REG - Inspired PLC - Final Results 2024
31/03/2025 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250331:nRSe8238Ca&default-theme=true
RNS Number : 8238C Inspired PLC 31 March 2025
31 March 2025
Inspired PLC
("Inspired" or the "Group")
Final Results 2024
Accelerating client lifetime value and strengthened financial position
provide strong platform for long-term growth and cashflow generation
Inspired (AIM: INSE), the UK's leading energy and sustainability advisor,
announces its consolidated, audited final results for the year ended 31
December 2024.
Financial highlights
2024 2023 % change
Revenue £93.8m £98.8m (5.0)
Gross profit £69.7m £67.3m 3.6
Adjusted EBITDA(1) £23.0m £25.2m (8.8)
Adjusted profit before tax(2) £11.9m £15.8m (24.7)
Statutory profit/(loss) before tax £11.8m £(6.2)m -
Underlying cash generated from operations(3) £21.2m £18.7m 13.0
Free cash flow £3.9m £3.2m 21.9
Adjusted diluted EPS(4) 8.5p 13.4p (36.5)
Diluted basic EPS 8.7p (7.2p) -
Net debt £59.2m £48.7m 21.6
Dividend per share 2.45p 2.90p (15.5)
· Revenue of £93.8 million (2023: £98.8 million), with gross profit of £69.7
million (2023: £67.3 million), reflecting good underlying demand across all
four divisions. Optimisation Services was impacted by delays to three large
projects expected in 2024 now being delivered in H1 FY25.
· Adjusted EBITDA of £23.0 million (2023: £25.2 million), reflecting the
impact of the reduction in revenues and associated lost gross profit.
· Adjusted PBT of £11.9 million (2023: £15.8 million), primarily driven by the
reduction in Adjusted EBITDA, as well as increased finance costs.
· Free cash flow of £3.9 million (2023: £3.3 million), with an increase in
cash generated from operations of £21.2 million (2023: £18.7 million), in
part, offset by increase in finance expense and tax.
· Reported net debt at 31 December 2024 was 2.59x Adjusted EBITDA (2023: 1.93x),
following final contingent consideration payments of £10.8 million (2023:
£12.1 million). The Group has no outstanding contingent consideration
liabilities.
· Following completion of the £26.7 million fundraising in January 2025, Group
pro forma net debt/Adjusted EBITDA reduced to 1.47x5. The Group is on track
to achieve a target consolidated net debt/EBITDA ratio of 1x by the end of
FY256.
· Proposed final dividend of 1.0 pence, (2023: 1.5 pence), reflecting the
increased share capital, resulting in full year dividend of 2.45 pence (2023:
2.90 pence) maintaining the absolute cash distribution levels.
Divisional operational and strategic highlights
· The Group has delivered growth across all its operational KPIs in 2024.
· 10-year Client Lifetime Value (CLV)7 potential has increased to £277,840, a
20% increase (2023: £231,160).
· Number of clients supported by multiple divisions has increased to 675 (2023:
615).
Assurance Services
· Revenues of £36.6 million (2023: £36.3 million) and Adjusted EBITDA of
£14.8 million (2023: £15.0 million), at a margin of 41% (2023: 41%).
· Continued customer recruitment, strong retention rates and stabilisation of
margins.
· Entered FY25 with 82% of expected 2025 revenues contracted, and c.10% of
revenue anticipated from in-year renewals, with the remaining 8% expected from
new wins in the year supported by a strong pipeline.
Optimisation Services
· Generated gross profit of £27.7 million (2023: £26.6 million), a 4%
increase, reflecting product mix and with pass through costs, despite a 12%
reduction in revenues to £47.3 million (2023: £54.0 million).
· Adjusted EBITDA of £13.0 million (2023: £15.2 million), at a margin of 28%
(2023: 28%), reflecting opex costs associated with three large projects
initially expected to be completed in 2024, but where gross profit shifted
into FY25. All three projects have commenced and are planned to complete in H1
FY25.
· Demand continues to increase as customer pipelines grow and diversify.
ESG Services
· Revenue growth of 16% to £6.4 million (2023: £5.5 million) and Adjusted
EBITDA contribution to the Group of £1.4 million (2023: £1.5 million), at a
margin of 22% (2023: 27%) reflecting continued investment in talent within the
division to capture further growth opportunities.
Software Services
· Revenues up 18% to £3.5 million (2023: £3.0 million). This was driven by new
client acquisitions and an increase in revenue generated from retained
customers; with more than 85% of expected revenues in FY25 are coming through
renewals of existing customer licenses.
· Adjusted EBITDA of £2.2 million (2023: £1.8 million), at a margin of 62%
(2023: 59%).
· 10 new modules were launched during the year.
Current trading and outlook
The FY25 financial year has started well and in line with management's
expectations. The three significant Optimisation Projects are on track for
delivery in H1 FY25 as anticipated. The Board remains confident for FY25.
As has been well reported, the economic outlook remains uncertain and
geo-political instability continues to create volatility in energy prices.
This market volatility and ongoing European ESG regulations remain key demand
tailwinds for Inspired's services. The Group starts the year with a robust
pipeline of new business and the benefit of high retention rates across all
four divisions given the attractive ROI the Group provides to its clients,
which provide high visibility on FY25 revenues and beyond.
The recent strengthening of the Group's balance sheet, combined with ongoing
confidence in the growth potential of the Group, provide a strong platform for
long-term profitable growth and cash flow generation. These underpin
Inspired's continued ambition to double Adjusted EBITDA by YE 2027 alongside
the additional ambition of approaching a debt free position for the Group by
YE 2027.
Commenting on the results, Mark Dickinson, CEO of Inspired, said: "Our
stronger balance sheet provides a firm foundation to deliver Inspired's growth
strategy over the medium-term and our ambition to approach being debt free by
year end 2027. As a Group, we have seen a significant number of new clients
being signed up during the year and have grown our 10-year client lifetime
value by 20%. We continue to offer our clients excellent service and material
cost savings in their energy bills. The Group is trading in line with
management expectations in the first quarter, with a strong pipeline across
all four divisions, and has started the year with good momentum giving us
confidence in our future prospects."
Note
1. Adjusted EBITDA is earnings before interest, taxation, depreciation, and
amortisation, excluding exceptional items and share-based payments.
2. Adjusted profit before tax is earnings before tax, amortisation of intangible
assets (excluding internally generated amortisation related to computer
software and customer databases), exceptional items, share-based payments, the
change in fair value of contingent consideration and foreign exchange
gains/(losses) (A reconciliation of adjusted profit before tax to reported
profit before tax can be found in note 5)
3. Underlying cash generated from operations is cash generated from operations,
as adjusted to remove the impact of restructuring costs and fees associated
with acquisitions.
4. Adjusted diluted earnings per share represents the diluted earnings per share,
as adjusted to remove amortisation of intangible assets (excluding internally
generated amortisation related to computer software and customer databases),
exceptional items, share-based payments, the change in fair value of
contingent consideration and foreign exchange gains/(losses).
5. Pro forma net debt/Adjusted EBITDA uses the 31 December 2024 debt and adds
£25.4 million of net funds raised in January 2025, divided by the 2024
Adjusted EBITDA.
6. Net debt excludes the impact of £5m convertible loan notes issued as part of
the fund raise in January 2025.
7. Client Lifetime Value (CLV) is calculated as the average annual revenue for
each active client in a year between that year and 2020 multiplied by 10.
