REG - Good Energy Group - Un-audited Final Results 2023
26/03/2024 07:00
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RNS Number : 2388I Good Energy Group PLC 26 March 2024
Good Energy Group PLC
("Good Energy" or "the Company")
Un-audited results for the 12 months ended 31 December 2023
Significant period of transformation from renewable supply to fully integrated
energy services
Good Energy, the renewable electricity and energy services provider, today
announces its preliminary results for the twelve months ended 31 December
2023.
Financial highlights
· Revenue increased 2.4% in the period to £254.7m (2022: £248.7m)
driven by the high commodity cost and cost of sale environment present at the
start of 2023.
· Reported gross profit increased 47.9% to £44.2m (2022:
£29.9m). Gross margin increased to 17.4% (2022 12.0%). Gross profit and
gross margin increased due to a strong H1 2023 performance and cost advantages
from our power purchase agreements.
· Reported profit before tax of £5.7m compares with an underlying
PBT of £1.4m in 2022. This improvement reflects recovery of margins in 2023
following 2022 wholesale price spikes.
· Good Energy recognised a loss of £2m in relation to its share of
the losses recognised by Zapmap in the year.
· Reported profit after tax for the period of £2.9m (2022: £8.6m,
2022 included a one off £7.8m valuation uplift related to Zapmap)
· Reported basic earnings per share reduced to 17.1p (2022: 55.7p).
· Cash and cash equivalents of £41.3m (2022: £24.5m) reflecting
strong profitable performance, but also a £9m year on year growth in customer
credit balances.
· Following robust operational performance in 2023, and reflecting
our confidence in the ongoing business, the Board recommend a final dividend
for 2023 of 2.25p per ordinary share (2022 2.0p).
Operational highlights
· In just over 12 months we have successfully completed three
acquisitions, enabling Good Energy to offer heat, EV charging and solar
installation services:
o Fully integrated Good Energy heat pumps following December 2022
acquisition into wider business to offer unified premium, bespoke, end-to-end
Good Energy heat pump installation services.
o Acquired solar installation company Wessex ECOEnergy Limited in June 2023,
establishing high quality solar and storage services in the South West.
o Post year end in February 2024, delivered the acquisition of solar
installer and wholesaler JPS Group, establishing solar and storage
installation services across the South of the UK. Acquisition partially funded
through the issue of new shares, of which approximately £2.1m were placed
with new and existing shareholders.
· Good Energy is now established as a microgeneration specialist,
offering quality, end-to-end solar and heat pump installation alongside
tariffs and services to a premium segment of a rapidly growing market.
· Maintained differentiated 100% renewable electricity supply
offering -
o Domestic supply accredited with top Which? Eco Provider ranking for third
year running and achieved five-star TrustPilot rating from customers.
o Launched industry first hourly renewable matching service for business
customers to provide greater transparency.
· Progressed innovative export product rollout, transitioning
+60,000 Feed-in-Tariff customers to smart export and launching industry
leading new export tariff for non-tariff customers out of beta, with enhanced
rate for solar installation customers.
· Successfully trialled 'Power Pause' customer demand flexibility
as part of the National Grid Demand Flexibility Service.
· Zapmap increased registered users by 41% to +780,000, maintaining
+70% market share in growing electric vehicle market.
Outlook highlights
· Heat and solar markets continue to see rapid growth -
o UK solar market worth £1.9bn, installations increased 38% in 2023,
anticipated to grow to £4.6bn by the end of 2030.
o Air source heat pump installations grew 20% in 2023, UK government
targeting 600,000 installations per year to 2028.
· Good Energy now established to offer premium, end-to-end solar and
heat pump installation services.
· Differentiated green supply and market leading export products
position Good Energy to cross sell a 'greener whole home or business'
proposition, providing carbon and running cost savings for climate conscious
customers. Higher margin installation services lead to higher margins on
recurring services including supply, flexibility and export.
· Trading in 2024 has started in line with management expectations.
Both revenue and cost of sales are expected to be significantly lower in 2024
reflecting lower wholesale costs and associated tariffs in the supply segment
of the business. 2024 is also expected to see a return to more normalised
supply segment margin levels.
· Energy services segment to be a material driver of Group
profitability by 2025.
Nigel Pocklington, CEO, Good Energy Group plc:
"Against a backdrop of continued volatility in the energy market, 2023 saw
Good Energy undergo a transformation from pure renewable supply and
Feed-in-Tariff administration to a fully-fledged clean energy services
business.
"Following multiple acquisitions in the heat and solar space we can now offer
customers premium services across supply, export, heat pumps, solar PV,
storage and EV charging. Alongside this, we are now a leader in smart export
for small scale solar and have trialled innovative flexibility services for
businesses and consumers to shift their demand to cut their carbon further.
Good Energy is establishing itself as the microgeneration specialist for the
premium end of a rapidly growing market, offering everything a home or
business needs to go greener, from a trusted brand with unparalleled
expertise.
"Good Energy has had a strong financial performance in 2023 and we have a
strong balance sheet to continue to invest in the future. We continue to see
strong, sustainable growth in the clean energy services space which Good
Energy is ideally positioned to capitalise on."
