REG - Good Energy Group - Trading Update

Good EnergyAnnouncement

22/12/2021 07:00

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RNS Number : 4148W  Good Energy Group PLC  22 December 2021

Good Energy Group PLC

 

("Good Energy" or "the Company")

 

Trading Update

Good Energy Group PLC (AIM:  GOOD), the 100% renewable electricity supplier
and innovative energy services provider, today provides a further trading
outlook for the business ahead of the year ending 31 December 2021.

Market update

The financial performance for November was in line with expectations. Our
first domestic standard variable tariff ("SVT") rise became effective on 1
November 2021, which provided some mitigation against another low wind month,
with wind levels 18% below seasonal norms.

During December, power and gas prices have increased sharply to unprecedented
levels, driven in part again by tension between Russia and Ukraine, the
gateway of European gas imports, together with colder, calmer weather
forecasts and a French nuclear plant being taken offline.

Since our last trading update on 25 November 2021, a little over three weeks
ago:

-      Power and gas prices on a Day Ahead basis for December compared to
November have been on average 36% and 35% more expensive respectively at
£256/Mwh and £2.71/therm

-      Q1 2022 baseload power and gas prices at £489/Mwh and
£4.39/therm are 102% and 89% higher respectively

-      The increases in nearer term power and gas prices are all now
feeding very strongly in 2022/2023 seasonal contracts

The industry has also experienced a further sustained period of low wind since
16 December 2021, which is expected to continue until Christmas. Current wind
levels are approximately 33% of seasonal norms and the impact of this
shortfall has been material across the industry.

These changed conditions are expected to adversely impact full year profits by
approximately a further £3m, since guidance given in our last update to the
market on 25 November 2021.

Trading outlook

In November, we highlighted the impact of incurring additional commodity costs
from a higher number of business and domestic customers than expected. This is
now expected to continue into the first quarter of 2022, at sustained high
commodity prices.

To absorb some of the higher input costs, we announced a second domestic SVT
price rise of 30% to be effective from 17 January 2022. We expect this to
minimise the impact of the rising forward prices over the medium term. We will
continue to monitor the need to increase prices further, given our exemption
from the price cap.

Colder and calmer weather conditions, coupled with higher customer volumes and
elevated market prices throughout the winter will require additional working
capital so we are actively engaged with our financing partners to help ensure
we can meet these short term working capital requirements as appropriate.

Nigel Pocklington, Chief Executive Officer of Good Energy, said:

"This is a national crisis. Wholesale gas and power prices have increased to
unprecedented levels over the last three weeks, creating an extremely
difficult operating environment for every business in the industry.

"While we have a very strong track record in forecasting and hedging, these
unparalleled price hikes, together with the very low levels of churn within
our customer base, means that we require far greater working capital to trade
similar volumes at these stratospheric price levels. No one in the industry is
immune. We urge the UK Government to support the industry at large in
navigating these short-term challenges to protect bill-payers and those that
serve them."

Enquiries

 

 Good Energy Group PLC                                   Email: press@goodenergy.co.uk

 Nigel Pocklington, Chief Executive

 Charlie Parry, Head of Investor Relations & CoSec

 Luke Bigwood, Head of Communications

 SEC Newgate UK                                          Email: GoodEnergy@secnewgate.co.uk
 Elisabeth Cowell                                        Tel: +44 (0)7900 248213

 Investec Bank plc (Nominated Adviser and Joint Broker)  Tel: +44 (0) 20 7597 5970
 Sara Hale / Jeremy Ellis

                                                         Tel: +44 (0) 20 7523 4617
 Canaccord Genuity Limited (Joint Broker)

 Henry Fitzgerald - O'Connor

 

About Good Energy www.goodenergy.co.uk

 

Good Energy is a generator and supplier of 100% renewable power and an
innovator in energy services. It currently owns two wind farms, six solar
farms and sources electricity from a community of 1,600 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
support UK households and businesses generate, store and share clean power.

 

Good Energy is recognised as a leader in this market, through our green kite
accreditation with the London Stock Exchange and as the only energy supplier
with Gold Standard Uswitch Green Tariff Accreditation for all tariffs.

 

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