For further information, please contact:
Inspired PLC www.inspiredplc.co.uk
(https://url.avanan.click/v2/___http:/www.inspiredplc.co.uk___.YXAxZTpzaG9yZWNhcDphOm86ZGVkMmZlMmM1ZmEyYzEyOTFhZDM0NGMwYTUyMWY0Zjc6NjpmZmIxOmEyZmZjNzUzNjVkNGI5MGM4YzI3MGE3YmYzMjgzYzQxYzRjZjQ4NmI3ZDcwZTQ2OGQwMjRhYTg4NTc5NTA0YzI6cDpU)
Mark Dickinson (Chief Executive Officer)
+44 (0) 1772 689250
Paul Connor (Chief Financial Officer)
David Cockshott (Chief Commercial Officer)
Shore Capital (Nominated Adviser and Joint Broker) +44 (0) 20 7408 4090
Patrick Castle / James Thomas / Sophie Collins
Panmure Liberum (Joint Broker) +44 (0) 20 7418 8900
Edward Mansfield / Satbir Kler / Joshua Borlant
Alma Strategic Communications +44 (0) 20 3405 0205
Justine James / Hannah Campbell / Will Ellis Hancock +44 (0) 7525 324431
inspired@almastrategic.com
Chairman's Statement
Overview of the year and the financial results
Inspired has delivered another year of good underlying progress, seeing
positive momentum in both demand and our forward pipeline across all our
divisions, albeit profits are below our initial expectations. I would like to
thank everyone in the team for their hard work during the year. The Group
remains well placed to service the growing demand from companies to reduce
energy consumption, drive cost and operational efficiencies and comply with
reporting requirements against progress relating to ESG.
The financial performance of 2024 reflects two main factors - the
normalisation of the energy market after the extreme volatility seen in 2023
and a timing impact of three large Optimisation contracts, that have all since
commenced in 2025. Both are short-term factors that do not impact the
long-term value proposition of Inspired. Our Adjusted EBITDA and Adjusted PBT
are in line with updated market expectations.
Inspired successfully completed a fundraise in January 2025, including £21.6m
of new equity and £5m of convertible loan notes (before fees and expenses).
With this additional capital, the Group's balance sheet has been transformed,
and the Group is well placed to go after the material organic growth
opportunities across our markets. I would like to thank our shareholders for
supporting Inspired on this fundraise.
The Group's balance sheet was further strengthened by the termination of the
Deed of Variation in August 2024, eliminating any remaining contingent payment
obligations related to the Ignite acquisition. The Group enters FY25 with no
further contingent payment liabilities.
Today, we are very well placed to take advantage of the structural growth
opportunities across the Group, given its diverse product offering, high
quality reputation and track record of offering clients attractive ROI. All
four divisions offer high value products and services for clients, and all
continue to contribute to driving higher client life-time value potential.
ESG
As a service provider helping businesses deliver market leading ESG
disclosures, it is important that the Group is at the forefront of ESG
performance. During FY24, the Group made further progress towards its ESG
objectives.
Dividend
Inspired has established a track record of delivering profitable and
cash-generative growth which has facilitated a consistent and progressive
dividend policy.
Accordingly, the Board proposes a final dividend of 1.0 pence (2023: 1.5
pence), subject to shareholder approval at the AGM in June, resulting in a
full year dividend of 2.45 pence (2023: 2.90 pence). The dividend represents a
resetting of dividend per share after the new ordinary share placing in
January 2025, whilst maintaining the expected absolute cash distribution
levels. The dividend will be payable on 25 July 2025 to all shareholders on
the register on 20 June 2025 and the shares will go ex-dividend on 19 June
2025.
Ahead of the interim results publication, the Board intends to review its
capital allocation and future dividend policy in consultation with
shareholders, acknowledging its ambition to be approaching a debt free
position by YE27.
Summary and outlook
Inspired made good progress in FY24, and the Group radically enhanced its
financial footing via its capital raise with no further contingent
consideration payments outstanding. As a result, the Group is set up to
deliver on its strategic growth plan, with all four divisions delivering
positive momentum in 2024. The Group enters FY25 with strong pipeline across
all divisions and year to date trading is in line with management
expectations.
The additional financial ambition of becoming debt free demonstrates
confidence in the long-term success of Inspired and our cash generation
potential as we look ahead.
Richard Logan
Chairman
28 March 2025
Chief Executive Officer's Statement
Overview: Significant progress delivered in 2024
Inspired delivered another significant strategic step forward in 2024, with
progress on all of our operational KPIs, with our key KPI of 10-year client
life-time value ('CLV') potential increased by 20% to £277,840. Equally
importantly, we successfully completed a fundraise in January 2025, with the
support of existing and new shareholders, to strengthen our financial
position. With leverage addressed, the Group can focus on growth and cash
generation and is on course to achieve a net debt/Adjusted EBITDA ratio of
c.1.0x by the end of FY25 compared to 2.59x at YE2024. The Group is now well
capitalised and will continue to execute on its long-term growth plans,
investing to drive growth, improve profitability and ultimately deliver
improved free cash flow.
Our 2024 financial performance somewhat masks the strong underlying momentum
we have created across the Group. As notified in December 2024, the Group had
three large contracts within the Optimisation division that were delayed and
consequently had a negative impact on our revenues and Adjusted EBITDA for the
year. All three contracts have commenced and will contribute to our H1 FY25
financial performance. Individual Optimisation projects can be significant
individual contributors to the Group's performance today. As we look to scale
up the volume and frequency of Optimisation projects, which we expect to start
to happen in FY25, the impact of individual projects will diminish in future
years as the Group benefits from a broader portfolio effect. The Group will
continue to drive growth in the division to create long-term value.
There is positive momentum across Inspired which, with the support of our
stronger balance sheet and dedicated team, enables us to provide critical
solutions to clients as they adapt to the challenges of saving costs in their
energy bills, compliance with ESG disclosure requirements, delivery of energy
efficiency projects and meeting their obligations to achieve net zero. I would
like to thank the team for their hard work, dedication and commitment to
Inspired.
Strategy
At its heart, our strategy remains to drive growth and maximise client
life-time value opportunities by consistently demonstrating that we are the
leading energy and sustainability adviser in our end markets. The Group is
well placed to take advantage of structural tailwinds around energy
efficiency, ESG disclosure and net-zero.
We are focused on three priorities that will help us achieve our strategy -
with a focus on customer recruitment, customer retention and delivering
attractive ROI to our customers and consequently to our Group.
Recruitment: The Group has attractive organic growth opportunities in the
short and medium term, having demonstrated a track record of taking advantage
of the market tailwinds and establishing a reputation as a trusted adviser.
Recruitment of new clients, either new to the Group or new to a division,
drives our organic growth, which in turn is a key input to driving Inspired's
client life-time value model.
During the year, we recruited 170 new clients to the Group, with 100
commencing with the Assurance Division, 59 with the ESG Division and 11 with
both. In addition, the number of clients supported by multiple divisions
increased to 675 from 615 in 2023. Our Assurance Division continues to be a
vital source of cross-selling of clients into our Optimisation and ESG
divisions.
Retention: Client retention is key for the Group's long-term success for value
creation. By leveraging our proprietary software platform to manage our
clients' data and by delivering first class service, efficiency improvements
and cost savings, we retain clients. Client retention rates are among the best
in the industry for our Assurance and Software Divisions, both of which have
client retention rates at over 85%. While our ESG division is newer and seeing
faster new client recruitment, our retention rates is also highly attractive.
In Optimisation the client revenue is more transactional than the other
divisions, with repeatable demand for services. During FY24 the number of
repeat Optimisation clients was 244 (2023: 208).
As the Group becomes more embedded into our clients' processes, through our
excellent customer service and trusted advisor position, we will build the
average 10-year potential life-time value. Our strategy of enhancing C-suite
relationships has helped improve retention across our portfolio. In 2024,
10-year potential CLV increased 20% to £277,840 (2023: £231,160).
ROI: Our focus on delivery of attractive return on investment is two-fold.
First - we apply relentless focus on delivering cost efficiency and cost
avoidance for our clients across all four divisions. Delivering at attractive
ROI to our clients is a key reason for our high retention rates. Across our
Assurance division we achieved an average 5x ROI for the year for our clients.
Second - we are focused on delivering attractive ROI for the Group, through
operational and capital efficiency. The Group delivered an improved
performance in our central cost to sales ratio in 2024 on an underlying basis,
although the revenue deferral into 2025 from three large Optimisation projects
means the impact will only be seen in FY25.