A video overview of the results from the Chief Executive Officer, Nigel
Pocklington, is available to watch here:
https://www.fmp-tv.co.uk/2024/03/26/good-energy-ceo-interview/
(https://www.fmp-tv.co.uk/2024/03/26/good-energy-ceo-interview/)
Enquiries
Good Energy Group PLC
Nigel Pocklington, Chief Executive Officer Email: press@goodenergy.co.uk (mailto:press@goodenergy.co.uk)
Ian McKee, Head of Communications
SEC Newgate UK
Elisabeth Cowell / Molly Gretton Tel: +44 (0)7900 248213
Email: GoodEnergy@secnewgate.co.uk (mailto:GoodEnergy@secnewgate.co.uk)
Investec Bank plc (Nominated Adviser and Joint Broker)
Henry Reast / James Rudd / Maria Gomez de Olea Tel: +44 (0) 20 7597 5970
Canaccord Genuity Limited (Joint Broker)
Henry Fitzgerald - O'Connor / Harry Rees Tel: +44 (0) 20 7523 4617
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 over
2,000 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.
Chair's review
Overview
2023 was the year we set out to build on the progress made on our energy
services strategy in 2022, and I'm pleased to say that this has been
successful. We have launched new, innovative solutions, acquired further
installation capability and delivered leading customer service levels. Against
the backdrop of a stabilising energy market, we have delivered a year of
strong financial performance.
Good Energy is dedicated to powering a cleaner, greener future. This year, the
Company has advanced this mission with strategic acquisitions, strengthening
our position as a leader in the UK's transition to net zero. Our efforts in
solar services and installation across key regions underline our commitment to
this vital shift, reflecting our role in driving forward the nation's
decarbonisation agenda.
For our customers, they have access to a trusted partner which can now
facilitate their ambition to install, consume and generate green power for
their home or business, and which can also ensure they earn more from the
power they generate. For our investors, they have exposure to a highly
exciting growth market and are benefitting from the value creation achieved
through our investment into Zapmap. This growth and expansion is underpinned
by a stable energy supply business operating in a more steady UK energy
environment with forward looking power and gas prices returning to levels seen
prior to Russia's invasion of Ukraine.
Despite this environment, prices remain high in historic terms. The rising
costs emphasised the need to shift away from fossil fuels and encouraged
people to insulate themselves from the high prices by switching to solar
power, with record numbers of rooftop installations taking place in 2023.
Also in the period, as part of Ofgem's compliance work Good Energy was ordered
to pay £1.25m into the regulator's redress fund and an additional £368,404
in goodwill payments to customers. This was following the surfacing of an
issue relating to payment method changes which originated from a process
change made in 2019. The issue, which was self reported as soon as it was
apparent, has since been addressed with new automated processes, standard and
governance which the Board is confident will prevent any similar mistake in
future.
We exited the year in a strong position. We have a robust balance sheet,
continue to invest in high growth markets and are helping more homes and
businesses save money and decarbonise.
Strategic developments
2023 was a transformational year for Good Energy. Last year, I talked about
the strong platform that we had built to deliver our energy services strategy
in 2023. We have accelerated progress through the acquisition of three
installation businesses, roll out of innovative, market first, solar service
solutions, whilst maintaining a high level of customer service and operational
efficiency.
Supporting our ambition to help one million customers cut carbon by 2025, we
have acquired a heat pump installation business, Igloo Works, and two solar
installation businesses, Wessex ECO Energy and post period end, JPS Group.
Good Energy is now positioned as one of the leading installers in the South of
the UK focused on a bespoke, high quality service offer.
Capital allocation
Our substantially debt free position and strong cash balance allows us to
continue to invest for sustainable growth and deliver potential further
acquisitions in energy services, which is reflected in our capital allocation
policy. Post period end, in February 2024, we raised £2.1m through a vendor
placing as part of the JPS Group acquisition, testament to investor support
for our ongoing energy services strategy. We welcome our new, supportive
institutional shareholders.
We recognise the importance of a dividend to many shareholders. Following a
strong operational performance in 2023 and reflecting our confidence in the
ongoing business, the Board recommend a final dividend for 2023 of 2.25p per
ordinary share, taking our full year dividend to 3.25p (2022: 2.75p).
Board
On behalf of the Board, I am delighted to welcome Fran Woodward to her new
role as a Director on the Good Energy Board. Fran joined the Board on 20
October 2023 and is, currently, Good Energy's Chief Operating Officer. Fran
has been an integral part of Good Energy since 2014, steering vital functions
such as Sales and Energy Origination, Marketing, Customer Operations, and the
People and Culture departments. Her extensive leadership experience, gained
from notable organisations such as Marks & Spencer, Coca-Cola, Dyson, and
EDF, has been instrumental in ensuring that our customers remain central to
our strategy, operations, and culture.
Looking ahead
The Board has confidence in Good Energy's strategic direction and future
prospects. In the short term, trading has commenced in line with management's
expectations. Further ahead, as a trusted brand with an array of high quality
services under one roof, Good Energy is well positioned as a premium
specialist in the rapidly growing microgeneration market. We have a proven
track record of delivering on our strategy and we look forward to creating
further value in 2024 and beyond.
Will Whitehorn, Chair
CEO's review
The energy market will be transformed in the next ten years. A mass transition
towards small-scale, low carbon technologies is taking place. And Good Energy,
with its purpose to create a cleaner, greener world and following a
transformational year itself in 2023, is ideally positioned to help drive this
transition.
Small scale solar (below 50kW) installations increased 38% in 2023 (MCS), from
an already significant doubling in the install rate in 2022 as households and
businesses looked to insulate themselves from rising energy costs. The UK
solar market, worth £1.9 billion today (MCS), is anticipated to more than
double to £4.6 billion by 2030 (LCP Delta). With only 8% of potential homes
currently equipped with solar installations, there's a vast potential for
increase. The South and South East regions of the UK are leading in market
share and installation rates, demonstrating strong growth. Similarly, air
source heat pump installations have increased, supported by government
incentives.
