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GOOD has acquired the entire share capital of JPS Renewable Energy Ltd and its wholly owned subsidiary, Trust Solar Wholesale Ltd, (together ‘JPS Group’) for a total consideration of £13.75m, with £7m to be paid upfront with a mixture of cash (£3.7m) and consideration shares (£3.3m/1.322m shares, to the sellers of JPS) to maintain balance sheet flexibility for future opportunities. The £6.75m deferred consideration is dependent on PBT earn-out milestones and service quality and health & safety targets split across JPS’ financial years, ending April 2024 and 2025. A vendor placing of £2.1m has been executed for the sellers, at a price of £2.50/share, representing a 9.4% discount to the closing price of £2.76/share on 9th Feb. The remaining 480,000 shares are subject to a twelve month lock up. JPS Renewables is a leading solar and storage installer in the South-East, with a focus on high quality service for domestic and commercial installations. Trust Solar acts as a separate distribution business, providing better control for JPS’ supply chain and high-quality product. The combination with GOOD can provide a differential offering with greater customer reach than local installers and can offer innovative packages with supply, export and smart tariffs. JPS has a robust financial performance history and is expected to deliver c.£19.6m revenue for its April 24 financial year, and c.£1.3m of PBT. The transaction is expected to be earnings accretive in FY24. The acquisition strengthens GOOD’s service offering and accelerates the company’s energy services growth strategy in targeting higher margin, growth markets with lower working capital. GOOD is targeting an equal weighting of energy services and energy supply earnings by 2025.
Good Energy Group PLC
Post the 1H23 results in September we opined that we viewed Good Energy’s FY23 guidance as conservative. This view has played out with this morning’s trading statement pointing to a full-year PBT of ‘at least £4m’. We have revisited our estimates and raise EBIT by 180.0% in FY23E, 19.9% in FY24E, and by 8.6% in FY25E. In FY23E the positive movement in the contribution from energy supply is partially offset by higher forecast losses in Good Energy Works and Zap-Map, as well as a more cautious view on interest earned. Our updated estimates feed through to our valuation, and we raise our target price to 475p. The trading update follows a recent update on Good Energy’s clean energy product suite where the company highlighted its solar export offering, its time-based energy matching for its business customers, its participation in this winter’s domestic Demand Flexibility Service, its latest EV tariff, and the ZapMap spark API offering. We firmly believe that there is a cohort of customers who want more than a single rate tariff, and who will actively engage (or outsource their engagement) with the electricity system. This suite of products is a step in the right direction, and we reiterate our BUY rating.
Good Energy’s 1H23 operating profit of £14.1m was a material jump vs. a £0.5m loss in 1H22, leading to 1H23 EPS of 72.0p vs. 7.4p in 1H22. The supply business including FiT administration, posted an operating profit of £16.7m, up from £2.1m in 1H22, driven by cost advantages conferred by the pricing of Good Energy’s portfolio of PPA contracts, and the end user pricing strategy deployed. This is expected to reverse in 2H due to falling commodity costs, and tariff reductions. Energy Services posted an operating loss of £1.7m, wider than the £0.8m loss in 1H22. Solar PV installs are running ahead of our expectations, with heat pump installs lagging, but both reflecting broader national trends as evidenced by MCS data. Zap Map reported a loss of £1.1m for Good Energy’s stake and is moving towards a Series B funding round in 2024. Good Energy has indicated that it expects to participate, although we expect a lower post money shareholding. Net cash at 1H23 was £38.2m (incl. £8.5m restricted deposits) vs. £27.7m at FY22, and an interim dividend of 1.00p has been declared. FY guidance is unchanged, although we suggest that, given 1H delivery, the guidance appears conservative. We have increased our FY23E dividend to 3.5p (vs. 3.0p), but otherwise leave our estimates unchanged. We continue to see growth opportunities in both energy supply and energy services, as consumers engage with the net zero journey. Products launched, and the suggestion that there are more in the hopper, suggest that Good Energy is positioning well for delivery.
GE has acquired 100% of Wessex EcoEnergy Limited, an established UK (predominately South West England)-based solar installation business, on a debt-free, cash-free basis for an initial consideration of £2.5m. Deferred consideration of up to £1.5m is payable in cash by GE dependent on the achievement of certain milestones (service quality, management transition, installation capacity, earnings run-rate), over the period to 31 December 2024. Initial consideration price less than 6x FY23E EBITDA, with Wessex revenue for the year to 31 October 2023 on track to exceed £4m according to GE. The upcoming 12 months will see a period of investment (c.£0.5m working capital) to double the installation capacity of Wessex with an aim to hit a run-rate of c.360 annual installs, driving earnings accretion from 2025. GE has previously communicated an acquisition strategy (Figure 1), and solar is a key part of this (Figure 2). We expect further acquisitions in solar, and other product areas within energy services. As can be seen from MCS data, solar dominates the small-scale low carbon installs, with 2023 year-to-date solar PV installs (Figure 3) already in excess of 70% of full-year 2022 levels (Figure 4), supportive of widely held views that solar PV is a growth area. Solar can be marketed to GE’s customer base but, subject to attractive tariff offers, it is also a means to acquire customers in the supply business. Our updated estimates (Figure 5) incorporate the acquisition, with other areas broadly unchanged, reflecting today’s AGM trading statement, with GE commenting that “expectations for the full-year remain unchanged”. We are, however, cognisant of the growth challenges in the heat-pump market, the domain of GE Works.
