TIDMINSE
RNS Number : 5568G
Inspired PLC
30 March 2022
30 March 2022
Inspired PLC
("Inspired " or the "Group")
Final Results 2021
A year in which the Group delivered strong growth both
financially and operationally
Inspired (AIM: INSE), a leading technology enabled service
provider supporting businesses in their drive to reduce energy
consumption, deliver net-zero, control energy costs and manage
their response to climate change, announces its consolidated,
audited final results for the year ended 31 December 2021.
Financial highlights
%
2021 2020 change
Revenue GBP67.9m GBP46.1m +47%
Gross profit GBP50.7m GBP38.9m +30%
Adjusted EBITDA* GBP19.8m GBP12.8m +55%
Adjusted profit before tax** GBP13.4m GBP6.9m +94%
Profit/(loss) before tax GBP1.1m (GBP4.5m)
Underlying cash generated from
operations*** GBP10.2m GBP11.6m -12%
Adjusted diluted EPS**** 1.30p 0.70p +86%
Diluted basic EPS 0.16p (1.34p)
Net debt GBP32.9m GBP18.8m -75%
Corporate order book GBP67.5m GBP63.0m +7%
Dividend per share 0.25p 0.22p +14%
------------------------------- -------- --------- -------
Operational and strategic highlights
-- Completed acquisition of Businesswise Solutions Limited
("Businesswise") and General Energy Management Limited ("GEM") in
Q1 2021.
- In line with strategy to acquire Energy Assurance businesses
which add Units of Opportunity to our portfolio providing enhanced
opportunity to cross sell our Net Zero Carbon services, enabling us
to help those clients make a difference by removing carbon from the
environment.
-- Software - continued to deliver modules for our Software
Solutions platform during 2021 and to develop incremental modules
that underpin the technology enabled services we provide.
-- ESG - 2021 saw the voluntary publication of our first TCFD
(Task Force on Climate Related Financial Disclosures) disclosure
for the Group and an ESG disclosure in accordance with GRI (Global
Reporting Initiative) principles. The Group also retained its Green
Economy Mark status during 2021.
Board update
-- Richard Logan appointed Non-Executive Chairman with Sangita
Shah and Dianne Walker appointed as
independent Non-Executive Directors in H2 2021.
-- Proposed appointment of David Cockshott, Chief Commercial
Officer to the Board. David joined the Group in 2020 and will
become an executive director on the Board from 1 April 2022,
assuming operational responsibility for our Energy Solutions
Division.
Current trading and outlook
Trading in Q1 has started in line with expectations as the Group
continues to manage the current macroeconomic and geopolitical
uncertainties.
Cash collection has started strongly in the new financial year
following the increase in trade receivables at the year end as a
result of the strong growth experienced in the Optimisation
Division during H2 2021.
We note that new business sales have started particularly well
with the orderbook values of new customer contracts signed in the
first two months of the year being some 93% ahead of the previous
year. This should not be confused with revenue growth as order book
will flow to revenue over multiple years and this performance is
likely to smooth over the year. However, a positive start despite a
challenging macroeconomic environment.
Commenting on the results, Mark Dickinson, CEO of Inspired,
said: " Despite the changing landscape, we are delighted to report
on a period of significant progress across the Group in 2021, both
financially and operationally. The performance reflects the
continuing recovery in energy consumption, alongside a return to on
site access to client premises, accelerating the delivery and
implementation of energy optimisation services.
"Turning to current trading, we are pleased that Q1 has started
in line with expectations, and we are continuing to successfully
manage the uncertain macroeconomic and geopolitical backdrops.
Inspired remains focused on helping its clients manage their costs
and sustainability challenges through this crisis.
"Looking ahead, the trend towards greater ESG focus coupled with
strong growth of the Group's revenues, and adjusted EBITDA in the
year, has created a strengthened platform capable of generating
long-term growth, and underpins the Board's confidence in achieving
our financial goals."
Note
*Adjusted EBITDA is earnings before interest, taxation,
depreciation, and amortisation, excluding exceptional items and
share-based payments.
**Adjusted profit before tax is earnings before tax,
amortisation of intangible assets (excluding internally generated
amortisation related to computer software and customer databases),
exceptional items, share-based payments, the change in fair value
of contingent consideration and foreign exchange gains/(losses) (A
reconciliation of Adjusted profit before tax to reported profit
before tax can be found in note 5)
***Underlying cash generated from operations is cash generated
from operations, as adjusted to remove the impact of restructuring
costs, fees associated with acquisitions and dividends declared to
NCI.