Air source heat pump installations also grew 20% last year to over 35,000,
with an enhanced government grant introduced late in the year. Whilst this
market is more nascent than solar, the government remains committed to its
target of hitting 600,000 installations per year with heat pumps being the
primary method through which the UK will decarbonise its heating.
Against this backdrop energy supply remains a challenging business. Margins,
especially for domestic supply, have long been slim. High prices over the past
two years have not changed this, and whilst they have reduced somewhat from
their highest heights the market remains volatile comparative to pre-energy
crisis. In this period we have delivered another strong financial performance
in 2023, whilst activating our strategy through the roll out of new tariffs
and services alongside investment in our installation footprint.
Delivering on our vision
Good Energy has long set out a vision for a decentralised, decarbonised energy
system in which suppliers are no longer purchasing electricity and gas from a
few large generators and supplying it to customers, into one where smart,
clean technologies create a more participatory system. We are now seeing this
vision realised with the flaws in a fossil fuel based energy supply system now
more apparent than ever; installations of small scale decentralised clean
technology surging and smart meter adoption is now predominant. And Good
Energy is poised to play an important part.
Following three acquisitions in a little over 12 months Good Energy now offers
everything you need for a greener home or business. Renewable electricity
supply, solar, storage and heat pump installation, EV charging, export tariffs
and we are now introducing flexibility services to make all of this technology
work for the customer.
What this creates is not only a business that remains committed to its purpose
of creating a cleaner, greener future, but one that can provide more value to
customers and greater returns. Installation services are significantly higher
margin than supply. One off installations also pave the way for recurring
revenues through other services including smart export, supply, flexibility
and maintenance.
The Good Energy brand, with our 25-year history as a truly green renewable
innovator, positions us ideally as a trusted partner for customers looking to
go green.
Truly renewable supply
Renewable supply is the foundation on which Good Energy's strategy is built.
Itself a model in decentralisation, as we source the power we supply customers
via agreements with over 2,000 independent renewable generators across the UK.
Good Energy's renewable electricity supply remains recognised as a greener
product.
In 2023 we retained our Which? Eco Provider accreditation, the only supplier
to have scored top in all three years the consumer rights organisation has
been ranking the environmental credentials of green suppliers. We continue to
hold the Uswitch Green Tariff Gold Standard for all of our tariffs too, and
are the only supplier with Good Housekeeping's Getting Greener label for 100%
renewable electricity. Our customers continued to provide positive feedback on
our service too, pushing our rating on TrustPilot to five stars - one of only
two UK energy suppliers which are rated so highly.
We made a significant step in differentiating our supply product for business
customers too. As part of our criticisms of the current unit based
certification system for renewable electricity Good Energy has supported a
shift towards time-based matching. Now there is more widespread acceptance of
the problems with unit based certification - Renewable Guarantees of Origin or
REGOs in the UK - there is also a growing movement towards time based.
Pioneered by tech giants like Google, which has set a 2030 goal to be powered
by '24/7 carbon free energy', there is now a UN compact for the system, which
the US government joined during COP28.
Good Energy already traded power with the aim of matching customer demand to
the output from our renewable generators as closely as possible, achieving
around 90% matching in half hour intervals on an annual basis for the past
five years - a very high level enabled by our decentralised, distributed
generation portfolio. In 2023 we partnered with technology platform Granular
Energy to provide our half hourly business customers with the insight on how
their energy use is being matched, creating a new level of transparency and
paving the way for flexibility and incentivisation for new technologies such
as storage.
As electricity supply in the UK moves towards market wide half hourly
settlement and the location based pricing model proposed in the Government's
second consultation on Review of Electricity Market Arrangements, Good Energy
is ideally positioned.
This is a new frontier for renewable supply and Good Energy is leading the
charge.
Solar and smart export
Good Energy is the UK's second largest solar power payments company. As the
progenitor and largest voluntary administrator of the Feed-in-Tariff, we have
long been a significant participant in the small scale solar market. But 2023
was the year we became an installer, closing the loop to become an all-in-one
solar services provider.
In June, we acquired Wessex ECO Energy. 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.
Whilst in February 2024, we completed our largest acquisition to date of JPS
Group, a specialist solar and storage installation and distribution business,
and its wholly owned subsidiary, Trust Solar Wholesale Limited ("Trust"), a
standalone distribution and procurement business based in Maidstone, Kent. The
acquisition was partially funded through a £2.1m vendor placing. I would like
to thank new and existing shareholders for their support.
The acquisition of JPS Group marks a pivotal moment in Good Energy's strategy,
reinforcing our role as the UK's leading solar specialist. The solar sector is
booming, reflecting its critical role in our energy transition. Good Energy, a
key player since the Feed-in-Tariff era, now serves over 180,000 solar
customers, illustrating our significant influence in this space. In 2023, the
solar market reached £1.9 billion, with a 38% increase in installations,
particularly in the South East, the fastest-growing region. JPS Group, known
for its expertise in complex solar solutions for larger properties,
complements our mission to supply high-quality, sustainable energy solutions.
By integrating JPS Group with our existing offerings, including solar,
storage, and heat pumps, we're not only expanding our market presence but also
introducing our comprehensive energy solutions to more customers. This
strategic move consolidates our position as industry leaders and enhances our
ability to meet the increasing demand for clean energy.