Good Energy has reported FY22 results this morning. EBITDA of £3.0m was below our £3.7m estimate, as was operating profit of £1.2m, which was below our £1.8m estimate. Supply (including central costs) posted an operating profit of £2.6m (vs. £2.8m estimated), while Energy as a Service (Igloo & Zap-Map) posted an operating loss of £(1.4)m (vs. £(1.0m) estimated). Zap-Map is now equity accounted. Net cash of £27.7m bettered our £16.4m expectation, although £4.5m relates to government support scheme monies received in December for application to customer accounts in January. A final dividend of 2.0p/share is proposed, with the full-year dividend of 2.75p/share ahead of our 2.55p/share estimate. Our updated FY23E estimates (Figure 1) see our FY23E operating profit unchanged at £2.2m, but EPS (undiluted) rising by 2.1p (26.4%) to 10.2p. For FY24E operating profit nudges down by 6.5% to £3.6m, but EPS (undiluted) nudges up by 2.5% to 18.7p. The strategy is two-pronged, encompassing the energy service and renewable supply markets. The former offers a growth opportunity, spanning solar, heat and transport, and seeks to leverage what we view as an engaged and receptive client base. Installations of solar, battery storage and heat pumps all feature and we look to Good Energy to build on the Igloo acquisition, with installation ramp-up and new tariff launches, complemented by M&A activity. Component parts of our valuation (Figure 4) move reflecting our updated estimates, and the better-than-expected net cash position. Our target price moves to 435p (vs. 420p). The equity story is remains intact. Buy.
Good Energy (GE) reports FY22 results on 28th March, hosting an investor presentation at 2pm the same day (registration link). Our expectations are set out in Figure 1. FY21 operating profit was boosted by an accounting reclassification, and our FY22E net cash position is £16.4m Given the evolution of GE’s strategy and the opportunities that we believe exist in flexibility, decentralised energy, and decarbonisation of heat via heat pumps, we suggest however that the focus should be on execution of the strategy as opposed to FY22 numbers. GE has an enduring derogation from the price cap, but its level, and the elevated cost of energy/living still matter for Good Energy, despite our view that its customer base is likely to be more affluent than average. We expect Ofgem to announce a statutory consultation on the Price Cap EBIT Methodology, and the Strengthening Financial Resilience decision, possibly this month. We view both as steps on the road to ensuring that an appropriate return can be earned in supply, creating a landscape that is supportive of those who choose to innovate and bring forward products that customers, particularly those with a propensity to engage, want. We view GE as an innovator, but we need to see products launched, and GE’s view of the value that these could generate for the company. Leveraging the Igloo Works acquisition will see a heat pump subscription service offered, and we look to GE for granular detail of what the product entails. With GE’s market cap at c.£30m, over half is covered by the net cash position. Our £291 valuation of a dual fuel customer is below the level we attribute to British Gas’ customers, while FiT administration offers a tapering annuity. Consequently, it is not hard to argue that GE offers significant upside.
Trading to the end of October was in line with expectations. Conditions through the early winter have been generally mild and windy, reducing domestic gas consumption and softening short term market prices. GE’s risk management actions, taken to manage the volatility experienced in the wholesale energy markets throughout 2022, have been successful to date, and if these prevailing market conditions continue for the remainder of the year, GE is confident in delivering in line with expectations for the full year. GE has acquired the entire share capital of Igloo Works Limited, a UK based heat pump installation business, for an initial consideration of £1.75m. We view this as a significant milestone in delivering on GE’s strategy to accelerate its capability in decentralised energy services. It puts GE into the growing heat pump installation market, with ED2 business plans (Figures 1-3) suggesting c.2m installs by 2028 across GB. The government ambition of 600k annual installs by 2028 is supportive. We understand that GE is targeting c.500 installs in 2023, scaling up to 12k by 2026. The current install price is c.£15k, the upper quartile of installs over recent months (Figure 4). We understand GE is looking to bring this down to c.£12k. A 40% gross margin/high single-digit EBITDA margin is targeted Scaling the business, and benefit from economies of scale will take time, and we expect earnings dilution in FY23E and FY24E, but significant accretion from FY25E (Figure 6). We consider system design, efficient installation and a quality maintenance offering as three necessities in the ASHP business, and if GE can nail all three, then there is the potential for this to be transformational. Valuation updated to reflect 50% of the buyout mechanics of the incentive plan, but with an increased target price of 420p we reiterate our Buy.
A changed wholesale price environment (Figures 1&2), and the drive for energy independence and security, will undoubtedly change the way that consumers, both business and households, will interact with energy. We are not calling the end of the basic supply product, but we see a growing need for the provision of optimisation and flexibility products, as consumers seek to mitigate the impact of the new norm in energy prices. Funding models will need to be developed to make these mass market, given the upfront capital costs of heat pumps, solar panels, home retrofits, etc., but with a seemingly engaged, early-adopting customer base, we suggest that Good Energy has an opportunity to grow in this area in the near-term, and be ahead of the pack. Last week’s 1H22 results provided a high-level early look at what products are in the hopper (Figures 3-6), but at this stage, no indication has been provided as to the mechanics of monetisation. We are hopeful that Good Energy will be in a position to communicate financial targets before year-end. Following Zap-Map’s series A fundraise, Good Energy has dropped to a minority holding, and Zap-Map will be deconsolidated. Our updated estimates (Figure 7) assume that Zap-Map is fully consolidated up to early August. Our estimates also reflect Friday’s announcement that the rate of corporation tax will remain at 19% in April 2023. Otherwise, there is little change. Our valuation of supply nudges down, as the benefit of the lower tax rate is more than offset by a higher WACC assumption (8.9% vs. 8%). We include Zap-Map at Good Energy’s share of the £26.3m post-money equity valuation, and this supports an increase in our target price to 405p. We remain BUYERS.