Third - working capital is most of the capital employed in our business, and
we have invested in it to support our Optimisation business in recent years,
given the long-term growth potential for the division. The Optimisation
pipeline has seen strong growth during the year, underpinning our confidence
that this investment will deliver attractive returns. In 2024, our net working
capital ('NWC') to sales ratio was 21% in 2024 (2023: 15%) as a result of the
negative timing impact of the three large optimisation projects. The Group
continues to focus on improving cash conversion ratios, and in turn NWC sales
ratio to drive an improvement in free cash flow.
The focus on these three strategic priorities has resulted in significant
progress against all our operational KPIs during 2024, as summarised in the
table below.
2020 2021 2022 2023 2024
Number of clients supported by multiple divisions within Inspired 307 414 492 615 675
Number of clients generating >£50,000 in revenue 114 123 154 227 242
Number of >£50,000 revenue clients supported by more than one division 49 69 104 159 183
Average 10 Year CLV (£) potential per client(1) 102,468 119,079 161,109 231,160 277,840
Number of clients with Optimisation Projects in the FY 151 194 271 370 412
Number of repeat Optimisation clients(2) 79 94 142 208 244
Notes:
1. 10 Year CLV is calculated as the average annual revenue for each active client
in a year between that year and the 3 previous years multiplied by 10.
2. Clients that have used Inspired to undertake an optimisation project in
previous financial years.
Assurance Services
Assurance Services helps businesses manage all aspects of energy and utility
pricing data and accounting. In 2024, the division created strong momentum in
new business generation, with low churn rates, to deliver revenue growth at
stable margins. The division has access to some of the largest, most exciting
companies, which we leverage through cross-selling opportunities to win
further ESG reporting and Optimisation revenues from clients.
The delivery of a quality service to our clients meant we continue to expand
our client base. During 2024, we were delighted with some new Assurance client
wins including: Young & Co.'s Brewery, Student Roost, Paddy Power, Ideal
Standard, and Eurosport in H1, in addition to Progress Housing Group,
Butternut Box, MBA Polymers UK Ltd, University of Wolverhampton and Future
Inns in H2.
Optimisation Services
The successful execution of our strategy to establish ourselves, through the
provision of our data rich Assurance and ESG services, as a trusted adviser
with the C-suite, provides a platform to deliver sustainability solutions to
existing clients through our Optimisation Services division.
In the year, the division delivered 85 large sustainability solutions to
existing clients (2023: 69), of which 52% were clients that have previously
procured Optimisation Services. A further 327 (2023: 301) existing Assurance
and ESG clients procured smaller sustainability solutions, of which 61% were
repeat demand from existing Optimisation Services. Further to the integration
of the Ignite and Inspired Optimisation Divisions, our capacity to develop and
design solutions that reduce energy consumption and carbon emissions for
clients is significantly increased reflected in an increasing pipeline of
Optimisation Solutions.
Our 2024 financial performance is not representative of the underlying
momentum within Optimisation Services, which is underpinned by a growing
pipeline. As announced in December 2024, three large contracts within the
Optimisation Division were delayed, which consequently impacted on revenues
and Adjusted EBITDA performance. All three contracts have commenced and will
positively impact our H1 FY25 financial performance. As we continue to scale
up our Optimisation Division and diversify our customer and project base, the
irregular nature of the projects may, from time-to-time, cause volatility in
the results of the division. As we continue to work to mitigate the
concentration risk, broadening the project portfolio, it should be noted that
the timing of these larger projects does not impact the underlying value of
the Group.
Optimisation Services generated revenues amounting to £47.3 million (2023:
£54.0 million), a reduction of 12%. Absolute gross profit growth of the
division is a truer reflection of the Optimisation Services division's
performance given the variance on revenue driven by product mix with pass
through costs, and this grew marginally in the year to £27.7 million (2023:
£27.0 million), despite the negative timing impact of the three delayed
projects. This reflects the underlying progress for the division.
Looking forward and noting the proven capability of expanding our cross-sell
opportunities, this division provides a gateway to the £138 billion
opportunity over the next 25 years for the delivery of energy efficiency and
net-zero for commercial buildings and industrial processes in the UK market.
ESG Services
ESG Services helps businesses make revenue-critical ESG disclosures to retain
their customers, comply with regulations and attract investment. The Group is
uniquely positioned to implement the decarbonisation solutions we design
through the Optimisation Services division, allowing our clients to achieve
their net-zero ambitions.
ESG Services delivered 17% organic revenue growth with new client wins
(including: Crest Nicholson Holdings, DPD Group, IMO Car Wash Group and,
Giacom (Communications) Limited ) and cross sells to existing Group customers
(including Headlam Group, McAlpine & Co, British Car Auctions).
As we look ahead to 2025, we are committed to not only expanding our ESG
division's client base but also to innovating new services that empower our
clients to tackle the challenges and seize the opportunities presented by the
Corporate Sustainability Reporting Directive (CSRD), the upcoming UK
Sustainability Reporting Standards (SRS), and the Taskforce on Nature-related
Financial Disclosures (TNFD), among others.
Our clients' journey towards low-carbon operations will be a top priority. We
will focus on driving meaningful engagement with suppliers and fostering
knowledge sharing throughout the entire value chain. By doing so, we aim to
equip businesses with the tools they need to actively contribute to the UK's
transition to a sustainable, low-carbon economy.
Software Services
Inspired's Assurance, ESG and Optimisation Services rely heavily on managing
and processing unstructured data which underpins our service delivery. The
technology enablement of these solutions is provided by 'Unify', our
proprietary software platform which has been significantly developed over
recent years and provides a market leading platform.
Unify is helping to technologically enable a market and industry that has in
the past been slow to react and incorporate digital solutions to improve
efficiency and performance. The Software division has delivered growth
consistent with the prior period, with new client wins and high levels of
client retention; it underpins the Group's delivery of broader services.
The Software Services division delivered 18% revenue growth and 25% growth in
Adjusted EBITDA, reflecting the benefits from operating leverage of investment
in prior periods.
The division is the go-to software platform of choice for large assurance
providers, and we continue to focus on increasing the number of meters served
by our SaaS platform.
Inspired's own ESG
As a service provider committed to enabling businesses to achieve
market-leading ESG disclosures, the Group recognises the importance of leading
by example in ESG performance. During FY24, we made remarkable progress
towards our ESG objectives including
1. We re-submitted our revised Scope 1 and 2 net-zero targets, along with our
long-term Scope 3 net-zero target, to the Science-Based Targets Initiative
(SBTi), proudly receiving approval in early 2025.
2. We prepared our first Integrated ESG Report, fully compliant with the latest
EU legislation, specifically the Corporate Sustainability Reporting Directive
(CSRD). This report includes our reporting under the Global Reporting
Initiative (GRI) and the Task Force on Climate-related Financial Disclosures
(TCFD), and it will feature our inaugural Taskforce on Nature-related
Financial Disclosures (TNFD).
3. We conducted biodiversity assessments across the Inspired Estate, laying the
groundwork for our upcoming TNFD, featured in our Integrated ESG Report.
4. We performed energy efficiency surveys throughout the Inspired Estate,
unveiling opportunities for meaningful energy savings.
5. We established a dynamic supplier engagement working group to craft our
supplier engagement policy, fully aligned with our SBTi supplier engagement
targets.
6. We drafted our STEM policy for project implementation in the first half of
2025, setting the stage for a transformative STEM program.
7. We launched the Inspired Benefits Platform, enhancing our commitment to our
employees.
8. We piloted the Peatbog charitable workday initiative, a powerful step towards
our Inspired Charity Day Work Policy set for 2025.
Current trading and outlook
The FY25 financial year has started well and in line with management's
expectations. The three significant Optimisation Projects are on track for
delivery in H1 FY25 as anticipated. The Board remains confident for FY25.
As has been well reported, the economic outlook remains uncertain and
geo-political instability continues to create volatility in energy prices.
This market volatility and ongoing European ESG regulations remain key demand
tailwinds for Inspired's services. The Group starts the year with a robust
pipeline of new business and the benefit of high retention rates across all
four divisions given the attractive ROI we provide to our clients, which
provide high visibility on FY25 revenues and beyond.