In tandem, we continued to innovate in the export tariff market. We converted
over 60,000 Feed-in-Tariff customers to smart export and launched our market
leading Solar Savings export tariff - open to FiT and non-FiT generator
customers alike. We also introduced an enhanced Solar Savings rate for
customers who install solar with us, providing an end-to-end customer benefit
for choosing Good Energy.
Heat
Following the acquisition of Igloo Works in December 2022 we successfully
integrated this heat pump installation business into Good Energy, rebranding
and merging shared functions including marketing, sales, HR, finance and
legal.
As with solar, Good Energy's positioning is at the premium end of the market.
We offer customers bespoke design and end to end installations suiting more
complex properties. In addition Good Energy heat pumps come with a 10 year
warranty and a remote performance monitoring service that ensures their
heating is running efficiently, providing reassurance to customers. Our
average installation is 7.5% larger than the average system size compared to
the top 200 UK installers, delivering at an average margin of 25% to 30%.
Product pipeline
In addition to the rollout of new tariffs, shift to smart export and increase
in smart meters to over 46,000, Good Energy further innovated in 2023. We
trialled flexibility through 'Power Pause', our implementation of National
Grid's Demand Flexibility Service, paying customers to shift their energy
usage away from peak times - a successful pilot we intend to build on in 2024.
We implemented efficiencies in our digital services by refreshing our customer
app and portal.
Looking ahead we plan to utilise digital to further drive efficiency whilst
improving the customer experience, introducing new features like Apple and
Google pay in our app.
We have new partnerships and tariffs planned including a tie in with Zapmap,
offering Good Energy EV tariff customers free premium subscription to the app.
And we will be introducing new recurring revenue streams through maintenance
and servicing for our installation customers.
We know that flexibility is the key that unlocks much of the value of having a
greener home or business. Shifting when and what you import, export, store or
share to the benefit of the customer, grid, and Good Energy. Having trialled
demand flexibility in 2023 we are looking to expand this into 2024.
Zapmap
As the adoption of electric vehicles continues to grow, now hitting over a
million battery electric vehicles on UK roads, Zapmap has continued to
maintain its leading position.
The business underwent a refreshed brand and strategy in 2023, now operating
on three fronts. The first being the consumer app and web interface. With 1.4m
downloads and 780k registered users, Zapmap serves 330k active users per month
looking to search, plan and pay for EV charging.
Launched in 2023 came Zapmap Spark, an API product which enables partners to
seamlessly integrate Zapmap's market leading services and data into their
products.
Lastly Zapmap Insights provides another market leading service to other
businesses and partners, providing Zapmap's unique data - from charge point
operators and EV drivers - as a service. Zapmap provides data on 95% of
public charging points in the UK, with 75% showing live data and 25% coverage
for payments through the app too.
In late 2023 Zapmap piloted expansion into mainland Europe, allowing users to
search for and find charge points in France, Germany, Belgium, the Netherlands
and Luxembourg.
A further funding round is required in 2024 to deliver Zapmap's growth
strategy, Good Energy remains a supportive shareholder.
Everything for a greener home or business
Good Energy's purpose has always been to power a cleaner, greener future.
Throughout the company's history it has innovated in renewable supply and
helping microgenerators, with the goal of making it simpler for customers to
go green. In 2022 we announced an ambition to help one million homes and
businesses cut their carbon by 2025. Following a productive year investing in
new tariffs, acquisitions to offer installation services, offering market
leading customer service and paving the way for a smarter, digitised customer
experience, and continued growth from Zapmap, today Good Energy has achieved
that target - a year ahead of time.
Our goal now is to go further in simplifying our offer, and make it easier
than ever to come to Good Energy for everything you need for a greener home or
business. We will be looking to bring all of our services under the Good
Energy brand, so that it becomes a trusted hallmark for good, genuinely green
energy services. With the work we have done in 2023 we are now well on the
way.
Nigel Pocklington, CEO
Operating review
Wholesale energy market conditions
Whilst volatility remained last year, there was a strong bearish trend in the
UK gas and power markets in 2023, with the day ahead gas and power contracts
losing 48% and 59% respectively. Demand remained relatively subdued, as we
witnessed a second consecutive mild winter, with 2023 being confirmed as the
world's warmest year on record. LNG supply to Europe improved as the US LNG
terminal Freeport returned to operations in March after it had been closed
since June 2022 following an explosion. Competition for LNG supply was also
limited owing to lower Asian demand due to the lack of extreme weather, and a
slower than expected Chinese economic recovery following the end of Covid
restrictions.
The UK power mix saw a shift in 2023, with wind generation increasing to
supply 26% of the UK's power requirements, compared to 24% in 2022. There were
also higher imports through the interconnectors, increasing from 6% to 14% of
the UK power mix, aided by additional interconnector capacity along with a 24%
increase in French nuclear output.
Overall, UK gas consumption was 12% lower, with the biggest reductions seen
from industry, along with power generation due to the increase in renewables
and imports. Reductions in UK electricity supply volumes were lower at 2%.
Renewable supply business
Cash collections
· Cash collections through 2023 remained strong, despite
significant regulatory pressure around domestic collection, in addition to
continued economic pressures around inflation and the cost-of-living
crisis.
· We continued to see rapid speed to cash from Key Accounts and
larger business supplies, further demonstrating our ability to manage large
and complex billing portfolios and broker relationships. We also saw
significant reductions in SME debt, with aged debt reducing by 25% in the
year.
· Direct Debit collections remained healthy through the year, with
consistent payments made in line with consumption changes.