Operating loss of £0.5m in 1H22 Good Energy has reported an operating loss of £0.5m at 1H22. Split by business, supply recorded an operating profit of £0.3m, and energy as a service (Zap-Map) posted a loss of £0.8m. EPS were 7.4p, with the interim dividend of 0.75p flat vs. 1H21. At 30th June, there was a net cash position of £16.2m following the completion of the sale of the generation portfolio in January. Zap-Map’s recent fundraise, which values the company at £26.3m on a post money basis sees Good Energy’s stake reduce to 49.9%, and Zap-Map will be deconsolidated from FY figures. YTD financial performance is consistent with our FY estimates. Supply market continues to be challenging, but 1H22 vastly improved on 2H21 Our pre-existing estimates for the supply business point to an operating profit of £2.8m for FY22E. Good Energy’s small operating profit in 1H highlights the challenges in the GB energy supply, although there is clear improvement vs. 2H21. A number of mitigating measures have been taken, including matching generation to supply, and being 90% hedged for winter. The need to raise prices is being monitored, while the Energy Price Guarantee, Energy Bills Support Scheme and the to-be-announced package for business will likely ease pressure on cash collection. Changing the way we interact with energy, developing new products We are firm believers that hitting net zero targets will involve greater customer participation, and a change in the way in which we all interact with energy, as it is highly unlikely that we will return to the price point of yesteryear. Suppliers will need to refine their offerings and innovate, and consequently we are attracted to Good Energy’s energy-as-a-service offering. New products have been launched, or are to be launched, including matching generation to supply, new payments to small scale solar generators for actual export, and continuing to support the development of Zap-Map.
Fundraising values Zap-Map at £26.3m post-money Zap-Map has completed a £9m Series A fundraising, valuing Zap-Map at £26.3m post-money equity value. Good Energy is investing £3.7m alongside £5.3m from new strategic investor Fleetcor UK Acquisition Limited (“Fleetcor”), the leading global fuel card and payment provider. Zap-Map has an existing collaboration with Fleetcor’s Allstar Electric. Good Energy will provide £2.7m in new funds following the repayment of a £1.05m loan, and the £1m convertible loan note issued in April 2021 has converted into shares. Good Energy moves to a minority interest of 49.9% (from 50.1%), Fleetcor will hold 19.9% of Zap-Map. Pre-money equity value c.31p/Good Energy share above our pre-existing valuation The fundraise was based on a pre-money EV of £18.35m, equivalent to a pre-money equity value of £17.3m. Pre the Series A fundraise, Good Energy’s cumulative investment was £2.08m. The pre-money equity value valuation is above our pre-existing £7.1m valuation for 100% of Zap-Map, equivalent to an uplift of c.31p/Good Energy share. We understand that the accounting treatment of the transaction is being finalised, and we will update our estimates in due course. Builds on existing partnership, funds further growth Fleetcor’s strategic investment builds on an existing partnership which sees Fleetcor’s Allstar Business Solutions integrated into Zap-Map’s Zap-Pay product. The funds raised are expected to fuel the expansion of Zap-Map’s development team to deliver its product roadmap and could pave the way for Zap-Map’s international expansion.
Our disappointment at the lack of courage shown by the government’s Energy Security Strategy in certain areas is clear, and without further support measures for consumers, we are heading uncontrollably to unpalatable choices that will be devastating for many. Consequently, the near-term operating environment for suppliers remains challenging. However, the mid to longer-term picture is improving, and we maintain our thesis that well-run, innovative and financially strong suppliers are the future of supply. We place Good Energy in this category. Good Energy’s position as a derogated supplier points to its customer base being more affluent than average, and we consider its customers more engaged with energy than the norm. Increasing solar deployment is therefore a clear opportunity for Good Energy to grow the customer base, and smart export tariffs are a route to expanding the FiT administration business. There are many drivers of electrification, some of which rightly attract debate. That electric vehicle sales are growing, and growing quickly, is indisputable, with Battery Electric Vehicles accounting for c.15% of YTD registrations, a market share double of that a year ago. Charging, and the associated infrastructure is a key issue. As the UK’s no. 1 charging point app, Zap-Map offers solutions. Zap-Map’s market penetration is holding steady in a growing market, and commercial revenue streams are in place. In a growth phase, Zap Map’s series A funding, expected to complete this quarter, could bring valuation visibility, and is a potential catalyst. Updated estimates see EPS cut (Figure 10) through to FY24E given near-term challenges in supply, and Zap-Map’s growth rollout. Target price trimmed to 380p, but we remain attracted to Good Energy’s equity story. BUY.
Moving parts and accounting treatment cloud, but at a group level underlying performance in line The accounting rules relating to discontinued activities cloud ease of comparison of our estimates to Good Energy’s FY21 results reported this morning. However, in order to provide a meaningful comparison to FY20, Good Energy has indicated a loss of £2.8m in FY21 from the combined continuing business and the now disposed generation activities. This is line with our estimate of a £2.7m loss for underlying activities/generation. Within this, ZapMap moved down by £0.8m YOY, compared to a flat assumption in our estimates, suggesting that supply/generation in aggregate bettered our estimates. In supply the principal moving parts were volume recovery (+£2.3m), price/weather/industry structure (-£6.0m) and a lower ECL (+£0.7m). We suggest that this points to supply out-turning below our expectations, and generation above. A final dividend of 1.8p/share is proposed, with the full-year dividend of 2.55p/share marginally ahead of our 2.5p/share estimate. Supply market dynamics and ZapMap growth investment set to impact FY22 We have placed our pre-existing estimates under review, pending the additional granularity we expect in the results presentation scheduled for 9.30am (attendance via investor.relations@goodenergy.co.uk), and amongst many likely moving parts, we highlight two areas of potential downwards pressure, domestic supply and ZapMap. Although Good Energy has a derogation from the tariff cap, customers who have an expiring fixed tariff roll onto the capped default tariff if they do not choose an alternative. With the marked difference between the level of cap and where fixed price deals are currently offered, it is probable that most customers will move to the default tariff, potentially impacting supply profitability by c.£2m in FY22E due to the incremental costs of balancing, etc.. As evidenced by FY21, ZapMap is investing to grow the business, and this suggests that losses could widen in FY22E, possibly by c.£1m when compared to our pre-existing estimates.