****Adjusted diluted earnings per share represents the diluted
earnings per share, as adjusted to remove amortisation of
intangible assets (excluding internally generated amortisation
related to computer software and customer databases), exceptional
items, share-based payments, the change in fair value of contingent
consideration and foreign exchange gains/(losses).
For further information, please contact:
Inspired PLC www.inspiredplc.co.uk
Mark Dickinson (Chief Executive Officer) +44 (0) 1772 689 250
Paul Connor (Chief Financial Officer)
Shore Capital (Nominated Adviser
and Joint Broker) +44 (0) 20 7408 4090
Patrick Castle
James Thomas
Michael McGloin
Peel Hunt LLP (Joint Broker)
Mike Bell
Ed Allsopp +44 (0) 20 7418 8900
Alma PR +44 (0) 20 3405 0205
Justine James +44 (0) 7525 324431
Hannah Campbell Inspired@almapr.co.uk
Chairman's Statement
The significant progress made during 2021 across the Group is,
of course, at the time of writing, placed into stark context by the
war in Ukraine and our thoughts are with all those who are
suffering.
2021 was a year of significant progress across the Group, both
financially and operationally, with a strengthened platform
created, capable of generating long term growth as our targeted
markets continue to recover from the impact of the pandemic.
2022 started as a year less dominated by Covid-19, but the
landscape in which we all operate has dramatically changed due to
the impact of the war in Ukraine, which continues to be fast
moving, causing significant volatility and uncertainty across
commodity and energy markets. The crisis has further highlighted
energy as an essential board level priority and the Group continues
to take every opportunity to help all customers mitigate the cost
of energy, manage their energy consumption and carbon emissions
during these unprecedented times.
Inspired PLC
In July 2021, Inspired Energy PLC became Inspired PLC. The name
change was affected to reflect the structure into which the Group
has evolved: a technology enabled service provider with the market
leading position for energy procurement, utility cost optimisation
and sustainability enhancement in the UK and Ireland with three
clearly defined divisions: Inspired Energy Solutions, Inspired ESG
and Inspired Software.
Board changes
On 1 July 2021, I was delighted to assume the role of
Non-Executive Chairman having served as the senior independent
Non-Executive Director of the Group since 2017, succeeding our
retiring Chairman, Mike Fletcher, who had been a member of the
Board since the Group's IPO in 2011. On behalf of the Board and all
at Inspired, I wish to thank Mike for his invaluable contribution
throughout his time on the Board.
During H2 2021, the Board was strengthened with the appointments
of Sangita Shah, who chairs the Remuneration Committee, and Dianne
Walker, chair of the Audit and Risk Committee, as independent
Non-Executive Directors. Both bring a wealth of varied and relevant
experience complementing the skill sets of our existing Board
members.
The Board is also pleased to announce the proposed appointment
to the board of David Cockshott, the Group's Chief Commercial
Officer. David, who joined the Group in 2020 in the role of Chief
Commercial Officer, will become an executive director on the Board
from 1 April 2022. David is an experienced leader with over 30
years in energy, having held board positions at Marubeni-owned
Smartest Energy Limited and at Inenco Group, as well as executive
responsibility for I&C and latterly, Domestic Markets for
energy supplier Npower. As the Group continues to grow, it is
important to expand the executive leadership bandwidth and David
will assume operational responsibility for our Energy Solutions
Division for the 2022 year.
From the 1 April 2022, the Board will consist of three Executive
Directors supported by a Non-Executive Chairman and three
independent Non-Executive Directors, representing a broader mix of
skills and diversity to align with the Group's evolving
strategy.
Acquisitions
In March 2021, the Board was pleased to conclude the
acquisitions of Businesswise and GEM, which are highly
complementary additions to the Group. We welcome the Businesswise
and GEM teams to the Group.
Integration of the acquisitions is progressing to plan, and both
businesses are performing in line with management expectations,
further increasing Inspired's market share in Energy Assurance
Services.
Dividend
Since IPO, Inspired has established a track record of delivering
profitable and cash-generative growth which has facilitated a
consistent and progressive dividend policy.
Accordingly, the Board is pleased to propose a final dividend of
0.13 pence (2020: 0.12 pence) subject to shareholder approval at
the AGM in June, resulting in a full year dividend of 0.25 pence
(2021: 0.12 pence). The dividend aligns with the Board's stated
policy of a dividend cover of at least 3x earnings, with the
objective of delivering progressive dividend growth over time.