Business
Total business supply meters fell by 27% to 5,592. The decline is part of
our ongoing right-sizing of our business portfolio to align with the energy
services strategy. In the same period, business supply volumes only reduced by
15%, reflecting an increase to the average customer on supply from 59MWh
(2022) to 67MWh (2023).
Domestic
We remain committed to ensuring that we offer a fair priced, transparent 100%
renewable electricity proposition.
Services business
Feed in tariff (FiT)
FiT administration provides the foundation of our energy services model.
Despite the FiT scheme closing to new entrants in March 2019, we continue to
administer the scheme for domestic and business customers.
Customer numbers increased 1.5% to 182,982 (vs 180,300 in 2022).
Smart meters
Good Energy has now installed 47,000 meters, and as a result, 58.4% of
domestic customer meters are now smart. We made strides in improving the
health of our domestic smart meters, which is crucial for enabling our Smart
enabled tariffs like Solar Savings, Power Pause and our EV tariff, and the
accurate communication of meter readings.
Solar installations
Good Energy Group PLC acquired Wessex EcoEnergy in June 2023. Revenue from the
business in 2023 was £2.1m.
Heat pump installations
Revenue from heat pump installations in 2023 was £0.96m, strengthening into
the second half of the year as marketing spend increased and buoyed by the
enhanced government BUS grant which was introduced in October.
CFO REVIEW
Overview
The Group has delivered solid financial results for 2023 and a holds strong
balance sheet to invest in the future of the business. The performance in
2023 provides a good springboard to move into 2024 and beyond with a more
diversified business encompassing both supply and increasing levels of service
income.
Financial performance
Profit and loss
Revenue increased 2.4% in the period to £254.7m (2022: £248.7m) driven by
increased tariffs reflecting the high commodity cost environment present at
the start of 2023. Cost of sales decreased by 3.8% to £210.5m (2022:
£218.8m) with commodity costs ending 2023 materially lower than when the year
started. Both cost of sales and revenue are expected to be significantly
lower in 2024 reflecting lower wholesale costs and associated tariffs in the
supply segment of the business.
Reported gross profit increased 47.9% to £44.2m (2022: £29.9m). Gross
margin increased to 17.4% (2022 12.0%). The increase reflects a strong H1
2023 when low margins seen in 2022 were recovered as tariffs caught up with
the wholesale cost rises seen in 2022. 2024 is expected to see a return to
more normalised supply segment margin levels.
Total administration costs increased 32.6% to £37.3m (2022: £28.1m). This
increase relates to a £2m year-on-year growth in expected credit loss
provisioning, alongside £4.2m investment supporting the expansion of the
services business. Other factors include a £1.25m contribution to the
voluntary redress fund and inflationary pressures experienced by all
businesses during 2023.
Net finance income grew from £0.3m to £0.6m reflecting higher interest rates
on offer for cash available to be placed on deposit.
Reported profit before tax of £5.7m compares with an underlying PBT of £1.4m
in 2022 reflecting recovery of margins in 2023. (2022 PBT was £9.2m but
included a one-off revaluation benefit of £7.8m associated with the ZAPMAP
business)
2023 tax charge is £2.8m versus 2022 which was a tax charge of £0.6m. 2022
included the impact one-off benefits related to generation business sale.
The reported profit for the period was £2.9m (2022: £8.6m). Whilst
underlying business is materially stronger in 2023 the non-repeat of the 2022
increase in value of the investment in Zapmap alongside a higher tax
obligation in 2023 drive a lower profit after tax return.
*A profit bridge slide has been included in the Investor presentation, which
is available on the Company's website.
(https://group.goodenergy.co.uk/home/default.aspx)
Cash flow and cash generation.
There was a net increase in cash of £16.9m, which includes the acquisition of
Wessex Eco Energy in June 2023.
Cash and cash equivalents at the end of December 2023 were £41.3m, with a
further £5.9m held in security and restricted deposit accounts. Within the
cash and cash equivalents balance are £13.9m of customer credit balances
(2022: £4.9m). These balances have grown materially in 2023 as a result of
rapid increases and then decreases in wholesale costs and associated
tariffs. These credit balances are expected and planned to fall to a more
normal level in 2024 and the company is taking proactive steps to reduce this
credit position.
Funding and debt
Our business is debt free on a net basis.
The remaining Good Energy Bonds II amount outstanding including interest is
£4.9m split £0.2m short term liabilities and £4.7m within long term
liabilities. This is due to an annual redemption request window for
bondholders in December of each year.
The Group continues to maintain capital flexibility, balancing operating
requirements, investments for growth and payment of dividends. Our business
remains mindful of the need to capitalise on strategic business development
and investment opportunities. Prudent balance sheet management remains a key
priority.
Earnings
Reported basic earnings per share reduced to 17.1p (2022: 55.7p). Whilst
underlying business is materially stronger in 2023 the non-repeat of the 2022
increase in value of the investment in Zapmap alongside a higher tax
obligation in 2023 drive a lower profit after tax return.
Dividend
Following strong operational performance in 2023, and reflecting our
confidence in the ongoing business, the Board recommend a final dividend for
2023 of 2.25p per ordinary share (2022 2.0p).
Good Energy continues to operate a scrip dividend scheme and the payment
timetable of the final dividend will be announced in due course.
Expected Credit Loss (ECL)
ECL charge in the year was £5.6m, this is an increase of £1.7m (2022:
£3.9m).
The main impact of the year is elevated tariffs. Revenues have significantly
increased but this has been partially offset by Government support schemes
reducing the impact of higher prices on end customers.