Good Energy has announced the completed disposal of its 47.5MW renewable generation portfolio to Bluefield Solar Income Fund (BSIF) for an equity consideration of up to £24.5m. The total potential consideration consists of initial consideration already received of £16.4m less £0.7m distribution since the lockbox date, with deferred consideration of up to £8.1m based on the actual operational, technical, real estate and financial position of the underlying renewable assets. Payment is expected by end February. We await clarification of how the generation business will be accounted in FY21, but for modelling purposes, we have assumed total equity proceeds of £20m, and an effective date at the start of FY22. A summary of our updated forecasts is set out in Figure 1. At an assumed consideration of £20m, generation debt of £39.9m, and decommissioning liabilities of £1.4m, the transaction EV is c.£60m, in line with our previously published £61m valuation. A previously communicated, proceeds from the transaction will be used to accelerate and support further investments across both transport and decentralised energy to deliver Good Energy’s strategic plan, and shift towards energy and mobility services. We have updated our valuation for the disposal and, with minor changes, we nudge our target price down to 395p (vs. 410p). We remain Buyers, but it is clear that the short-term operating environment is challenging.
As we have previously flagged, power and gas prices remain elevated, with Russian/Ukrainian tensions, low wind resources, and French nuclear woes all contributory factors. Although Good Energy is not subject to the tariff cap and hence not exposed to the fixed tariff/SVT roll problem faced by other suppliers, it has still experienced lower customer churn than expected. This has left it short the underlying commodity, and although prices were increased on 1st November, this has not been sufficient to cover current wholesale price levels. This has been exacerbated by wind conditions that are c.33% of seasonal norms, resulting in Good Energy having to buy power from the wholesale market to cover the shortfall on the PPAs it has with wind generators. The combination of the two will impact FY21E by £3m at the pre-tax level, with the majority due to the wind shortfall. We have cut our FY21E earnings estimates to reflect this (Figure 1 overleaf). At this stage, we have left FY22E broadly unchanged as a 30% price rise kicks in on 17th January, and we understand that this has been set on the basis of normal temperature and wind conditions, as well as a view on wholesale prices. Should it be colder, calm, or wholesale prices leg up further, we will have to revisit numbers again, a possibility that Good Energy has acknowledged by indicating that in such a scenario there will be a need for additional working capital. In this respect, it is actively engaged with its financing partners. Our target price is lowered to 410p, reflecting an increase in net debt as a consequence of additional costs in FY21E. We remains Buyers, but it is clear that the short-term operating environment is challenging.
GE has announced it intends to sell its 47.5MW solar/wind generation portfolio, with anticipated 1Q22 completion. The portfolio has debt of £39.1m (June 21) secured against it. We welcome the move to dispose of assets that we consider to periphery to GE’s strategy, and in light of higher power price assumptions have increased our enterprise value of the portfolio to £61m. Zap-Map is currently undertaking a funding round (anticipated size £7m), with completion in 1Q22. GE has indicated that it intends to participate in the funding round; we don’t rule out it being the sole participant. No indication has been given on the proportion of equity to be offered, but by way of indication, our current valuation of Zap-Map is consistent with £7m representing c.25% of a post-funding enlarged equity base at Zap-Map. We see end-user energy prosumerism as key to delivering net zero, a view we believe GE shares. GE is currently building a new platform for its energy service business, to enhance the existing offering, and deliver new services for feed in tariff customers. The incremental investment is £1m, which we incorporate in our updated forecasts. GE is not immune to the headwinds in the supply market, and has announced a short-term £2.5m negative impact on its supply business, arising from RO/FiT mutualisation costs (£1m), and additional commodity costs from a higher number of business and domestic customers than expected (£1.5m). We have adjusted FY21E for supply downwards by £2.5m, but leave FY22E unchanged given the pricing flexibility afforded by GE’s tariff cap derogation. With a valuation point of end-FY22 our TP remains unchanged at 425p, reflecting a higher net debt estimate due to the additional supply costs and energy services investment, offset by the higher generation portfolio valuation.
Ecotricity’s 400p/share offer for Good Energy lapsed on Friday after Ecotricity only secured only c.15.4% of the Good Energy free float, a resounding level of support for Good Energy and its strategy. Good Energy has this morning released a trading statement in which the company has stated: “We continue to expect a full-year financial performance in line with the Board’s expectations, assuming normalised consumption and weather for the remainder of the year.” Good Energy is over 90% hedged for the next 12 months, with a weighting to the upcoming winter, and has recently implemented material price increases in both the domestic and business supply segments. Given its derogation from the tariff cap, we believe that Good Energy can be more nimble than its competitors in responding to the wholesale price environment, being able to base its pricing on commercial decisions, and dictate the timing. The meltdown in the supply market has, in our view, accelerated the shift away from selling cheap electrons/molecules to innovative service-based offerings, and we believe that Good Energy has solid foundations on which to expand its suite of products in this sphere (Figures 1-4). Electrification of transport was already a clear direction of travel, but we believe that the fallout from ‘petrolgate’ will be extremely helpful. Zap-Map is making progress, with the commercialisation of the offer beginning to ramp-up. A fundraising round at Zap-Map is imminent, and we expect this to be accompanied by a strategic update and financial targets for the business. We have rolled our valuation forward to FY22E, with our updated forecasts and a lower WACC pushing our valuation up to 423p (Figures 9 & 10). We reinstate coverage with a 425p target price and a BUY rating.