The dividend will be payable on 26 July 2022 to all shareholders
on the register on 17 June 2022 and the shares will go ex-dividend
on 16 June 2022.
Staff
On behalf of the Board, I would like to thank all our employees,
who continue to overcome the challenges of these unprecedented
times. We have continued, throughout, to invest in our valued team
and the business. The Group takes every opportunity to help all
customers mitigate the cost of energy, manage their energy
consumption and carbon emissions during these unprecedented
times.
Richard Logan
Chairman
29 March 2022
Chief Executive Officer's Statement
The Group delivered strong growth in 2021, as the UK economy
bounced back from the pandemic. We made significant progress in
delivering on its strategy to provide a holistic suite of services
to support corporate businesses on their journey towards Net Zero
Carbon and to manage their response to climate change.
Review of 2021
2021 was a strong year for the Group in which we delivered solid
organic growth, with a significant increase in revenue, in part
reflecting the bounce-back in activity as restrictions were lifted,
with trading gaining strong momentum in H2 2021, as the strategic
plans we initiated in 2019 came to fruition. The favourable
underlying value drivers of Net Zero Carbon and ESG continued to
drive growth and opportunity.
Evolving into Inspired PLC
During 2021, the Group completed its evolution into Inspired
PLC, operating with three divisions and four reporting segments,
with the Group starting to report financial results under this
structure for the first time.
We continued to grow organically across all three divisions,
with this supplemented by acquisitions within the Energy Solutions
Division, increasing the active UK clients under management from
3,400 to 3,500. The Group's revenue base continued to diversify,
with optimisation revenues increasing to 44% of the Group total
(31% 2020), reflecting the societal shift towards climate change
and Net Zero Carbon.
Inspired ESG Inspired Energy Inspired Software
Delivers end-to-end Delivers energy, water Delivers technology
solutions for investors and sustainability and software solutions
and Corporate Businesses assurance and optimisation that underpin the
to make effective services so Corporate services provided
ESG Disclosures and Businesses can manage by Inspired PLC and
transform them into their costs better, makes them available
ESG impacts. reduce their carbon to third parties.
efficiency and meet
their net-zero targets.
============================ ========================
Energy Assurance Services
Energy Assurance Services trading in the year remained in line
with expectations as the Group continued to deliver on its strategy
to broaden its customer base and significantly increase its units
of opportunity (carbon emission points), with energy consumption
levels increasingly recovering to pre pandemic levels.
Energy Optimisation Services
Alongside the ability to access client sites more readily,
Optimisation Services revenues also benefitted significantly from
the accelerating focus on the Net Zero Carbon agenda and the need
for businesses to respond to climate change, driving record
revenues for the division in H2 2021.
The acceleration in Optimisation Services delivery in H2 2021,
from a business with a low utilisation rate in H1 2021, led to an
increase in working capital utilisation into the year end which we
expect to normalise during 2022.
ESG Services
Our organic entry into the ESG market for the provision of
disclosure services was very encouraging, as we went from a
standing start to revenues of GBP0.9m, pioneering a pragmatic,
practical and data driven service that cost effectively delivers
ESG disclosures for clients.
Software Solutions
The number of third parties using our software increased from 50
to 60, delivering 13% organic growth. The Group deployed three new
modules during the year.
Acquisitions
We completed the acquisitions of Businesswise and GEM, in Q1
2021, as the final phase of the deployment of our capital from the
2020 equity raise. These acquisitions focused on the Energy
Assurance Space and increased the units of opportunity (carbon
emission points) that we work with and increases the surface area
of opportunity to provide Optimisation and ESG services to these
clients.
Post period end, the Group acquired I-Prophets Compliance
Limited and Digital Energy Limited, for an aggregate consideration
of GBP0.6m. I-Prophets Compliance Limited and Digital Energy
Limited are two trading subsidiaries of Information Prophets
Limited, in whom the Group previously held a strategic investment
position. As part of the transaction to acquire I-Prophets
Compliance Limited and Digital Energy Limited, the option to
acquire Information Prophets Limited the Group entered in 2019 was
amended to reflect the Group acquiring two of the trading
subsidiaries of Information Prophets Limited.
The businesses are a niche competitor for our CARO monitoring
and targeting software and give us access to 29,000 which further
increases our units of opportunity.
Evolving our ESG Disclosures
The Group is delighted to publish its mandatory disclosures with
respect to Streamlined Energy & Carbon Reporting (SECR) and our
voluntary disclosures with respect to Taskforce on Climate Related
Financial Disclosures (TCFD) and ESG (completed in line with GRI
principles).