Consolidated Statement of Comprehensive Income (Unaudited)
For the year ended 31 December 2023 2023 2022
£'000 £'000
Notes Unaudited
REVENUE 2 254,703 248,682
Cost of sales (210,458) (218,768)
GROSS PROFIT 44,245 29,914
Administrative expenses (37,282) (28,109)
Other operating income 171 66
OPERATING PROFIT 7,134 1,871
Finance income 3 897 633
Finance costs 3 (321) (351)
Gain arising on loss of control of subsidiary - 7,767
Share of loss of associate (2,027) (712)
PROFIT BEFORE TAX 5,683 9,208
Taxation (2,807) (637)
PROFIT FOR THE YEAR 2,876 8,571
DISCONTINUED OPERATIONS
Profit from discontinued operations, after tax - 64
PROFIT FOR THE YEAR 2,876 8,635
Attributable to:
Good Energy Group PLC 2,876 9,227
Non-Controlling Interest - (592)
OTHER COMPREHENSIVE INCOME:
Other comprehensive income for the year, net of tax - -
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT 2,876 8,635
COMPANY
Earnings per share for the 4 Basic 17.1p 55.7p
year
4 Diluted 17.0p 55.6p
Earnings per share for the year (continuing operations) 4 Basic 17.1p 51.7p
4 Diluted 17.0p 51.7p
Consolidated Statement of Financial Position (Unaudited)
As at 31 December 2023
2023 2022
£'000 £'000
Notes Unaudited
ASSETS
Non-current assets
Property, plant, and equipment 326 117
Intangible assets 5,694 3,503
Right of use assets 1,080 324
Deferred tax asset 131 162
Equity investment in associate 10,551 12,578
Total non-current assets 17,782 16,684
Current assets
Inventories 11,026 9,212
Trade and other receivables 35,858 57,497
Restricted deposit accounts 5,912 8,462
Cash and cash equivalents 41,347 24,487
Total current assets 94,143 99,658
TOTAL ASSETS 111,925 116,342
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 845 844
Share premium account 12,975 12,915
Employee Benefit Trust shares - (7)
Retained earnings 28,185 25,234
Total equity 42,005 38,986
Non-current liabilities
Borrowings 5 5,687 4,927
Total non-current liabilities 5,687 4,927
Current liabilities
Borrowings 5 531 294
Trade and other payables 63,702 72,135
Total current liabilities 64,233 72,429
Total liabilities 69,920 77,356
TOTAL EQUITY AND LIABILITIES 111,925 116,342
Consolidated Statement of Changes in Equity (Unaudited)
For the year ended 31 December 2023
Share capital Share premium EBT shares Retained earnings Revaluation surplus Total equity attributable to members of the Parent Company Non-controlling interests Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 840 12,790 (444) 4,773 11,693 29,652 (325) 29,327
Profit for the year - - - 9,227 - 9,227 (592) 8,635
Total comprehensive income for the year - - - 9,227 - 9,227 (592) 8,635
Share based payments - - - 198 - 198 - 198
Dividend paid - - - (297) - (297) - (297)
Scrip dividends issued 3 125 - (128) - - - -
Disposal of subsidiary - - - - - - 917 917
Exercise of options 1 - 437 (232) - 206 - 206
Transfer of revaluation to retained earnings - - - 11,693 (11,693) - - -
Total contributions by and distributions to owners of the parent, recognised 4 125 437 11,234 (11,693) 107 917 1,024
directly in equity
At 31 December 2022 844 12,915 (7) 25,234 - 38,986 - 38,986
At 1 January 2023 844 12,915 (7) 25,234 - 38,986 - 38,986
Profit for the year - - - 2,876 - 2,876 - 2,876
Total comprehensive income for the year - - - 2,876 - 2,876 - 2,876
Share based payments - - - 341 - 341 - 341
Deferred tax movement charged to equity - - - 239 - 239 - 239
Dividend paid - - - (444) - (444) - (444)
Scrip dividends issued 1 60 - (61) - - - -
Exercise of options - - 7 - - 7 - 7
Total contributions by and distributions to owners of the parent, recognised 1 60 7 75 - 143 - 143
directly in equity
At 31 December 2023 845 12,975 - 28,185 - 42,005 - 42,005
Consolidated Statement of Cash Flows (Unaudited)
For the year ended 31 December 2023
2023 2022
£'000 £'000
Unaudited
Cash flows from operating activities
Cash generated from operations 20,631 5,180
Finance income 434 17
Finance costs (271) (70)
Corporation tax paid (550) -
Net cash flows generated from operating activities 20,244 5,127
Cash flows from investing activities
Purchase of property, plant and equipment (154) (9)
Purchase of intangible assets (12) (125)
Investment in associate - (3,494)
Proceeds from disposal of held for sale assets - 20,351
Acquisition of subsidiary, net of cash held in the subsidiary (2,203) (1,725)
Net cash flows (used in)/from investing activities (2,369) 14,998
Cash flows from financing activities
Payment of dividends (444) (297)
Repayment of borrowings (41) (1,619)
Capital repayment of leases (580) (626)
Proceeds from exercise of share options 50 205
Net cash flows used in financing activities (1,015) (2,337)
Net increase in cash and cash equivalents 16,860 17,788
Cash and cash equivalents at beginning of year 24,487 6,699
Cash and cash equivalents at end of year 41,347 24,487
Notes to the Financial Information (Unaudited)
1. Basis of Preparation
Good Energy Group PLC is an AIM listed company, incorporated in England and
Wales, and domiciled in the United Kingdom, under the Companies Act 2006.