YTD performance in line with expectations Management has indicated that YTD performance is in line with management expectations, a marked improvement when compared to the same period in 2020, a period adversely affected by several Covid-related factors. Supply volumes are up, and margins have benefitted from the forward purchasing of power/gas. Our estimates assume margin expansion, though we currently model flat volumes over the full year. Smart meter rollout continues, an essential building block on the road to smart tariffs The Business billing system integration is ‘progressing at pace’, with 90% of accounts migrated, up from >80% at FY20. The smart meter rollout continues, with 14,000 meters installed, of which 9,000 are 2021 installations. Smart meters are an essential building block in expanding the product suite with smart enabled tariffs, including half-hourly time of use tariffs. We consider such tariffs as a cornerstone of Good Energy being able to expand its mobility and energy-as-a-service offerings. Positive feedback for Zap-Map’s subscription service As we have previously commented, Zap-Map launched a new subscription service with enhanced features, and it is pleasing to see that early feedback from the rollout of the new service has been positive. Good Energy has indicated that the new subscription product will become a key service for EV drivers to be included as part of a customer centric bundle for Good Energy customers, alongside energy supply contracts, charging solutions and other EV-related services. A direction of travel towards dividend resumption Cash collection is in line with seasonal expectations, with direct debit receipts robust, with management of the expected short-term impact of the business system migration. 70% (£11.5m) of the Good Energy Bonds II will be repaid on 30th June. Good Energy intends to continue with capital simplification, balancing the return on assets, operating requirements, investment for growth and the resumption of dividend payments. Our estimates assume a 2.5p/share dividend for FY21E.
Zap-Map Plus (£29.99/year), Zap-Map Premium (£47.99/year) launched today At the time of FY20 results in April, Good Energy elaborated on a set of commercial milestones for Zap-Map, and today Zap-Map has announced the launch of two subscription options for its Zap-Map app, with additional functionality. Zap-Map Plus is available at £2.49/month for an annual plan, and offers drivers enhanced options to filter by new charge points, multiple locations, user ratings and more detailed location types. It also enables EV drivers to view new chargers installed in the last 30 days, save more user filters and route plans, add multiple vehicles, and is ad-free. Zap-Map Premium is available at £3.99/month for an annual plan, and in addition to offering all of the features of Zap-Map Plus, Zap-Map Premium subscribers can use the app within the in-car dashboard, via Apple CarPlay (with Android Auto available soon). Users will be able to locate suitable charge points, view live charge point status, and access route plans whilst on the move, with Premium also allowing drivers to save unlimited filters, route plans and EV models. A positive step forward on the electric road We view today’s launch of subscription options as a positive step forward, and a catalyst to drive share performance. That said, we continue to look to Good Energy to outline the financial scope of the opportunity for Zap-Map, both in respect of today’s launch, and other products/tie-ups in the offing, as well as the likely financial needs. Our current estimates are predicated on subscription rates of £40/year for fleet subscribers, and £50/year for private subscribers, but given the uptake trajectory that we model, the price points elaborated by Zap-Map today have negligible impact on our estimates in near-term.
Strong operating cash flow performance sees debt better expectations Good Energy has reported FY20 results this morning. EBITDA of £10m was above our £8.8m estimate, as was operating profit of £4.1m, which bettered our £3.7m estimate (see Figure 1 overleaf). The difference at the EBITDA level is largely due to the expected credit loss provision out-turning at £0.8m vs. £1.9m at 1H20, the latter the level we had factored into our estimates. The positive benefit was offset in part by depreciation charges exceeding our expectations in supply, and an impairment of the value of the Creathorne solar site. Net debt of £34.6m bettered our £38.3m expectation, with Good Energy performing strongly on operating cash flow, and bettering FY19 despite the challenges of Covid-19. As expected, no dividend was proposed, but the intention to resume payments in 2021 is clear. Positive signs on the roll-out of innovative products to drive the service offering We have previously commented about the opportunity that Good Energy has to leverage its customer base, but how more innovative products are required. We look for a strategic update in this morning’s presentation, commencing at 9.30am, but there are clear signs of progress highlighted in the results statement narrative. We welcome the launch of the Zap flash tariff, the ongoing development of the One Home proposition, a commitment to offer time of use tariffs for heat solutions, and a step-up in the smart meter rollout programme. We view the full implementation of Kraken, and the completed migration of 100% of B2C customer accounts migrated as a key step forward in this process, and likewise the shifting of the entire B2B supply business onto the Ensek Ignition platform, of which >80% has already been delivered. Zap-Pay will be rolled-out across UK networks in 2021, with progress being made with an increasing number of charge point operators to grow the network of Zap-Pay enabled chargers. Of note is the intention to launch a new fleet payment solution, improved routing, and a ‘freemium’ subscription model of the app for both consumers and fleet users. Smart EV chargers and an updated app to work alongside the Zap flash tariff appear to be another route to sophisticated smart tariffs, energy consumption optimisation, and a wider mobility as a service offering.
Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.
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£1m investment in Zap-Map via convertible Good Energy has made a further £1m strategic investment, via a convertible loan note, into Zap-Map’s parent company, Next Green Car Ltd (NGCL). The investment will fund the next stage of Zap Map’s growth and scale commercial opportunities. Good Energy acquired 12.9% stake in NGCL in 2019, increasing this to a majority 50.1% last year. Today’s £1m investment is by way of convertible loan notes with three broadly equal tranches throughout 2021. Good Energy can exercise conversion of the loan at the earlier of subsequent funding rounds, or a longstop date of 12 months, both at a material discount. Zap-Map to offer an Allstar experience Zap-Map has entered into a heads of terms agreement with Fleetcor UK, part of Fleetcor a worldwide leader in business payments, to integrate its Zap-Pay solution with the Allstar payment platform. This will cover commercial fleets of vehicles, aimed at delivering a solution to remove the payment complexities for businesses and commercial fleets. The Allstar One Electric fuel card enables fleet operators to manage all fuel types, both traditional and alternative (electric, hydrogen or hybrid) on one payment card. Allstar has already partnered with nine leading EV charging providers to create one of the largest multi-branded EV fuel networks in the UK, and provides fleet operators and drivers with access to more than 4,277 charging points across 1,700 locations throughout the UK. Grabbing a gust of the charging experience tailwind The consumer experience at public chargepoints is a concern for government, which is consulting on the subject, and, as we have previously discussed, a consultation that points to political support that is a potential tailwind for Zap-Map. In our view, the integration of Zap-Pay with Allstar is a step towards improving the experience, one which sees Zap-Map grab a gust of the tailwind, and accelerates Zap-Pay’s penetration of the fleet market. The relationship is in-line with Zap-Map’s intention to complement the development of its product offering with strategic partnerships, and tallies with our view that investment will be required to scale up the offering. Last week’s refinancing of the renewables portfolio has freed up funds for investment, and we would not rule out farming down renewables capacity if, and when, further funding is required. We look for Good Energy to outline the revenue opportunity later in the year.