The recent strengthening of our balance sheet, combined with our ongoing
confidence in the growth potential of the Group provide a strong platform for
long-term profitable growth and cash flow generation. These underpin our
continued ambition to double Adjusted EBITDA by YE 2027 alongside our
additional ambition of approaching a debt free position for the Group by YE
2027.
Mark Dickinson
Chief Executive Officer
28 March 2025
Chief Financial Officer's Statement
I am pleased to report financial results for the year ended 31 December 2024,
with the Group delivering a robust operational and financial performance
during the year, whilst also making clear strategic and financial progress.
2024 was a year in which saw a 5% decrease in revenue, with total revenues of
£93.8 million compared to £98.8 million in 2023, but a 4% increase in gross
profit to £69.7 million (2023: £67.3 million). Group Adjusted EBITDA
decreased by 9% to £23.0 million (2023: £25.2 million). In percentage terms,
the Adjusted EBITDA margin was 25% (2023: 26%), reflecting an investment in
operating costs to facilitate the expected growth impacted by delays in the
Optimisation Services division as three large projects shifted into FY25.
Divisional performance
Assurance Services
Assurance Services delivered 39% of total Group revenues in 2024 (2023: 37%)
at £36.6 million (2023: £36.3 million), an increase of 1%.
The division contributed Adjusted EBITDA in line with expectations of £14.8
million (2023: £15.0 million), with Adjusted EBITDA margins stabilising at
41% (2023: 41%), as we retain our objective to provide a first-class level of
service to our Assurance clients, which we believe is essential to continue to
be the market leaders in Assurance Services.
The Assurance Services division entered FY25 with 82% of expected 2025
revenues contracted (2023: 81%), an expectation of 10% of revenue coming from
in year renewals (2023: 14%), underpinned by customer retention rates during
2024 at 88% (2023: 90%), with the balancing 8% expected to come from new wins
in year (2023: 5%). This provides confidence that the division will continue
to contribute revenue growth in FY25.
The division already has 60% of its 2026 revenues contracted (2023: 56%), an
expectation of a further 24% from renewals to be secured in 2025 and 2026
(2023: 32%), and 16% expected from new wins in 2025 and 2026 (2023: 12%).
Optimisation Services
Optimisation Services generated 50% of total Group revenues in 2024 (2023:
55%), amounting to £47.3 million (2023: £54.0 million), a reduction of 12%.
Optimisation Services contributed gross profit in line with the prior year of
£27.7 million (2023: £27.0 million) which we believe is a better measure of
growth within this area. Adjusted EBITDA of £13.0 million (2023: £15.2
million), showed a reduction of 14%, as a result of an increase in staff costs
and other operating expenditure as the division increased capacity in
expectation of delivering gross profit and Adjusted EBITDA growth in the
period prior to the deferral of gross profit contribution through the delay in
deliver of the three large optimisation projects in H2 2024.
The division continues to see growth and diversification of the customer
pipeline, benefitting from cross-selling and repeat demand from customers,
with clients focusing on the beneficial impact of energy usage and demand
reduction.
Adjusted EBITDA margin for 2024 was in line with prior year at 28% (2023:
28%), driven by product mix. Subject to product mix, management's expectation
is that the division will consistently generate Adjusted EBITDA margins of
c.20-30%, noting that revenue growth and profit margins can vary due to
product mix in any reporting period within the Optimisation Services division.
Demand for Optimisation Services continues to increase, with strong underlying
drivers, including the drive to net-zero, and further accelerated by the high
commodity prices. As the division is expected to continue to represent a
greater proportion of Group revenues from FY25 onwards, Group margins will
reflect the change in business mix.
ESG Services
ESG Services generated revenues of £6.4 million (2023: £5.5 million),
delivering 17% growth. The ESG Services division delivered Adjusted EBITDA of
£1.4 million (2023: £1.5 million), as the division continues to invest in
talent to deliver further growth.
Within ESG Services, there was £1.7 million of revenue (2023: £1.9 million)
from delivery of services in relation to the Energy Savings Opportunity Scheme
(ESOS). The Group noted previously that this revenue is cyclical being based
on the phases of the scheme, but we have continued to see this service line
develop into a recurring revenue stream for the division. ESOS services
contribute a lower GP margin than other ESG services at c.40%.
The ESG Services division delivered retention rates for recurring revenue
services of 89% in 2024 (2023: 89%).
With these high levels of customer retention, and the division entering 2025
with over 65% of the 2025 forecast revenue already contracted (2023: 65%), the
Group has confidence in the ESG Services division continuing its growth
trajectory in 2025.
The increasing focus of businesses on net-zero targets, combined with
mandatory requirements for businesses to make ESG disclosures, provides a
favourable backdrop to continue to invest in the strategy for the ESG Services
division.
Software Services
The Group's Software Services division continues to develop well, with
revenues growing by 18% to £3.5 million (2023: £3.0 million), with the
growth driven by new client acquisition and an increase in revenue generated
from existing customers, as the Group continues to add additional modules to
its existing platform.
Software Services generated Adjusted EBITDA of £2.2 million (2023: £1.8
million) and produced an Adjusted EBITDA margin of 62% (2023: 59%), reflecting
the benefits of investment in capacity in prior periods.
The Software Services division delivered retention rates for recurring revenue
services of 92% in 2024 (2023: 95%), with in excess of 85% of expected
revenues in 2025 coming through renewals of existing customer licenses (2023:
80%).
Group results
Group central PLC costs were £8.4 million (2023: £8.2 million). As expected,
the Group has seen a deceleration of PLC cost growth in 2024, as the Group
benefits from operating leverage and improved productivity.
Overall, the Group generated Adjusted EBITDA for the year of £23.0 million
(2023: £25.2 million); the Adjusted EBITDA margin was 25% (2023: 26%). This
reduction is as a result of the increase in staff costs as we invested in
increased capacity to support future growth and operating expenditure as the
Optimisation division, increased capacity in expectation of delivering gross
profit and Adjusted EBITDA growth in the period prior to the delay in deliver
of three large optimisation projects in H2 2024.
After deducting charges for depreciation, amortisation of internally generated
intangible assets and finance expenditure, the adjusted profit before tax for
the year was £11.9 million (2023: £15.8 million). Finance costs of £5.8
million (2023: £4.5 million) were higher due to a higher level of average
debt over the year.
Under International Financial Reporting Standard (IFRS) measures, the Group
reported a profit before tax for the year of £11.8 million (2023: loss of
£6.2 million), with reported profit before tax in the year impacted by
changes in the fair value of contingent consideration, charges for the
amortisation of intangible assets as a result of acquisitions, share-based
payment charges and restructuring costs. A reconciliation of reported
profit/(loss) before tax to adjusted profit before tax is calculated in the
table below.
2024 2023
£000 £000
Reported profit/(loss) before income tax 11,769 (6,169)
Share-based payment cost 893 1,187
Amortisation of acquired intangible assets 1,475 2,272
Foreign exchange variance 12 (257)
Change in fair value of contingent consideration (4,870) 14,621
Finance expenditure - 482
Exceptional costs 2,571 3,620
Adjusted profit before income tax 11,850 15,756
Alternative performance measures
Acquisition activity, non-recurring items and material items can significantly
distort underlying financial performance from IFRS measures. The Board
therefore considers it appropriate to report adjusted metrics, as well as IFRS
measures, for the benefit of primary users of the Group's financial
statements. Reconciliations to Adjusted Profit Before Tax and Adjusted Fully
Diluted EPS can be found in note 5.
Exceptional costs
Exceptional costs of £2.6 million (2023: £3.6 million) were incurred in the
year. Exceptional costs include £0.6 million for the performance fees in
relation to FY24 performance payable to the vendors of the Ignite business (as
detailed below), £0.4 million in relation to the restructuring of the Group's
Irish subsidiary Horizon Energy Group Limited, £0.4m settlement of claim and
associated professional fees, £0.4 million in relation to acquisition
activity, £0.2 million of onerous lease costs resulting from the Group's
consolidation of its office portfolio, and £0.6 million in relation to
restructuring costs.
