TIDMINSE
RNS Number : 3042I
Inspired Energy PLC
11 December 2020
11 December 2020
Inspired Energy plc
("Inspired Energy" or the "Group")
Disposal of SME Division and Trading Update
Inspired Energy (AIM: INSE), the leading consultant for energy
procurement, utility cost optimisation and legislative compliance
in the UK and Ireland, announces that it has completed the disposal
of the Group's SME division, consisting of subsidiaries, Energisave
Online Limited, KwH Consulting Limited and Simply Business Energy
Limited, ("SME Division") to its management team (the "Buyer"), by
way of a management buyout ("MBO"), for a total consideration of up
to GBP10.5 million, calculated on a cash free debt free basis (the
"Disposal"). The Group also announces a trading update noting the
effect on Q4 due to the ongoing COVID-19 related lockdown.
The Disposal has been undertaken to enable the Group to focus
exclusively on its strategy of providing expert assurance and
utility cost optimisation services to Corporate Energy Consumers,
helping them manage energy costs effectively and delivering their
Net Zero Carbon and ESG objectives.
SME DIVISION
-- The SME Division provides price comparison and contract
arrangement services for SME consumers, which the Board considers
to be a non-core activity, contributing 7% of Group revenues during
H1 2020.
-- For the year ending 31 December 2019, the SME Division
generated revenues of GBP5.6m and adjusted EBITDA of GBP1.9m, with
net assets of GBP7.9m.
-- During 2020, the financial performance of the Group's SME
Division has been significantly impacted by the on-going pandemic,
with the SME Division experiencing a reduction in demand for energy
supplier switching services.
-- For the six-month period ending 30 June 2020, the SME
Division generated revenues of GBP1.9m (H1 2019: GBP2.88m) and
adjusted EBITDA of GBP0.5m (H1 2019: GBP0.97), after utilising the
benefit of the Government Coronavirus Job Retention Scheme ("CJRS")
extensively.
-- The downturn in performance continued during H2 2020, with
the SME Division being loss making in the period, despite the
ongoing utilisation of the CJRS.
KEY TERMS
-- Aggregate consideration of up to GBP10.5 million, is payable
to Inspired Energy on the collection and run off of the SME
Division's accrued income balance, the majority of which is
expected to be recovered within three years of completion.
-- The Buyer and Inspired Energy have entered into a
transitional services agreement ("TSA") for a period of 36 months
from completion.
-- Working capital facility ("Facility") provided from Inspired
Energy to the Buyer, of which GBP250,000 will be drawn at
completion, with up to a further GBP500,000 available to be drawn
in tranches across the six months from completion, subject to
compliance with the terms of the facility.
-- The Facility carries an interest rate of 5% per annum above
Bank of England base rate, with quarterly repayments commencing
from month 18, with the Facility repaid in full three years from
completion. The provision of the Facility has the benefit of
ensuring efficiency in the transaction process, as well as
facilitating the grant of security in favour of Inspired
Energy.
-- To maintain full market coverage, where the Group has a need
to provide price comparison services to SME consumers, following
the MBO the Buyer will become a supplier to the Group to enable a
continuation of that service provision.
TRADING UPDATE
As set out the time of the interim results, announced on 9
September 2020, the Group reported that the SME division was
materially impacted by COVID-19. The latest lockdown has continued
to impact the performance of the SME Division, which has been loss
making since Q2 as a result of the significant reduction in SME
customer energy switching activity and consumption. Following the
Disposal, the SME division will be reported as a discontinued
operation in the Group's full year result. The anticipated recovery
for the SME Division in the latter part of the period did not
materialise as a result of the impacts of the continued lockdown,
and as a consequence underlying EBITDA contribution from the SME
Division is now anticipated to be c.GBP1.2m below current
expectations for FY2020.
Within the Group's continuing operations of the Corporate
Division, trading in the core Corporate Assurance Service business
remains robust and ahead of management expectations for the full
year, despite the disruption in Q4. The average energy consumption
reduction by customers for the April to December period is expected
to be c.18%, well ahead of the 25% reduction modelled in the
Board's COVID downside case.