Consolidating the financing of the renewables portfolio… Good Energy has announced the restructuring of the financing on its renewable generation asset portfolio to consolidate and simplify funding facilities. At 30th June 2020, Good Energy had two secured bank loans against its 50MW of wind and solar assets: £5.1m from the Co-Op secured against the Delabole wind farm, and £33.2m from Gravis Capital Management secured against the rest of the renewable assets. Today’s refinancing and restructuring consolidate the generation assets into one portfolio that will be solely financed by funds managed by Gravis and will amortise through to June 2035. The cost of settling the Co-Op debt is de minimis. …paves the way for repaying the Good Energy II bond… Headline gearing will not change on completion, but initially the refinancing will provide £7.8m of unrestricted cash, comprising £4.7m from the release of various reserve accounts and other restricted cash balances, and £3.1m of additional debt raised against the Delabole windfarm. The upfront cash provided, combined with existing strong levels of cash on the balance sheet (£18.1m at 31st December), give the company the ability to wholly repay Good Energy Bonds II, where the amount outstanding at 31st December was £16.8m. It is anticipated that the repayment will be completed in FY22, with a potential benefit to finance costs of £0.8m on a full year basis, once full repayment has been made. …and frees up capital to invest in energy as a service, and Zap-Map The transaction also provides ongoing improved visibility of cash flows, with relaxed debt coverage ratios, and a minor extension to the amortisation period. Future cash generated by the generation portfolio will be freed-up, and can be utilised by Good Energy for the likely investment opportunities and needs to build the energy as a service and Zap-Map offerings. Good Energy is the only supplier to date to be awarded ‘Gold’ status in USwitch’s green tariff accreditation scheme. The provenance of green tariffs is an issue, and we see this designation as a positive for Good Energy’s positioning and strategy.
Energy & Mobility With EV adoption rising rapidly, driven in part by government support, “Mobility as a Service” is set to evolve. Good Energy is expanding its activities in this space with a new EV tariff and three new strategic partnerships. The company already has a well-established partnership with ZapMap (50.1% stake in the company), which is set to play a key role for UK EV drivers, enabling them to plan and pay for EV charging across different networks using a single app. EV ‘time of use’ tariff – Good has opened an exclusive trial tariff launching in early 2021, as its best value EV tariff, to make it easier for UK road users to switch to electric and power their vehicles using clean electricity. The smart “time of use” tariff was developed using data from ZapMap and will offer lower and longer off-peak charging windows. Good has also signed three partnerships to further develop its offering: Mina Energy – A technology provider that helps make home charging cost effective and simple for fleets and their drivers. By integrating with drivers’ home charging infrastructure and energy providers, Mina supports fleets with paying for work vehicles charged from home. Horizon Energy Infrastructure – Provides Good Energy customers with asset-backed funding for their charging infrastructure, which is a key financial service as part of Good’s ‘One Point’ charging hardware solution. In effect, businesses will be provided with financial flexibility to manage the initial cost of installing the required EV infrastructure. Select Car Leasing – One of the UK’s largest independent specialists for car and van leasing. Select works closely with a variety of stakeholders to offer competitive services for drivers and fleets. Good will be Select’s green energy partner. Our View The electrification of transport is a major trend and Good is demonstrating its thought leadership in this space in the UK. The company is building on its partnership-orientated strategy to evolve the “energy as a service” marketplace that will drive long-term growth and differentiate it from other offerings, putting the business at the forefront of the UK’s energy transition. The partnership strategy also mitigates risk to shareholders. For now, we do not update numbers but the partnerships and tariff trial suggest that Good is becoming a ‘one stop shop’ to meet private/fleet transport needs that fits with the energy transition and drive growth.
Results: Revenues at £67.5m were up 6.2% yoy reflecting growth in Business customers (up 10.7% to 134k), more than offsetting a 0.8% decrease in domestic customers to 138.6k. External market factors, such as lower gas volumes (£-1.0m), the Covid-19 impact on pricing/mix (£-0.8m), a £1.9m ECL, and £1.2m higher depreciation from asset revaluation, offset in part by staff cost savings, were the key reasons for the shift to an underlying PBT loss. The balance sheet is firm at £36.5m net debt, of which £33.8m is against generation assets (£63.2m). Operations: Progress with Kraken is proceeding to plan with over 85% of customers migrated. Supply volumes were down 6% yoy in H1, largely on an 18% fall in gas volumes due to warmer weather; electricity volumes rose 9% driven by growth in business supply volumes. The company benefitted from strong renewable generation performance. Forecasts: We update forecasts with no change to revenues and EBITDA as the business is proving resilient. The upward revaluation of the renewable portfolio leads to higher depreciation, driving the 41% downgrade in underlying PBT. We also trim capex in the current year to £1m from £2m with the company only having spent £287k in the period. Whilst the interim dividend is not being paid, we leave the full year payment unchanged as the business is proving resilient from a cash perspective with strong billing and debt collection performance, with a decision to be taken prior to the FY20 results. Our view: Despite broader economic challenges, the business is proving resilient. The company benefits from a number of initiatives, such as its Zap investment for EVs and innovative service offerings for customers (e.g. heat pump tariffs), that offer scope for longer-term value generation. We remain positive. Buy.