Change in fair value of contingent consideration
The fair value of contingent consideration at the balance sheet date is a
judgement of the contingent consideration which will become payable based on a
weighted average range of performance outcomes of the acquired business during
earn out periods reflecting uncertainty in future periods, which is
subsequently discounted at a risk-free rate for the time value of money.
The Group recognised a £4.9 million gain (2023: loss of £14.6 million) in
the period as a result of changes in the fair value of contingent
consideration which was treated as exceptional. The gain was primarily driven
by the Group accelerating the integration of Ignite and terminating the Deed
of Variation (Deed of Termination) in relation to Ignite Energy LTD, and as a
result has no outstanding contingent consideration payment obligations in
relation to the Ignite Energy LTD transaction. Following payment of the final
contingent consideration payment relating to the acquisition of Businesswise
Solutions Ltd of £2.2m in H2 2024, the Group has no further contingent
consideration payments to fund, and therefore contingent consideration on the
balance sheet at 31 December 2024 is zero.
On entering the Deed of Termination, the Group has also entered into
consultancy agreements with the vendors of Ignite for the period ending 31 May
2025 (Restructuring Period). The consultancy agreement contains a monthly fee
payable to each consultant, which is equivalent to their previous employment
contract and also includes a performance fee based on gross margin targets for
Ignite during the Restructuring Period (Performance Fee). Based on
Management's current expectations for the Ignite business, the total
Performance Fee would be £1.1m, a reduction for initial expectation of
£2.3m, following the deferral of the three significant optimisation projects
the Performance Fee will be payable in two instalments over 2025.
Exceptional costs, amortisation and impairment of internally generated
intangible assets, share based payment charges and changes in fair value of
contingent consideration are considered by the Directors to be material and
exceptional in nature; they, therefore, merit separate identification to give
a true and fair view of the Group's result for the period.
Cash and working capital
Group cash generated from operations during the period was £18.2 million
(2023: £15.9 million), an increase of 14%. Excluding exceptional costs, cash
generated from operations was £21.2 million (2023: £18.7 million).
Underlying operating cash conversion ratios remain a key focus for management,
acknowledging the need to facilitate the growth within the Optimisation
Services division.
Free cash flow during the year was £3.9 million (2023: £3.2 million), with
the increase in cash generated from operations, in part, offset by increase in
interest and tax. Post the fundraise completed in January 2025, the Group is
now well positioned to execute on its long-term growth plans to deliver
improved profitability and free cash flow generation leading it to becoming
debt free.
Trade and other receivables and deferred consideration increased 11% in the
period to £51.7 million (2023: £46.5 million), with invoiced trade
receivables reducing 27% to £12.9 million (2023: £17.6 million). This
reduction in receivables was the result of the very high levels of project
activity in Q4 2023 within the Optimisation Services division unwinding in
early 2024 as expected; the comparative Q4 in 2024 delivered lower levels of
Optimisation project activity year on year.
Accrued income increased in the period by 53% to £30.3 million (2023: £19.9
million), with £10.5 million (2023: £4.1 million) being recoverable in
greater than 12 months, being driven by strong performance of share of savings
revenue lines within Optimisation in 2024.
Trade and other payables increased £3.2 million (16%) to £23.1 million
(2023: £19.9 million). There was a £2.4 million (37%) reduction in trade
payables to £3.9 million (2023: £6.3 million) reflecting lower Optimisation
activity levels in Q4 2024. This was offset by a £5.8 million increase in
deferred income to £7.9 million (2023: £2.1 million) with a continued focus
on improving payment terms; and accruals increased by 16% to £5.3 million
(2023: £4.6 million). Working capital management remains a key focus for the
Group in sustaining strong cash conversion.
The Group made payments to acquire intangible assets of £5.8 million in 2024
(2023: £5.6 million), and payments to acquire property, plant and equipment
of £0.8 million (2023: £0.9 million).
Financial position and liquidity
At 31 December 2024, the Group's net debt was £59.2 million, excluding the
impact of IFRS 16, increasing from £48.7 million at 31 December 2023, being
2.59x Adjusted EBITDA at year-end 2024 (2023: 1.93x).
The Group held cash and cash equivalents of £5.2 million on hand as at 31
December 2024 (2023: £8.8 million).
In May 2024, the Group agreed an increase in the Revolving Credit Facility to
£65.0m until 30 April 2025 to provide additional liquidity in the period in
which the Group pays the final outstanding contingent consideration payments.
The Group's £65.0m Revolving Credit Facility was fully drawn at 31 December
2024.
The facility is subject to two covenants, which are tested quarterly: adjusted
leverage to Adjusted EBITDA (Adjusted Leverage Covenant) and Adjusted EBITDA
to net finance charges (Interest Cover). Under the refinanced facility, the
Group reset the Adjusted Leverage Covenant, with an increase in headroom to
2.75:1.00 through to June 2024, tapering to 2.50:1.00 from June 2024 to June
2025, and then tapering to 2.00:1.00 across the remainder of the facility.
Interest Cover is not to be less that 4.00:1.00 across the term of the
facility.
Subsequently, in November 2024, the Group agreed with its banking partners a
resetting of the adjusted leverage and interest cover covenant for quarter
ending 31 December 2024 to 3.00x and 3.50x respectively, increasing the
headroom available to the Group from a covenant perspective. From 31 March
2025, covenant levels revert to those mentioned above.
In January 2025, the Group raised £21.66m in aggregate (before fees and
expenses) through a placing of 54,150,535 placing shares at an issue price of
40.0p per placing share. In addition, the Company issued Convertible Loan
Notes ('CLNs') with an aggregate principal amount of £5 million to Gresham
House Asset Management and Regent Gas (its two largest shareholders), which
can be converted into new Ordinary Shares in part or full at any time during
the two year term of the CLNs at a conversion price of 80.0p per ordinary
share.
The Group is utilising the proceeds of the placing and the CLN to strengthen
its balance sheet, helping Inspired pursue and achieve a consolidated net
debt/Adjusted EBITDA ratio towards 1:1 (on a LTM basis) by the end of FY25.
Summary
The strategic and financial initiatives delivered in the year, and subsequent
to the year end, have ensured the Group is well placed to deliver the
effective implementation of our strategic growth plan. The strong underlying
demand in the year, in a challenging environment coupled with a strengthened
platform capable of generating long-term growth position leaves Inspired well
placed to achieve its long-term financial goals.