The principal activity of Good Energy Group PLC is that of a holding and
management company to the Group. More detailed information on the Group's
activities is set out in the Chairman's statement, the Chief Executive's
review and the Chief Finance Officer's review.
The unaudited Preliminary Report has been prepared using consistent accounting
policies with those of the previous financial year. It does not contain
sufficient information to comply with the disclosure requirements of
UK-adopted international accounting standards.
The Preliminary Report was approved by the Approvals Committee and the Audit
Committee and adopted by the Board of Directors. The Preliminary Report does
not constitute statutory financial statements within the meaning of section
434 of the Companies Act 2006 and has not been audited.
On 22 June 2023, the Group acquired the entire share capital of Wessex
EcoEnergy Limited, an established UK based solar panel installation business,
for consideration of £2.55 million. The results of Wessex EcoEnergy Limited
are consolidated within the financial statements.
The accounting policies adopted, other than as documented above, are
consistent with those of the annual financial statements for the year ended 31
December 2022, as described in those financial statements.
The Preliminary Report is presented in pounds sterling because that is the
currency of the primary economic environment in which the Group operates.
The Preliminary Report will be announced to all shareholders on the London
Stock Exchange and published on the Group's website on 26 March 2024. Copies
will be available to members of the public upon application to the Company
Secretary at Good Energy, Monkton Park Offices, Monkton Park, Chippenham,
Wiltshire, United Kingdom, SN15 1GH.
2. Segmental Analysis
The chief operating decision-maker has been identified as the Board of
Directors (the 'Board'). The Board reviews the Group's internal reporting in
order to assess performance and allocate resources. Management has determined
the operating segments based on these reports. The Board considers the
business from a business class perspective, with each of the main trading
subsidiaries accounting for each of the business classes. The main segments
are:
· Supply companies (including electricity supply, FiT administration
and gas supply);
· Energy as a service (including Good Energy Works, Wessex EcoEnergy
and Zapmap)
· Holding companies, being the activity of Good Energy Group PLC.
The Board assesses the performance of the operating segments based primarily
on summary financial information, extracts of which are reproduced below. An
analysis of profit and loss, assets and liabilities and additions to
non-current assets, by class of business, with a reconciliation of segmental
analysis to reported results follows:
Segmental analysis: 31 December 2023 (Unaudited)
Electricity Supply FIT Administration Gas Supply Total Supply Companies Energy as a service Holding Companies/Consoli-dation Adjustments Total - Continuing Operations
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Revenue from external customers 204,815 5,464 41,402 251,681 3,043 (21) 254,703
Total revenue 204,815 5,464 41,402 251,681 3,043 (21) 254,703
Expenditure
Cost of sales (163,234) (640) (43,754) (207,628) (2,851) 21 (210,458)
Gross Profit 41,581 4,824 (2,352) 44,053 192 - 44,245
Administrative expenses (33,049) (3,424) - (36,473)
Net other operating income 88 83 - 171
Depreciation & amortisation (718) (37) (54) (809)
Operating profit/(loss) 10,374 (3,186) (54) 7,134
Net finance income/(costs) 754 (16) (162) 576
Share of loss of associate - (2,027) - (2,027)
Profit/(loss) before tax 11,128 (5,229) (216) 5,683
Segments assets & liabilities
Segment assets 38,822 1,516 71,587 111,925
Segment liabilities (7,779) (4,985) (57,156) (69,920)
Net assets/(liabilities) 31,043 (3,469) 14,431 42,005
Additions to non-current assets 2,945 157 2,434 5,536
All turnover arose within the United Kingdom.
Segmental analysis: 31 December 2022
Electricity Supply FIT Administration Gas Supply Total Supply Companies Energy as a service Holding Companies/Consoli-dation Adjustments Total - Continuing Operations
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Revenue from external customers 205,942 5,588 36,500 248,030 652 - 248,682
Total revenue 205,942 5,588 36,500 248,030 652 - 248,682
Expenditure
Cost of sales (190,391) (688) (27,516) (218,595) (196) 23 (218,768)
Gross Profit 15,551 4,900 8,984 29,435 456 23 29,914
Administrative expenses (20,685) (2,041) (3,577) (26,303)
Net other operating (costs)/income (156) 170 52 66
Depreciation & amortisation (1,806) - - (1,806)
Operating profit/(loss) 6,788 (1,415) (3,502) 1,871
Net finance (costs)/income (96) (3) 381 282
Gain arising on loss of control of subsidiary 7,767 7,767
Share of loss of associate - (712) - (712)
Profit/(loss) before tax 6,692 5,637 (3,121) 9,208
Segments assets & liabilities
Segment assets 68,248 56 48,038 116,342
Segment liabilities (60,156) (279) (16,921) (77,356)
Net assets/(liabilities) 8,092 (223) 31,117 38,986
Additions to non-current assets 133 133
All turnover arose within the United Kingdom.
3. Finance Income and Finance Costs
Finance income: 2023 2022
£'000 £'000
Unaudited
Bank and other interest receivable 434 17
Preference share dividends 463 187
Discount on purchase of preference shares - 429
897 633
Finance costs: 2023 2022
£'000 £000
Unaudited
On corporate bond 220 237
Other interest payable 18 70
Interest on lease liabilities 83 44
321 351
4. Earnings per Share
Basic
Basic earnings per share is calculated by dividing the profit attributable to
owners of the Company by the weighted average number of ordinary shares during
the year. At the year end, there were no (2022: 79,924) shares held by Clarke
Willmott Trust Corporation Limited in trust for the Good Energy Group Employee
Benefit Trust. The Employee Benefit Trust was wound up during 2023.
