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/
Enquiries
Good Energy Group PLC
|
|
Nigel Pocklington, Chief Executive
Officer
Ian McKee, Head of
Communications
|
Email: press@goodenergy.co.uk
|
SEC
Newgate UK
|
|
Elisabeth Cowell / Molly
Gretton
|
Tel: +44 (0)7900 248213
Email: 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
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 COMPANY
|
|
|
2,876
|
8,635
|
|
|
|
|
|
Earnings per share for the
year
|
4
|
Basic
|
17.1p
|
55.7p
|
|
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 directly in
equity
|
4
|
125
|
437
|
11,234
|
(11,693)
|
107
|
917
|
1,024
|
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 directly in
equity
|
1
|
60
|
7
|
75
|
-
|
143
|
-
|
143
|
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
|