC (AIM: GOOD), the 100% renewable electricity supplier and innovative energy services provider, refers to the hostile offer by Ecotricity (the "Offer") and reiterates its strong recommendation to REJECT the Offer.
 
·    Good Energy is successfully delivering on its modern, digital strategy.
o Our strategy is very different to Ecotricity's out-dated, centralised business model.
 
·    Good Energy is in a great position for accelerated growth.
o We operate in a rapidly growing, decentralised market with significant headroom for further growth.
 
·    Ecotricity is an unfit owner with an unsuitable plan.
o Ecotricity's poor business condition means it is an unfit owner for the Company.
 
·    Ecotricity's hostile and highly opportunistic offer significantly undervalues Good Energy.
o This offer does not take into account Good Energy's potential for growth. The Company is worth more than the Offer.
 
Good Energy shareholders should REJECT THE OFFER by taking no action.
 
Will Whitehorn, Chair of Good Energy, said:
 
"As reported on 14th September in our Interim results, a gross profit increase of 19.4% and gross profit margin of 25.9% show a strong, consistent and stable business - contrary to the assertions made by Ecotricity. The Board believes that the Company's financial performance clearly demonstrates that Good Energy is successfully delivering on its strategy.
"Good Energy has shown strong growth in the first half of this year, and the nature of the rapidly growing markets in which the Company operates - clean energy and transport - mean there is significant headroom for more.
"This is in stark contrast to Ecotricity, which has been loss-making for the past four years - demonstrating how unfit an owner Ecotricity would be for Good Energy.
"This hostile offer, if successful, would risk severely damaging the Company's potential for further growth, and deny our investors the opportunity to be a part of it.  
"The Board reiterates our unanimous recommendation to REJECT the Offer, by taking no action."
 
 
The Board refers to its response circular published on 18 August 2021, in which it set out in detail its reasons for reaching its conclusion (the "Response Circular"). Those reasons are summarised below.
 
·    Good Energy is successfully delivering on its modern, digital strategy. Good Energy's strategy is very different to Ecotricity's out-dated, centralised business model. Ecotricity has stated that there has been a decline in the Company's financial performance. In fact, Good Energy is going from strength to strength. Over the past five years, the Company has maintained a consistent and stable performance.  In contrast, Ecotricity has been loss-making for four successive years.
 
Good Energy's strong financial performance has continued into 2021, with our recent interim financial results showing:
 
o  Gross profit increased 19.4% to £17.7m (June 2020: £14.8m) with a gross profit margin of 25.9% (June 2020: 22.0%). Underlying operating margin increased to 8.7% (June 2020: 2.3%). 
o  Underlying profit before tax increased to £3.9m (June 2020: Loss of £0.5m). Reported profit before tax increased to £4.8m included non-underlying income of £0.8m associated with generation debt restructuring.
o  Underlying basic earnings per share increased to 16.4p, with reported earnings per share of 20.5p (June 2020: reported loss per share 6.6p).
·    Continued reduction in debt, alongside ongoing investment across the business:
o  Gross cash balance of £9.0m (June 2020: £18.2m), which included the repayment of 70% of Good Energy Bond II in June for £11.9m. 
o  Net debt decreased to £36.4m (June 2020: £36.5m). Gearing ratio decreased to 51.2% (June 2020: 51.9%).
·    The Board recognises the importance of the Company dividend to many shareholders and, as previously stated, intends to recommend a dividend payment for 2021 and reiterates its intention to maintain a progressive dividend policy.
o  The Board proposes an interim dividend of 0.75p in cash. As it is intended that the dividend will comprise a scrip alternative, as has historically been the case, it is proposed that the dividend will become payable conditional upon the offer by Ecotricity Group Limited lapsing or being withdrawn. Further details, including the scrip timetable, will be announced in due course.
·    Good Energy is in a great position for accelerated growth. The Company operates in a rapidly growing, decentralised market with significant headroom for further growth. We are ideally positioned to benefit from this trend, through our investment in Zap-Map, the UK's leading EV charger mapping service, and our own energy and EV products and services.
 
·    Zap-Map has over 250,000 registered users, and over 95% of the UK's public charging points on its network. Over 75% of the UK's EV drivers have downloaded Zap-Map.

 
·    Further charge point operators signed up to Zap-Pay including GeniePoint, char.gy, Motor Fuel Group, Revive and Mer joining existing Zap-Pay networks ESB Energy and Osprey.

 
·    Subscription service, launched in June 2021, provides enhanced features, including in-car support via Apple Car Play and Android Auto. Good levels of customer conversion experienced to date.

