REG - Inspired PLC - Full year trading update and notice of results

InspiredAnnouncement

31/01/2024 07:00

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RNS Number : 4393B  Inspired PLC  31 January 2024

31 January 2024

 

Inspired PLC

("Inspired" or the "Group")

 

Full year trading update and notice of results

Strong Group trading performance and confident outlook

 

Inspired (AIM: INSE), a leading technology enabled service provider supporting
businesses in their drive to reduce energy consumption, deliver net-zero,
control energy costs and manage their response to climate change, announces a
trading update for the financial year ended 31 December 2023 ("FY23").

 

The Group delivered a strong trading performance, with adjusted EBITDA up 19%,
in line with market expectations(1). The Group achieved strong trading
particularly in the second half with all trading divisions contributing
revenue growth and each delivering solid strategic progress.

 

Financial highlights

 ·             Group revenue is expected to be c.11% ahead of FY22, at c.£98.7m. The Group
               traded strongly in FY23 with a shift in product mix within the Optimisation
               Division driving a higher margin contribution from the revenue generated in
               that division.
 ·             Group Adjusted EBITDA* grew 19% to £25.0m (2022: £21.0m) in line with market
               expectations(1). Adjusted EBITDA Margin increased to c.25% (2022: c.24%) as a
               result of the improved margin within the Optimisation Division.
 ·             Group Adjusted profit before tax**("PBT") is expected to be in line with
               market expectations(1). The growth in Adjusted EBITDA was partially offset by
               increased finance costs, reflecting higher interest rates on borrowings.
 ·             As anticipated, the Group's Optimisation division saw very high levels of
               project activity in H2 2023, with the associated investment in working capital
               reducing Cash Conversion*** in FY23 to c.70%. In January the working capital
               investment unwound, and it is expected that Cash Conversion for the 12 months
               to 31 January 2024 will be in excess of 90%.
 ·             Net debt at 31 December 2023 was c.£48.7m (H1 2023: £49.1m). With strong
               cash generation in January 2024, net debt at 31 January 2024 is expected to be
               c.£45.0m.

 

Divisional highlights

 ·             Assurance Services continued to see momentum in new business generation, with
               improved churn rates, higher retention rates and margins broadly in line with
               H1 2023.
 ·             Optimisation Services experienced strong demand in H2 2023, delivering c.13%
               revenue growth in FY23. This was driven by increasing levels of repeatable
               demand from existing clients of the division alongside growing levels of cross
               selling from the Assurance Division.
 ·             ESG Services achieved c.100% revenue growth in FY23 and made an Adjusted
               EBITDA contribution to the Group.
 ·             Software Services revenue grew by c.15% in the year whilst maintaining
               Adjusted EBITDA margins in excess of 70%.

 

Current trading and outlook

The secular demand from companies to reduce energy consumption, drive
efficiencies and report against progress remains unchanged and underpins
demand for the Group's services. This has been reflected in the continued
progress of the ESG Division and the Optimisation Division, the latter of
which experienced a strong Q4 2023.

 

The Group started Q1 2024 strongly with substantial cash generation as the
working capital investment in Q4 2023 unwound and is confident in the outlook
for FY24.

 

This momentum is expected to continue, giving the Board confidence in its
previously stated aspiration to maintain double-digit organic growth and, by
FY27, double Adjusted EBITDA organically from that achieved in FY22. The
associated cash generation will also lead to a deleveraging of the Group in
relative and absolute terms.

 

Commenting on the period, Mark Dickinson, CEO of Inspired, said: "The Group
delivered a solid operational and financial performance during the year, with
Adjusted EBITDA and PBT in line with market expectations, with a continued
focus on cash generation.

 

"Managing energy costs and ESG have now become firmly embedded as
operationally and commercially critical for most businesses. This is creating
sustained and increasing demand for Inspired's differentiated products and
services. We are better placed than ever as a full-service provider and are
confident of future success and in our outlook for FY24 on the back of
momentum in FY23."

 

Notice of Results

Inspired expects to announce its audited full year results to 31 December 2023
on 26 March 2024.

 

 * Adjusted EBITDA is earnings before interest, taxation, depreciation and
amortisation, excluding exceptional non-recurring items and share-based
payments.

**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).

***Cash Conversion is cash generated from operations, as adjusted to exclude
exceptional non-recurring items, as a percentage of Adjusted EBITDA.

 

1 The Company considers that consensus market expectations for Adjusted EBITDA
is £25.0m and Adjusted PBT £16.2m for FY23.

 

Enquiries 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

 Rachel Goldstein

 Liberum (Joint Broker)                              +44 (0) 20 7418 8900

 Edward Mansfield

 Satbir Kler

 Alma Strategic Communications                       +44 (0) 20 3405 0205

 Justine James                                       +44 (0) 7525 324431

 Hannah Campbell                                     inspired@almastrategic.com

 Will Ellis Hancock

Notes to editors

Inspired PLC is a leading B2B technology enabled service provider delivering
solutions that enable corporate businesses to transition to net-zero carbon
and manage their response to climate change in the UK and Ireland.

 

Founded in 2000, Inspired operates four divisions: Assurance Services,
Optimisation Services, ESG Services and Software Services, providing expert
energy advisory and sustainability services to over 3,500 businesses who
typically spend more than £100,000 on energy and water per year. The Group's
four divisions work together to help corporate businesses manage all aspects
of their energy and sustainability programme through the lens of what the
Group refers to as the 4Cs of Cost, Consumption, Compliance and Carbon.

 

Inspired has been recognised with the London Stock Exchange's Green Economy
market since 2020 for its environmental and strategic advice, service, and
support to customers and is also ranked as the UK's leading advisor by the
independent energy market intelligence consultancy, Cornwall Insight.

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