Paul Connor
Chief Financial Officer
28 March 2025
Group statement of comprehensive income
For the year ended 31 December 2024
2024 2023
Note £000 £000
Revenue 93,791 98,757
Cost of sales (24,085) (31,460)
Gross profit 69,706 67,297
Administrative expenses (52,169) (69,000)
Analysed as:
Adjusted EBITDA 22,992 25,212
Exceptional costs (2,571) (3,620)
Change in fair value of contingent consideration 4,870 (14,621)
Depreciation, impairment and loss on disposal 6/7 (1,378) (1,920)
Amortisation of acquired intangible assets 8 (1,475) (2,272)
Amortisation and impairment of internally generated intangible assets 8 (4,008) (3,295)
Share-based payment cost (893) (1,187)
Operating profit/(loss) 17,537 (1,703)
Finance expenditure 3 (5,768) (4,483)
Other financial items - 17
Profit/(loss) before income tax 11,769 (6,169)
Income tax charge 4 (2,140) (993)
Profit/(loss) for the year 9,629 (7,162)
Attributable to:
Equity owners of the company 9,629 (7,162)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (148) (32)
Total other comprehensive expense for the year (148) (32)
Total comprehensive income/(expense) for the year 9,481 (7,194)
Attributable to:
Equity owners of the company 9,481 (7,194)
Basic earnings/(loss) per share attributable to the equity holders of the 5 9.25
company (pence)
(7.20)
Diluted earnings/(loss) per share attributable to the equity holders of the 5 8.72
company (pence)
(7.20)
Group statement of financial position
At 31 December 2024
2024 2023
Note £000 £000
ASSETS
Non-current assets
Investments 2,030 1,930
Goodwill 8 76,814 76,913
Other intangible assets 8 18,111 17,792
Property, plant and equipment 6 2,859 2,804
Right of use assets 7 2,330 2,291
Trade and other receivables 9 10,475 4,082
Non-current assets 112,619 105,812
Current assets
Trade and other receivables 9 41,165 41,837
Deferred contingent consideration 101 615
Inventories 489 633
Cash and cash equivalents 5,186 8,782
Current assets 46,941 51,867
Total assets 159,560 157,679
LIABILITIES
Current liabilities
Trade and other payables 10 23,133 19,946
Lease liabilities 583 604
Contingent consideration - 13,200
Current tax liability 3,694 3,488
Current liabilities 27,410 37,238
Non-current liabilities
Bank borrowings 64,369 57,541
Lease liabilities 1,825 1,649
Contingent consideration - 5,458
Deferred tax liability 1,129 910
Non-current liabilities 67,323 65,558
Total liabilities 94,733 102,796
Net assets 64,827 54,883
EQUITY
Share capital 1,319 1,260
Share premium account 60,930 60,930
Merger relief reserve 26,111 23,563
Share-based payment reserve 10,191 9,298
Retained earnings (21,774) (28,363)
Investment in own shares (25) (28)
Translation reserve (542) (394)
Reverse acquisition reserve (11,383) (11,383)
Total equity 64,827 54,883
Group statement of changes in equity
For the year ended 31 December 2024
Share Share premium Merger Share-based payment Retained Investment in own Translation Reserve acquisition Total shareholders'
relief
capital account reserve reserve earnings shares reserve reserve equity
£000 £000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2023 1,220 60,930 20,995 8,111 (18,447) (36) (362) (11,383) 61,028
Loss for the year - - - - (7,162) - - - (7,162)
Other comprehensive expense for the year - - - - - - (32) - (32)
Total comprehensive expense for the year - - - - (7,162) - (32) - (7,194)
Share-based payment cost - - - 1,187 - - - - 1,187
Shares issued (5 May 2023) 3 - - - - - - - 3
Shares issued (25 May 2023) 32 - 2,568 - - - - - 2,600
Shares issued (21 June 2023) 1 - - - - - - - 1
Shares issued (5 October 2023) 3 - - - - - - - 3
Shares issued (17 November 2023) 1 - - - - - - - 1
Shares issued (21 December 2023) - - - - - - - - -
Shares transferred - - - - - 8 - - 8
Dividends paid - - - - (2,754) - - - (2,754)
Total transactions with owners 40 - 2,568 1,187 (9,916) 8 (32) - (6,145)
Balance at 31 December 2023 1,260 60,930 23,563 9,298 (28,363) (28) (394) (11,383) 54,883
Profit for the year - - - - 9,629 - - - 9,629
Other comprehensive expense for the year - - - - - - (148) - (148)
Total comprehensive income for the year - - - - 9,629 - (148) - 9,481
Share-based payment cost - - - 893 - - - - 893
Shares issued (22 January 2024) 1 - - - - - - - 1
Shares issued (28 March 2024) 52 - 2,548 - - - - - 2,600
Shares issued (22 May 2024) 3 - - - - - - - 3
Shares issued (24 June 2024) - - - - - - - - -
Shares issued (19 November 2024) - - - - - - - - -
Shares issued (20 December 2024) 2 - - - - - - - 2
Shares issued (22 December 2024) 1 - - - - - - - 1
Shares transferred - - - - - 3 - - 3
Dividends paid - - - - (3,040) - - - (3,040)
Total transactions with owners 59 - 2,548 893 6,589 3 (148) - 9,944
Balance at 31 December 2024 1,319 60,930 26,111 10,191 (21,774) (25) (542) (11,383) 64,827
Merger relief reserve
The merger relief reserve represents the premium arising on shares issued as
part or full consideration for acquisitions, where advantage has been taken of
the provisions of section 612 of the Companies Act 2006.
Reverse acquisition reserve
The reverse acquisition reserve relates to the reverse acquisition between
Inspired Energy Solutions Limited and Inspired PLC on 28 November 2011 and
arises on consolidation.
Translation reserve
The translation reserve comprises translation differences arising from the
translation of the financial statements of the Group's foreign entities into
GBP (£).
Share-based payment reserve
The share-based payment reserve is a reserve to recognise those amounts in
equity in respect of share-based payments.
Investment in own shares equates to 1,974,750 (2023: 2,204,750) shares.
Group statement of cash flows
For the year ended 31 December 2024
2024 2023
£000 £000
Cash flows from operating activities
Profit/(loss) before income tax 11,769 (6,169)
Adjustments
Depreciation and impairment 1,378 1,920
Amortisation and impairment 5,483 5,567
Share-based payment cost 893 1,187
Finance expenditure 5,823 4,483
Exchange rate variances (85) 222
Change in fair value of contingent consideration (4,870) 14,621
Cash flows before changes in working capital 20,391 21,831
Movement in working capital
Decrease/(increase) in inventories 144 (422)
Increase in trade and other receivables (5,349) (8,328)
Increase in trade and other payables 2,988 2,867
Cash generated from operations 18,174 15,948
Income taxes paid (1,705) (774)
Net cash flows from operating activities 16,469 15,174
Cash flows from investing activities
Contingent consideration paid (10,845) (12,102)
Acquisition of subsidiaries and investments, net of cash acquired (100) (193)
Repayment of working capital facility to discontinued operation - 375
Payments to acquire property, plant and equipment (848) (930)
Payments to acquire intangible assets (5,809) (5,644)
Net cash outflows from investing activities (17,602) (18,494)
Cash flows from financing activities
New bank loans 6,575 7,850
Proceeds from issue of new shares 10 16
Interest paid on financing activities (5,495) (4,254)
Repayment of lease liabilities (498) (1,013)
Dividends paid (3,040) (2,754)
Net cash outflows from financing activities (2,448) (155)
Net decrease in cash and cash equivalents (3,581) (3,475)
Cash and cash equivalents brought forward 8,782 12,270
Exchange differences on cash and cash equivalents (15) (13)
Cash and cash equivalents carried forward 5,186 8,782
Notes to Final Results
Statement of compliance
These Condensed Consolidated Financial Statements do not constitute statutory
financial statements within the meaning of Section 434 of the Companies Act
2006 for the financial year ended 31 December 2024 but has been extracted from
those financial statements. The annual financial statements for the year ended
31 December 2024 have been prepared in accordance with UK adopted
International Accounting Standards. These Condensed Consolidated Financial
Statements do not include all the disclosures required in financial statements
prepared in accordance with UK adopted International Accounting Standards and
accordingly do not themselves comply with UK adopted International Accounting
Standards.
The financial information for the period ended 31 December 2023 is derived
from the statutory accounts for that year which have been delivered to the
Registrar of Companies. The statutory accounts for the year ended 31 December
2024 will be delivered to the Registrar of Companies following the Company's
annual general meeting. The auditors have reported on the financial statements
for the years ended 31 December 2023 and 2024; their reports were unqualified,
did not include any matters to which the auditor drew attention by way of
emphasis and did not contain a statement under s498(2) or s498(3) of the
Companies Act 2006.
The Board of directors approved the Condensed Consolidated Financial
Statements on 28 March 2025.
The Consolidated Financial Statements of the Group as at and for the year
ended 31 December 2024 (2024 Annual Report) are available upon request from
the Company Secretary, Inspired PLC, Calder House, St Georges Park, Kirkham,
Lancashire, PR4 2DZ.
The principal accounting policies applied in the preparation of the Group
financial statements are set out below.
1. Basis of preparation
The Group financial statements have been prepared in accordance with the
Companies Act 2006 and UK adopted International accounting standards. They
have been prepared on an accrual basis and under the historical cost
convention except for certain financial instruments measured at fair value.