 
·    Fleet service EV fuel card with Fleetcor UK due to launch in Q4 2021. This will integrate its Zap-Pay solution with the Allstar payment platform delivering a solution to remove the payment complexities for businesses and commercial fleets.
 
·    Ecotricity is an unfit owner with an unsuitable plan. Ecotricity's poor business condition means it is an unfit owner for the Company.  In Ecotricity's Annual Report and Consolidated Financial Statements for the financial year ended 2020, Ecotricity's independent auditors highlighted that:
 
"a material uncertainty exists that may cast significant doubt on the group and company's ability to continue as a going concern."
 
Ecotricity has been a loss-making business for the past four years, with its latest published audited accounts also showing a negative cash balance and a significant amount of outstanding bond debt.
 
If the Offer is successful, it would place the collective interests of our investors and customers in combatting the climate crisis into the hands of one individual. We exist to give our customers the ability to generate their own power, not just buy ours. We believe that we can make a difference to climate change by delivering on our clear strategy for a growing market in decentralised, digitised clean energy and transport services based on 100% 'real' renewable power. We are able to do this while delivering returns for our shareholders.
 
·    This hostile and highly opportunistic offer significantly undervalues Good Energy. This offer also does not take into account Good Energy's potential for growth. The Company is worth more than the Offer.
 
·    The Board recommends that Good Energy shareholders should REJECT THE OFFER by taking no action.
 
·    The summary above should be read in conjunction with, and is subject to, the full text of the Response Circular, which can be found on the Company's website at https://group.goodenergy.co.uk/investor-centre/Offer-for-Good-Energy/ and the Company's interim results for the six months to 30 June 2021, which were published on 14 September 2021 and are available at https://group.goodenergy.co.uk/reporting-and-news-centre/investor-presentations/default.aspx
 
 
 
Enquiries
 




Good Energy Group PLC
Nigel Pocklington, Chief Executive
Charlie Parry, Head of Investor Relations & CoSec


Email: press@goodenergy.co.uk
 




 


 




SEC Newgate UK


Email: GoodEnergy@secnewgate.co.uk




Elisabeth Cowell


Tel: +44 (0)7900 248213




Emma Kane


Tel: +44 (0)7876 338339




 


 




Investec Bank plc (Nominated Adviser and Joint Broker)


 




Sara Hale / Jeremy Ellis


Tel: +44 (0) 20 7597 5970




 


 




Canaccord Genuity Limited (Joint Broker)
Henry Fitzgerald - O'Connor


 
Tel: +44 (0) 20 7523 4617




 
Investec Bank plc, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority, is acting as financial adviser to Good Energy and for no one else in connection with the Offer or other matters referred to herein and will not be responsible to anyone other than Good Energy for providing the protections afforded to its clients nor for providing advice in relation to the Offer or any other matters set out herein.
 
Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Good Energy and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than Good Energy for providing the protections afforded to clients of Canaccord Genuity Limited nor for providing advice in relation to the matters set out in this announcement.
 
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to this announcement or otherwise.
 
The release, distribution or publication of this announcement in jurisdictions other than the United Kingdom and the availability of any offer to shareholders of Good Energy who are not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom or shareholders of Good Energy who are not resident in the United Kingdom will need to inform themselves about, and observe any applicable requirements. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.
 
Sources and bases
 
Unless otherwise stated in this announcement:
 
·    Information relating to Good Energy has been extracted or derived from the Company's 2020 Annual Report for the year ended 31 December 2020 and the unaudited interim financial statements of the Company for the six months to 30 June 2021 and other material made publicly available by Good Energy.
·    Information relating to Ecotricity has been extracted or derived from Ecotricity's Annual Reports and Consolidated Financial Statements for the financial years ended 30 April 2017, 2018, 2019 and 2020.
 
Rule 26.1 disclosure
 
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be available (subject to certain restrictions relating to persons resident in restricted jurisdictions) at https://group.goodenergy.co.uk/investor-centre/Offer-for-Good-Energy/default.aspx by no later than 12 noon (London time) on the business day following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
 
Forward-looking statements
 
This announcement, including information included or incorporated by reference in this announcement, may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect Good Energy's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Good Energy's business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. There are many factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among such factors are changes in the global, political, social, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates, future business combinations or disposals, and any epidemic, pandemic or disease outbreak.
 
These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. By their nature, these forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement may cause the actual results, performance or achievements of any such person, or industry results and developments, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. No assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements that speak only as at the date of this announcement. All subsequent oral or written forward-looking statements attributable to Good Energy or its affiliates or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. Good Energy does not intend, nor undertakes any obligation, to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
 
 

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