Operations Underlying profitability is in line with management expectations, with an increase in domestic supply offsetting a decrease in SME volumes, although the company indicates the first signs of a pick-up in some segments. A short term gross margin impact is flagged due to falling wholesale energy prices impacting pricing of excess power purchased from Good’s independent generation customer base being fed back into a lower priced market. However, the impact from this has been offset through planned efficiency improvements and management initiatives. FiT business reports modest growth, although implementation of other services has been hampered by delays due to COVID on smart meter installation. Concerning liquidity, the company see cash collection in line with seasonal expectations and the healthy cash position at the start of the year remains intact (£41.6m net debt with £13.7m cash). The company has not seen an impact from the Covid crisis on receipts, but continues to assess possible risks. Strategy Good continues to invest to expand its range of services and innovation projects to deliver growth. As recently announced, the company has increased its stake in EV mapping company, Zap-Map to 50.1% by exercising its debt conversion right. The Kraken system implementation is progressing as planned with 80% of customers migrated successfully. Outlook The company remains cash generative and profitable with no change to the outlook, although in light of the Covid crisis challenges cannot be ruled out. Our View An encouraging report showing that, despite the challenging macro, the company’s business is proving resilient and we do not expect consensus to change materially from this update. Whilst the risks from the Covid crisis cannot be ignored, management appear to be navigating the challenges well. The strong green credentials of the group are also a positive against an increasingly environmentally-conscious backdrop that the current crisis appears to be enhancing, such as in the push for accelerated EV adoption.
Covid-19 Update Good’s update flags that the company has “seen no significant impact from the coronavirus outbreak to date”. Whilst overall demand has decreased and patterns shifted across the domestic and commercial supply base, cash collection to date has remained in line with normal seasonal expectations. Good entered the crisis in a strong financial position with net debt of £41.6m (cash £13.7m) and took actions to mitigate any potential short term cashflow issues. However, in light of the ongoing crisis the Board has decided to defer the final dividend previously announced (2.6p final and 3.7p full year), and similarly with regards to the 2019 employee bonus. The Board will review this position in September post the interim results. Operationally, the company’s generation assets continue to perform well, with above average output. The implementation of the Kraken customer service system is progressing as planned, with two thirds of customers now migrated onto this new system. Our view: We are encouraged that the business remains on track, and preserving cash resources until there can be greater confidence in underlying market conditions appears prudent.
Financials: Revenue rose 6.3% yoy in line, although underlying profit was down 7.9% yoy as lower gross profit margins flowed through. Non-underlying costs included £865m to the P&L associated with the Kraken investment. Net debt at £41.6m was up from £40.9m. Excluding IFRS 16 impact, net debt decreased to £36.2m reflecting the sale of assets mitigated by investment to acquire Kraken and into Zap Map. The board is recommending a final dividend of 2.6p, to take the full dividend to 3.7p (3.5p). Operations: Business supply customers grew 33%, with total business customers up 4.9%. FiT customers grew strongly by 32.5% surging ahead of the scheme closure in Q1’19. The Kraken implementation and rollout is progressing to plan as well as Zap Map (12.9% minority equity with scope to increase to 50.1% from April). These businesses are key to Good Energy having the technological capabilities to pursue its plans and offer energy as a service, reflecting the transition in the sector from passive energy supply. Supply customer numbers were up 2.5% in the period to 266.5k, with business customers up 4.9% to 127.8k, vs 0.6% growth with domestic customers to 138.6k. Good has yet to see an impact from COVID-19, but continues to monitor the situation. Forecasts: We detail changes overleaf, but highlight upgrades of 6-7% to operating profits and 3-6% to PBT. Our view: 2019 was a pivotal year for the group re-orientating through investment in technologies that will enable it to evolve further and build on its green credentials. 2020 will be the year of embedding these investments. We would expect that, as this progresses, a line of sight on value growth will become clearer.
AUM update AUM was £14.6bn at the quarter end: a 4%, or £552m, increase over the quarter and up 16%, or £2.0bn, over the half. Net inflows were £642m: an annualised rate of 19.5%, a very good quarter given the tough market backdrop for equities amongst UK retail investors. The net inflows were concentrated over four teams: the Economic Advantage, Global Fixed Income, Sustainable Investment and Multi-Asset teams. Within each team, the flows were spread between a number of funds. Neptune acquisition The acquisition of the Neptune business completed on 1 October and added £2.7bn to Liontrust’s AUM. The up to £40m all-share consideration comprises a £29m initial consideration, c.£6m for Neptune’s NAV and up to £5m contingent. This takes Liontrust’s AUM to £17.4bn, 37% higher than at the year end. Forecasts and recommendation Our EPS forecasts change by -1.3%, 0.4% and 1.9% in FY20E, FY21E and FY22E respectively after accounting for the trading update, the Neptune profits and the increased share count. We retain our BUY rating with an unchanged 870p target price and 21% FTR. Share price catalyst Interim results due on Wednesday 20 November 2019.
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The deal Good Energy has signed an agreement with Kraken Technologies, the technology arm of Octopus Group, for the provision of a new customer services technology platform. The platform is expected to drive cost savings, customer experience benefits and future growth by enabling customers to access competitively positioned clean energy and technology services. The total forecast investment is expected to be £4m, split 50:50 cash and non-cash, with paybacks expected to be within 18 months of the April 2020 full implementation. The write down of existing systems and cash investment will be taken across 2019 and H1 2020, with relevant transformation provisions taken in 2019. What the deal does Good intend for the efficiency savings to support growth of the business. We note that the strengthening balance sheet means that the £2m cash investment is easily manageable. With the unique green offering of Good Energy combined with the Kraken platform that will broaden the offering and services to Good’s residential customers, the company expects that this side of the business can return to growth, and that it will help retain existing customers. Recently, customer growth has been more orientated around business customers; at the latest interim results, the company reported a 4.1% yoy increase in business customers to 124.3k vs a 0.9% decline in domestic customers to 137.5k. Correction of interim statement The company reports misclassification of £4.9m of cash and equivalents and other current assets in the latest interim results. This is a function of timing that will work through working capital by y/e and will not impact expectations for the full year. Our View We are encouraged by the Kraken deal for two key reasons: 1) The growth we forecast for Good at the earnings level is driven predominantly by falling interest costs; this move will help drive underlying real earnings growth, 2) Octopus Group is an innovative group with numerous activities and an alliance could lead to further opportunities. We note Octopus Group has backed Octopus Energy that currently supplies c. 400k homes with green energy, albeit with a differing offering to Good’s. Management intend to update the market in November on the business, which should provide greater clarity on how this deal will deliver earnings momentum.