The Group's Optimisation Services businesses, which are project
based and typically require access to customer sites, had been
disrupted from April to September as a result of pandemic
restrictions and some project deferrals. Whilst in October, the
Optimisation Services businesses did experience a partial recovery,
as expected, the lockdowns during November have again restricted
site access and caused the deferral of some additional projects
into FY2021. As a result of the short term disruption within
Optimisation Services, in part offset by the continued resilient
performance in Assurance Services, the Board now expects the
Corporate division and consequently the Group's continuing
operations to also report FY2020 underlying EBITDA approximately
c.GBP1.2m below current expectations. Given the impact to
Optimisation Services revenues are primarily deferrals in project
delivery, the Board reiterates FY2021 EBITDA guidance for the Group
(being the continuing operations, adjusted for the divested SME
Division).
A further trading update will be announced in January 2021.
Related Party Transaction
Andrew Nuttall is the Managing Director of the SME Division and
as a result the Disposal is classed as a related party transaction
under Rule 13 of the AIM Rules for Companies. The directors of
Inspired Energy, all of whom are deemed to be independent for the
purposes of the transaction, having consulted with the Group's
nominated adviser, Shore Capital & Corporate Limited, consider
the terms of the Disposal, the Facility and the TSA to be fair and
reasonable insofar as shareholders are concerned.
Commenting on the transaction, Mark Dickinson, CEO of Inspired
said: "The disposal of the SME Division represents an important
milestone in the strategic direction of Inspired Energy. Unlike the
Corporate Division, where Assurance Services have performed better
than our COVID Sensitised model, and Optimisation Services where
FY2020 performance is impacted by deferrals to project delivery,
but is expected to recover in FY2021, the SME Division has proved
less resilient to the pandemic. This transaction allows the Group
to focus solely on our core service offering to Corporate Energy
Consumers with a business that is more resilient to the COVID
pandemic in FY2021.
"Having taken the decision to divest the SME Division we are
delighted to have agreed the sale with Andrew Nuttall, who has
driven the performance of the division since formation. The Board
believes a sale of the SME Division by MBO is the optimal route as
it enables the Group to realise value, maintain continuity of
service delivery to the customer base and enable Inspired Energy to
maintain full market coverage. We wish the team every success for
the future.
"Whilst the financial performance of the Group for FY2020 is
disappointing, it is a consequence of factors outside of the
Group's control. The Board is pleased with the continued
outperformance of the Group's core Corporate Assurance Service
lines and believes that Optimisation Services will regain strong
momentum once restrictions on movement are lifted. The Board
continues to believe there is a strong and growing demand for
optimisation services as ESG becomes a higher priority for
Corporates."
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) (" MAR ") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
Enquiries:
Inspired Energy plc
Mark Dickinson, (Chief Executive Officer) +44 (0) 1772 689250
Paul Connor, (Chief Financial Officer) www.inspiredenergy.co.uk
Shore Capital (Nomad Adviser and Joint
Broker)
Advisory
Edward Mansfield / James Thomas / Michael
McGloin
Broking
Malachy McEntyre +44 (0) 20 7408 4090
Peel Hunt LLP (Joint Broker)
Mike Bell/Ed Allsopp +44 (0) 20 7886 2500
Alma PR +44 (0) 20 7193 7463
Justine James / Josh Royston / David +44 (0) 7525 324431
Ison / Molly Gretton inspired@almapr.co.uk
Notes to editors
Inspired Energy plc is the leading consultant for energy
procurement, utility cost optimisation and legislative compliance
in the UK and Ireland . Inspired Energy provides services to over
2,400 UK corporate business consumers, which represent c.6.7% of
the UK's expenditure on electricity and over 400 in the ROI.
Inspired Energy is ranked as the UK's number one advisor in the
most recent independent Cornwall Insight Report, which was achieved
by addressing client needs and using that insight to shape the
business strategy in addition to the acquisition and investment
activity.
The Company provides expert assurance and optimisation services
to Corporate Energy Consumers to help them manage energy costs
effectively and deliver their Net Zero Carbon and ESG objectives.
In November 2020, the Company received the London Stock Exchange's
Green Economy Mark in recognition of its environmental and
strategic advice, service and support to customers.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCKKKBNKBDBCBD
(END) Dow Jones Newswires
December 11, 2020 02:00 ET (07:00 GMT)
Inspired (LSE:INSE)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Inspired (LSE:INSE)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