The Group has taken advantage of the audit exemption for 18 of its
subsidiaries, Independent Utilities Limited (company number 05658810), LSI
Independent Utility Brokers Limited (04072919), Energy Team (UK) Limited
(06285279), Energy Team (Midlands) Ltd (02913371), Ensco 2025 Limited
(formerly Waterwatch UK Limited) (08854844), Inspired Energy EBT Limited
(10807501), Energy Broker Solutions Limited (07355726), Flexible Energy
Management Limited (10264309), Inspired 4U Limited (08895906), Squareone
Enterprises Limited (05261796), Energy Cost Management Limited (03377082), STC
Energy Management Limited (03094427), Professional Cost Management Group
Limited (06511368), Energy and Carbon Management Limited (05498141), Inprova
Energy Limited (04729586), General Energy Management Limited (07236859),
I-Prophets Compliance Limited (04194486) and Digital Energy Limited (07369818)
by virtue of s479A of the Companies Act 2006. The Group has provided parent
guarantees to these 18 subsidiaries which have taken advantage of the
exemption from audit.
Going concern
For the purposes of assessing the appropriateness of preparing the Group's
accounts on a going concern basis, the Directors have considered the current
cash position, available banking facility and the Group's base case financial
forecast through to 31 December 2026, including the ability to adhere to
banking covenants.
At 31 December 2024, the Group's net debt was £59.2 million, increasing from
£48.7 million at 31 December 2023. In addition to cash and cash equivalents
of £5.3 million on hand as at 31 December 2024 (2023: £8.8 million). In May
2024, the Group agreed an increase in the Revolving Credit Facility to £65.0m
until 30 April 2025 to provide additional liquidity in the period in which the
Group pays the final outstanding contingent consideration payments. The
Group's £65.0m Revolving Credit Facility was fully drawn at 31 December 2024.
The facility is subject to two covenants, which are tested quarterly: adjusted
leverage to Adjusted EBITDA (Adjusted Leverage Covenant) and Adjusted EBITDA
to net finance charges (Interest Cover). Under the refinanced facility, the
Group reset the Adjusted Leverage Covenant, with an increase in headroom to
2.75:1.00 through to June 2024, tapering to 2.50:1.00 from June 2024 to June
2025, and then tapering to 2.00:1.00 across the remainder of the facility.
Interest Cover is not to be less that 4.00:1.00 across the term of the
facility.
Subsequently, the Group agreed with its banking partners in November 2024 a
resetting of the adjusted leverage and interest cover covenant for quarter
ending 31 December 2024 (only) to 3.00x and 3.50x respectively, increasing the
headroom available to the Group from a covenant perspective. From 31 March
2025 covenant levels revert to those mentioned above.
In January 2025, the Group raised £21.66m in aggregate (before fees and
expenses) through a placing of 54,150,535 Placing Shares at the Issue Price of
40.0p per Placing Share. In addition, the Company issued Convertible Loan
Notes with an aggregate principal amount of £5 million to GHAM and Regent
Gas, which can be converted into new Ordinary Shares in part or full at any
time during the term of the Convertible Loan Notes at a conversion price of
80.0p per Ordinary Share. The redemption date for the Convertible Loan Notes
is expected to be the second anniversary of the date of the Convertible Loan
Note Instrument, with a total term of 24 months.
The Group intends to utilise the proceeds of the Placing and the Convertible
Loan Notes to strengthen the Group's balance sheet, helping Inspired pursue
and achieve a consolidated net debt/adjusted EBITDA ratio towards 1:1 (on a
LTM basis) by the end of FY25.
The Directors believe that subsequent to the fundraising, the Group has a
strong balance sheet position with its existing banking facilities running
through to October 2026.
The Directors believe that the Group is well placed to manage its business
risks and, after making enquiries including a review of forecasts and
scenarios, taking account of reasonably possible changes in trading
performances in the next twelve months and considering the available
liquidity, including the banking facility, have a reasonable expectation that
the Group has adequate resources to continue in operational existence for the
next twelve months following the date of approval of these financial
statements. Therefore, the Directors continue to adopt the going concern basis
of accounting in preparing the financial statements.
2. Segmental information
Revenue and segmental reporting
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Group's Executive Directors. Operating segments for the year
to 31 December 2024 were determined on the basis of the reporting presented at
regular Board meetings of the Group. The segments comprise:
Assurance Services
Key services provided are the review, analysis and negotiation of gas and
electricity contracts on behalf of clients in the UK and ROI. To access this
market, we have a professional bid response team, direct field sales team, and
partnership channel.
Optimisation Services
This division focuses on the optimisation of a client's energy consumption.
Services provided include forensic audits, energy efficiency projects and
water solutions.
Software Services
This division comprises the provision of energy management software to third
parties.
ESG Services
Within this division, the Group manages the data collection and validation of
consumption data to provide the resources for the creation of mandatory ESG
disclosures, such as Streamlined Energy and Carbon Reporting (SECR) and
Taskforce on Climate-related Financial Disclosure (TCFD) reporting.
PLC costs
This comprises the costs of running the PLC, incorporating the cost of the
Board, listing costs and other professional service costs, such as audit, tax,
legal and Group insurance.
Any charges between segments are made in line with the Group's transfer
pricing policy. These amounts have been removed, via consolidation, for the
purposes of the information shown below.
2024 2023
Assurance Optimisation Software ESG PLC Total Assurance Optimisation Software ESG PLC Total
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Revenue 36,604 47,252 3,530 6,405 - 93,791 36,313 53,989 2,979 5,476 - 98,757
Cost of sales (3,412) (19,557) (155) (961) - (24,085) (3,456) (27,005) (85) (914) - (31,460)
Gross profit 33,192 27,695 3,375 5,444 - 69,706 32,857 26,984 2,894 4,562 - 67,297
Administrative expenses (19,537) (14,793) (1,179) (4,128) (5,671) (45,308) (20,255) (12,509) (1,149) (3,080) (24,520) (61,513)
EBITDA 13,655 12,902 2,196 1,316 (5,671) 24,398 12,602 14,475 1,745 1,482 (24,520) 5,784
Analysed as:
Adjusted EBITDA 14,827 13,030 2,196 1,382 (8,443) 22,992 14,956 15,169 1,757 1,493 (8,163) 25,212
Share-based payment cost - - - - (893) (893) - - - - (1,187) (1,187)
Exceptional costs (1,172) (128) - (66) (1,205) (2,571) (2,354) (694) (12) (11) (549) (3,620)
Change in fair value of contingent consideration - - - - 4,870 4,870 - - - - (14,621) (14,621)
13,665 12,902 2,196 1,316 (5,671) 24,398 12,602 14,475 1,745 1,482 (24,520) 5,784
Depreciation and impairment and loss on disposal (1,378) (1,920)
Amortisation and impairment (5,483) (5,567)
Finance expenditure (5,768) (4,483)
Other financial items - 17
Profit/(loss) before income tax 11,769 (6,169)
Segmental assets and liabilities are not reviewed separately by operating
segment.
3. Finance expenditure
2024 2023
£000 £000
Interest payable on bank borrowings 5,294 4,214
Interest payable on lease liabilities 60 90
Foreign exchange variance 12 (239)
Other interest 40 80
Loan facility fees 39 80
Amortisation of debt issue costs 323 258
5,768 4,483
4. Income tax charge
The income tax charge is based on the profit/(loss) for the year and
comprises:
2024 2023
£000 £000
Current tax
Current tax expense 1,922 2,056
Adjustments in respect of prior years - (777)
1,922 1,279
Deferred tax
Origination and reversal of temporary differences 218 (372)
Adjustment in respect of prior years - 86
218 (286)
Total income tax charge 2,140 993
Reconciliation of tax charge to accounting profit/(loss):
Profit/(loss) on ordinary activities before taxation 11,769 (6,169)
Tax at UK income tax rate of 25% (2023: 23.5%) 2,942 (1,450)
Disallowable expenses (436) 4,191
Exchange rate difference (101) (204)
Share options 192 (191)
Tax R&D credits (931) (276)
Effects of current year events on prior year balances - (690)
Movement in deferred tax asset not recognised - (229)
Movement in deferred tax in respect of business combinations - (568)
Excess of taxation allowances over depreciation on all non-current assets - 263
Non-eligible intangible assets 474 147
Total income tax charge 2,140 993
The UK income tax rate of 23.5% in the prior year is a blended rate based on 3
months at 19.0% and 9 months at 25.0%, based on the increase in the main rate
of Corporation Tax which came into effect on 1 April 2023.