2023 2022
Unaudited
Profit attributable to owners of the Company (£'000) 2,876 9,227
Basic weighted average number of ordinary shares (000's) 16,793 16,575
Basic earnings per share 17.1p 55.7p
Continuing operations 2023 2022
Unaudited
Profit attributable to owners of the Company (£'000) 2,876 8,571
Basic weighted average number of ordinary shares (000's) 16,793 16,575
Basic earnings per share 17.1p 51.7p
Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares to assume conversion of all potentially dilutive
ordinary shares. Potentially dilutive ordinary shares arise from awards made
under the Group's share-based incentive plans.
Where the vesting of these awards is contingent on satisfying a service or
performance condition, the number of potentially dilutive ordinary shares is
calculated based on the status of the condition at the end of the period.
Potentially dilutive ordinary shares are dilutive only when the average market
price of the Company's ordinary shares during the period exceeds their
exercise price (options) or issue price (other awards). The greater any such
excess, the greater the dilutive effect.
The average market price of the Company's ordinary shares during the year was
209p (2022: 242p).
4. Earnings per Share (continued)
The dilutive effect of share-based incentives was 169,580 shares (2022: 10,497
shares). The dilutive effect of share-based incentives for continuing
operations was 169,580 shares (2022: 10,497 shares).
2023 2022
Unaudited
Profit attributable to owners of the Company (£'000) 2,876 9,227
Weighted average number of diluted ordinary shares (000's) 16,963 16,585
Diluted earnings per share 17.0p 55.6p
Diluted (continuing operations) 2023 2022
Unaudited
Profit attributable to owners of the Company (£'000) 2,876 8,571
Weighted average number of diluted ordinary shares (000's) 16,963 16,585
Diluted earnings per share 17.0p 51.7p
5. Borrowings
2023 2022
£'000 £'000
Current Unaudited
Corporate bond 215 10
Lease liabilities 316 284
Total 531 294
2023 2022
£'000 £'000
Unaudited
Non-current
Corporate bond 4,726 4,921
Lease liabilities 961 6
Total 5,687 4,927
The current portion of the bond repayment represents the interest accrued and
the amount of principal repayments requested prior to the year end. The latest
redemption request deadline was in December 2023, for repayment of the
remaining bond in June 2024.
The bank and other borrowings are made up of interest accrued and the amount
of principal repayments under a Revolving Credit Facility.
6. Cash Generated from Operations
For the year ended 31 December 2023
2023 2022
£'000 £'000
Unaudited
Profit before tax 5,683 9,272
Adjustments for:
Depreciation 616 624
Amortisation 478 951
Transfers from/(to) restricted deposit accounts 2,550 (1,515)
Share based payments 341 198
Deferred tax movement charged to equity 239 -
Gain on closure of Employee Benefit Trust (43) -
Gain arising on loss of control of subsidiary - (7,767)
Gain on asset disposals 15 -
Gain on sale of assets held for sale - (64)
Share of loss of associates 2,027 712
Other finance costs/(income) - net (576) (281)
Changes in working capital (excluding the effects of acquisition and exchange
differences on consolidation):
Inventories (1,882) (1,509)
Trade and other receivables 22,345 (21,253)
Trade and other payables (11,162) 25,812
Cash generated from operations 20,631 5,180
7. Business Combinations
On 22 June 2023 the Group acquired 100% of the voting equity instruments of
Wessex EcoEnergy Limited, a company whose principal activity is the provision
of solar panel installations. The acquisition will enable the Group to build
on its strategy to accelerate its capability in decentralised energy services.
Recognised amounts of identifiable assets and liabilities acquired:
Book Value Fair Value
£'000 £'000
Property, plant and equipment 171 171
Intangible assets - 889
Inventories 362 362
Receivables 244 244
Cash 350 350
Payables (297) (297)
Borrowings (711) (711)
Deferred tax liability - (223)
Total identifiable net assets 119 785
Goodwill 1,768
Consideration 2,553
The fair value of trade receivables at the acquisition date is £103,911. The
gross contractual amount for trade receivables due is £103,911. All amounts
are expected to be collected.
Fair value of consideration paid £'000
Cash 2,553
Total consideration 2,553
Goodwill 1,768
The main factor leading to the recognition of goodwill is the presence of
certain intangible assets, such as the assembled workforce of the acquired
entity, which do not qualify for separate recognition. The goodwill recognised
will not be deductible for tax purposes. Acquisition costs of £634,000 arose
as a result of the transaction. These have been recognised as part of
administrative expenses in the statement of comprehensive income. No issue
costs have been recognised in respect of the transaction.
The results of Wessex EcoEnergy Limited since its acquisition are as follows:
Revenue: 2,073,572
(Loss): (38,106)
Since the acquisition date, Wessex EcoEnergy Limited has contributed
£2,073,572 to group revenues and a loss of £38,106 to the group's results.
If the acquisition had occurred on 1 January 2023 Good Energy's Group revenue
would have been £256,432,000 and group profit for the year would have been
£2,676,000.
8. Subsequent Events
A final dividend of 2.25p per share (2022: 2.0p) was proposed on 19 March
2024, subject to shareholder approval at the Group's AGM.
On 12 February 2024, Good Energy Group PLC acquired the entire issued share
capital of JPS Renewable Energy Ltd, a specialist solar and storage
installation and distribution business, and its wholly owned subsidiary, Trust
Solar Wholesale Ltd, a standalone distribution and procurement business, for
an initial consideration of £7m.
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