Results: Revenues at £63.5m were up 2.8% yoy, although gross profits were down 7.0% yoy as margins came under pressure due to business strategy investment and last year’s higher commodity prices. Operating profit and PBT however, were up 4.6% and 8.0% yoy respectively to £4.8m and £2.5m largely as last year carried £1.4m bad debt provision. Net debt at £35.5m is 30.9% below a year ago following the £4.7m sale of the Brynwhilach solar site and much improved working capital due to a warmer winter. We remind investors of the seasonality of the business with most profits made in H1, largely due to weather. Business: The supply business continues to shift toward business customers that were up 4.1% yoy to 124.3k vs a 0.9% decline in domestic customers to 137.5k leaving the total up 1.4% yoy at 261.8k. The market place remains competitive with customers remaining cautious given all the macro uncertainty. The company continues to prudently approach the value of its generation assets that help underpin value and differentiate it from struggling peers. This, along with its strengthening balance sheet positions Good well to continue to evolve its offering, shifting toward energy services, developing capabilities in SMART metering and investing in technology enabled services, e.g. for EVs. Our View: The interims show that all is on track with the company in an increasingly strong position to make investments with some planned for H2 - we assume £2.5m for the full year vs H1 spend of £600k –as Good advances various strategic options for services to customers.
Good Energy’s unique equity proposition is its combination of renewable generation capacity with a growing retail energy business. All energy sold to customers is sourced from renewable sources, with approximately 19% generated by its own solar and wind farms and the remainder procured via long-term contracts from third-party renewable generators. The stock is attractively valued in comparison to its forecast high level of growth.
Good Energy, the independent supplier and generator of renewable energy, has announced FY16 results showing revenue up 41% to £90.4m with PBT of £1.4m, slightly ahead of our £1.3m expectation. Our headline estimates remain unchanged although EPS for FY17 is marginally lower reflecting an increase in shares in issue. We anticipate further progress as the group leverages the benefits from improved systems and economies of scale as well as from various ongoing efficiency initiatives.
First Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march. Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.
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Good Energy, the independent supplier and generator of renewable energy, has announced the sale of its 5MW Oaklands solar farm. The statement also comments that although the Group had prudent hedging in place, trading was negatively impacted by exceptional volatility in short term power prices between late October and late November but in December had returned to more normal conditions. We have reduced our FY16 PBT estimate by £0.2m to take account of the additional costs associated with recent power pricing volatility whilst our FY17 estimates remain unchanged.
Ultimate Products—The Telegraph reports Jim McCarthy, former chief of Poundland has been appointed Chairman of Ultimate Products ahead of a £100m listing in H1 2017. Ultimate Products owns the Beldray cleaning brand and the licence to sell Russell Hobbs and Salter electrical products in the UK.
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Good Energy is in the final stages of implementing a new billing system, which will enable it to drive increased growth and further enhance customer service that could potentially transform the valuation of the business. The Group recently announced a solid set of H1 results with progress made across all divisions. Increasing demand for renewable energy combined with government commitments to renewable obligations should continue to provide opportunities for the Group whilst longer term, possible industry consolidation could provide acquisition opportunities.
Good Energy, the independent supplier and generator of renewable energy, has announced FY15 results showing revenue up 12% to £64.5m with PBT of £0.1m, slightly ahead of our breakeven expectation. The group continues to experience rapid growth in its supply business with customer numbers up 44% to 219k, whilst owned generation output nearly doubled to 77GWh. Profit was impacted by a £2.1m PBT loss in the development division which was affected by changes to regulation that impacted expected site sales. Costs in this division have now been reduced which combined with continued growth in the other divisions and economies of scale should lead to a return to meaningful profit in the current year. Our headline estimates remain unchanged although EPS is slightly reduced reflecting an increase in shares in issue.
Good Energy has a niche in the UK electricity market, being one of the very few supply companies to be able to offer electricity sourced from entirely renewable generation. It is continuing to grow market share from the big six supply companies.
Good Energy has a strong niche in the UK electricity market, being one of the very few supply companies to be able to offer electricity sourced from entirely renewable generation. It is continuing to grow market share from the big six supply companies.
Good Energy has a strong niche in the UK electricity market, being one of the very few supply companies to be able to offer electricity sourced from entirely renewable generation. It is continuing to grow market share from the big six supply companies and its final results statement showed continued evidence of this. Good’s underlying growth remains strong although short-term earnings growth will be impacted by the absence of significant one-off profits from asset sales and a more normal tax charge.
Good Energy has grown its customer base at the expense of the major UK energy suppliers and looks set to continue to do so. Its other success is in generation, where available capacity increased by 160% last year. This combination of an attractive alternative to the “Big Six” and vertical integration across the energy value chain makes Good a potential winner as the UK energy market develops over the next few years.
Good Energy has a strong niche in the UK electricity market, being one of the very few supply companies to be able to offer electricity sourced from entirely renewable generation. It is continuing to grow market share from the “Big Six” supply companies and its full year results statement showed continued evidence of this. Good’s underlying growth remains strong.
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