5. Earnings per share
The basic earnings per share is based on the net profit for the year
attributable to ordinary equity holders divided by the weighted average number
of ordinary shares outstanding during the year.
2024 2023
£000 £000
Profit/(loss) attributable to equity holders of the Group 9,629 (7,162)
Fees associated with acquisition - 8
Restructuring costs 2,571 3,612
Exceptional finance expenditure - 482
Changes in fair value of contingent consideration (4,870) 14,621
Amortisation of acquired intangible assets 1,475 2,272
Foreign exchange variance 12 (257)
Deferred tax in respect of amortisation of intangible assets (369) (568)
Share-based payment cost 893 1,187
Adjusted profit attributable to owners of the Group 9,341 14,195
Weighted average number of ordinary shares in issue (000) 104,048 99,422
Dilutive effect of share options (000) 6,317 6,698
Diluted weighted average number of ordinary shares in issue (000) 110,365 106,120
Basic earnings/(loss) per share (pence) 9.25 (7.20)
Diluted earnings/(loss) per share (pence) 8.72 (7.20)
Adjusted basic earnings per share (pence) 8.98 14.28
Adjusted diluted earnings per share (pence) 8.46 13.38
The weighted average number of shares in issue for the adjusted diluted
earnings per share includes the dilutive effect of the share options in issue
to senior staff of the Group.
Adjusted earnings per share represents the earnings per share, as adjusted to
remove the effect of fees associated with acquisitions, restructuring costs,
the amortisation of intangible assets (excluding internally generated
amortisation related to computer software and customer databases), deferred
tax in respect of amortisation of intangible assets, exceptional items and
share-based payment costs which have been expensed to the Group statement of
comprehensive income in the year, the unwinding of contingent consideration
and foreign exchange variances. The adjustments to earnings per share have
been disclosed to give a clear understanding of the Group's underlying trading
performance.
Adjusted profit before tax on continuing operations is calculated as follows:
2024 2023
£000 £000
Profit/(loss) before income tax 11,769 (6,169)
Share-based payment cost 893 1,187
Amortisation of acquired intangible assets 1,475 2,272
Foreign exchange variance 12 (257)
Change in fair value of contingent consideration (4,870) 14,621
Finance expenditure - 482
Exceptional costs 2,571 3,620
Adjusted profit before tax on continuing operations 11,850 15,756
Acquisition activity, non-recurring items and material items can significantly
distort underlying financial performance from IFRS measures and therefore the
Board deems it appropriate to report adjusted metrics as well as IFRS measures
for the benefit of primary users of the Group financial statements.
6. Property, plant and equipment
Fixtures and Motor Computer Leasehold Office
fittings vehicles equipment improvements equipment Total
£000 £000 £000 £000 £000 £000
Cost
At 1 January 2023 335 115 4,134 1,192 418 6,194
Foreign exchange variances (2) (2) (3) - (2) (9)
Additions 153 - 697 79 1 930
Disposals (58) (41) - (977) (323) (1,399)
At 31 December 2023 428 72 4,828 294 94 5,716
Foreign exchange variances (7) (2) (3) - (5) (17)
Additions 99 - 510 239 - 848
Disposals (65) (70) (17) - - (152)
At 31 December 2024 455 - 5,318 533 89 6,395
Depreciation
At 1 January 2023 224 95 1,763 605 291 2,978
Charge for the year 77 6 660 119 72 934
Foreign exchange variances (1) (2) (2) - - (5)
Disposals (26) (29) (12) (611) (317) (995)
At 31 December 2023 274 70 2,409 113 46 2,912
Charge for the year 64 1 648 50 8 771
Foreign exchange variances (6) (2) (4) - - (12)
Disposals (52) (69) (14) - - (135)
At 31 December 2024 280 - 3,039 163 54 3,536
Net book value
At 31 December 2024 175 - 2,279 370 35 2,859
At 31 December 2023 154 2 2,419 181 48 2,804
7. Right of use assets
Fixtures Motor
and fittings vehicles Property Intangibles Total
£000 £000 £000 £000 £000
Cost
At 1 January 2023 255 421 3,334 301 4,311
Foreign exchange variances - - 18 - 18
Additions 116 47 1,683 - 1,846
Disposals - (283) (2,329) - (2,612)
At 31 December 2023 371 185 2,706 301 3,563
Foreign exchange variances - 3 (17) - (14)
Additions 199 187 210 57 653
Disposals (255) (120) (159) - (534)
At 31 December 2024 315 255 2,740 358 3,668
Depreciation
At 1 January 2023 158 310 2,252 50 2,770
Charge for the year 103 87 696 100 986
Foreign exchange variances - - 3 - 3
Disposals - (271) (2,329) - (2,600)
At 31 December 20223 261 126 622 150 1,159
Charge for the year 74 66 348 119 607
Foreign exchange variances - - (6) - (6)
Disposals (255) (121) (159) - (535)
At 31 December 2024 80 71 805 269 1,225
Impairment
At 1 January 2024 - - 113 - 113
Charge for the year - - - - -
At 31 December 2024 - - 113 - 113
Net book value
At 31 December 2024 235 184 1,822 89 2,330
At 31 December 2023 110 59 1,971 151 2,291
8. Intangible assets and goodwill
Computer software - internally generated Computer software - external Trade name Customer contracts Customer relationships Total other intangibles Goodwill Total
£000 £000 £000 £000 £000 £000 £000 £000
Cost
At 1 January 2023 21,146 4,822 160 21,575 7,511 55,214 76,960 132,174
Additions 3,242 2,402 - - - 5,644 - 5,644
Foreign exchange variances - - - (255) - (255) (47) (302)
At 31 December 2023 24,388 7,224 160 21,320 7,511 60,603 76,913 137,516
Additions 4,340 1,421 48 - - 5,809 - 5,809
Foreign exchange variances - (8) - - - (8) (99) (107)
At 31 December 2024 28,728 8,637 208 21,320 7,511 66,404 76,814 143,218
Amortisation
At 1 January 2023 12,668 1,651 45 18,327 4,807 37,498 - 37,498
Charge for the year 2,562 814 8 1,429 754 5,567 - 5,567
Foreign exchange variances - - - (254) - (254) - (254)
At 31 December 2023 15,230 2,465 53 19,502 5,561 42,811 - 42,811
Charge for the year 2,769 1,237 8 716 753 5,483 - 5,483
Foreign exchange variances - (1) - - - (1) - (1)
At 31 December 2024 17,999 3,701 61 20,218 6,314 48,293 - 48,293
Net book value
At 31 December 2024 10,729 4,936 147 1,102 1,197 18,111 76,814 94,925
At 31 December 2023 9,158 4,759 107 1,818 1,950 17,792 76,913 94,705
9. Trade and other receivables
Group
2024 2023
£000 £000
Trade receivables 12,850 17,550
Other receivables 708 861
Deferred contingent consideration 101 615
Prepayments 7,711 7,596
Accrued income 30,371 19,912
51,741 46,534
Deferred contingent consideration relates to the collection and run off of the
SME division's accrued income balance at disposal.The Group does not hold any
collateral as security (2023: none). Group debtor days were 42 days (31
December 2023: 44 days).
10. Trade and other payables
Group
2024 2023
£000 £000
Current
Trade payables 3,937 6,261
Social security and other taxes 5,445 6,393
Accruals 5,339 4,595
Deferred income 7,862 2,095
Other payables 550 602
23,133 19,946
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR JMMRTMTAJBMARecent news on Inspired
See all newsREG - Inspired PLC - David Leahy - Form 8.3 - Inspired plc
AnnouncementREG - FIL Limited Inspired PLC - Form 8.3 - INSPIRED PLC
AnnouncementREG - Panmure Liberum Ltd. Inspired PLC - Form 8.5 (EPT/RI)
AnnouncementREG-Form 8.5 (EPT/RI) - Inspired Plc
AnnouncementREG - William Currie Inv Inspired PLC - Form 8.3 - Inspired PLC
Announcement