Juliet Davenport, Founder & CEO of Good Energy discusses the financial & operational highlights from their interim results

Juliet Davenport, Founder & CEO of Good Energy discusses the financial & operational highlights from their interim results.

Financial highlights - continuing operations

·    Underlying performance of the core business in line with management expectations, adjusting for the impact of COVID-19  

·    Strong operating cashflow of £7.0m leading to a gross cash balance of £18.2m (2019: £13.7m), funding investment across the business, and providing increased capital flexibility

·    Net debt decreased to £36.5m, with £33.8m of this secured against £63.2m generation portfolio that remain cash generative

·    Revenue increased by 6.2% to £67.5m, driven by growth in Business supply and FIT customers, more than offsetting a decline in Domestic supply customers

·    Gross profit of £14.8m decreased 13.3% with a gross profit margin of 22.0% (H1 2019: 26.9%) in line with the strategic shift toward longer term, lower gross margin Business supply and selling back excess contracted power and higher network reconciliation costs

·    Revaluation undertaken of the entire 47.5MW generation portfolio delivered a net £19.0m uplift to asset values, at 1 January 2020, and an increase in reserves resulting in the headline gearing declining from 63.6% to 51.9%.

·    Within underlying loss before tax of £0.5m (H1 2019 £2.5m profit), are £3.1m of increased non-cash costs, driven by an incremental £1.9m expected credit loss (ECL) and £1.2m resulting from the positive revaluation of the generation portfolio and the write down in value of the small Creathorne solar site 

·    Non underlying costs of £0.6m associated with restructuring costs, delivered a loss before tax from continuing operations of £1.1m

·    Basic loss per share decreased to 2.8p, with reported loss per share decreasing to 6.6p (H1 2019: profit per share 15.3p).

·    The Board recognises the importance of the dividend to our shareholders and therefore intends to resume dividend payments in 2021, if broader macro-economic conditions permit. In order to maintain the appropriate level of near-term flexibility, the Board has decided not to declare or pay an interim dividend.

Operational highlights

·    Notwithstanding the challenges of the coronavirus pandemic, Good Energy delivered a resilient performance in the first half. The Group continued to invest across the business in the development of energy services propositions and a range of innovation projects to drive future profit growth and supporting the journey to a zero-carbon Britain.

·    Good underlying business growth mitigating COVID impact, with overall customer numbers increased by 4.3% to 272.6k. Total Business customers increased 8.0%, with Business FIT customers increasing 7.9%. Total Domestic customers increased marginally by 0.9%, with Domestic FIT customers growing strongly by 16.8%.

·    Continued focus on delivering profitable returns alongside continued investment in people, processes, and technology to enable customers to take control of their energy usage in the future.

o  Kraken implementation and rollout progressing on track with over 85% of customers migrated to date. The remainder of the rollout will be completed in late Q3 2020 and early Q4 2020. The system implementation and associated operating model transformation has delivered cost savings in H1, significant improvements in customer experience and is on track to payback within 18 months as forecast.

o  Zap - Map recently launched Zap - Pay, a ground-breaking payment solution across EV charging point networks. Good Energy converted its initial investment into a majority 50.1% equity stake in June 2020. 

o  Given future requirement for smaller, flexible working spaces, Good will no longer be developing a new head office in Chippenham, which was due to complete in 2022. Future Group talent strategy will be aligned to a more remote, flexible business model.  

o  SMART meter rollout impacted by COVID restrictions. Demand and installation numbers improving as lockdown restrictions ease and in line with expectations.