We are proud to retain our Green Economy Mark from the London
Stock Exchange and achieve carbon neutrality for 2021. You will
find a full disclosure of our Sustainability and ESG impacts in our
separately published suite of disclosures on our website, along
with a summary of all of our business policies and our performance
against them during 2021.
Strengthening our Board
2021 saw a significant step forward in the composition of our
Board, adding a broad range of skillsets suitable for enabling our
ambition to grow from an enterprise value of c.GBP200m to GBP500m
over the next five years. The appointments of Dianne Walker as an
audit and finance specialist and Sangita Shah, who sits on the
Board of the QCA as a strategy and governance specialist, combined
with Sarah Flannigan as a technology specialist with energy
experience, brings a wealth of relevant experience at Board level.
Richard Logan, a veteran of AIM, was appointed as Chairman during
2021, positioning us well for the next phase of growth and
development.
Increasing our Executive Bandwidth
As the group continues to grow and has effectively trebled in
size since 2017, it is appropriate to expand our executive
leadership. We are delighted that David Cockshott, who joined the
Group in 2020 as Chief Commercial Officer, will become an executive
director on the Board from 1 April 2022. David will have
operational responsibility for our Energy Solutions Division for
2022.
Macro Environment
The war in Ukraine
At the time of publishing our 2021 results, the impacts of the
war in Ukraine have been fast moving and continue to cause
significant volatility and uncertainty across commodity and energy
markets. As set out in our update to the market on 21 March 2022,
we have proactively considered the impact of this event in its
entirety and the Group is focused on the mitigating actions we can
take by supporting clients with contract replacement. Inspired
remains focused on helping its clients manage their costs and
sustainability challenges through this crisis.
Managing an energy crisis
The impact of the energy crisis experienced during H2 2021 has
continued into 2022. The impact on domestic energy consumers,
including the raising of the price cap, has been well documented.
The unprecedented nature of the crisis has and will present a
number of challenges to society as a whole. However as corporate
businesses do not benefit from an energy cap, the price inflation
will impact those businesses more significantly.
It is important to note that Group revenues and profits are not
directly impacted by changes in energy commodity prices. Market
conditions, including record high commodity prices, have led to
some customers delaying renewals of supply contracts, which is
predominantly the point at which assurance customers contract with
the Group. Management believes this is a point of timing, not
contraction of demand, with customer retention remaining consistent
with previous years during the period at c. 85%.
Inspired plc is focused on helping its clients manage their
costs through this crisis and note that the economics of projects
that reduce customers' energy consumption and carbon emissions
offer a materially enhanced return on capital in this environment.
The Group is well placed to help clients address this once the
macro environment normalises.
Inflation
The compound effect of the war in Ukraine, together with the
rapid rise in energy costs, is likely to lead to the current
inflationary environment persisting for some time. This will
provide medium to long term opportunity for the Group but, as with
all businesses, could lead to short term pressures given the lag
between absorbing inflation in the cost base and increasing the
market price of our services to recover this.
In response to the potential for increased inflationary pressure
the Group is accelerating its roll out of Robotic Process
Automation (RPA) and the expansion of our operations centre in
Mumbai.
Covid Recovery
Following the introduction of further lockdown measures in early
2021, which prevented access to customer sites, the delivery of
Optimisation Services was severely disrupted during H1 2021. H2
2021 saw a return to business as usual and a catch up in the
delivery of Optimisation Services, once we were allowed access to
clients' sites again.. We observe that save for any new
developments with respect to the pandemic this is no longer a
limiting factor on business performance.
Outlook
The bigger picture
The war in Ukraine, at the time of writing, places all of the
risks and opportunities in perspective when considered in the
context of life and death situations. The geopolitical and
macroeconomic environment make the excitement of our opportunities
seem trivial and provides a backdrop of risks that are out of our
control to be managed.
Despite this unprecedented backdrop, we find ourselves with a
strong platform for growth, an evolved strategy and one of the
market leaders in our space. We are well placed to deliver value to
corporate businesses.
I am sure many share our shock at the abhorrent actions of the
Russian regime and our hope that the war and resulting humanitarian
crisis ends soon with a peaceful resolution.
Delivering Net Zero Carbon Solutions
Further to COP26 and noting the favourable macro drivers in
relation to Net Zero Carbon and ESG, for 2022 we will be focusing
on delivering further cross sells to our existing clients and
maximising the potential of each of the Units of Opportunity within
the portfolio.
Acceleration of ESG Solutions
During 2021, we proved the concept of ESG solutions,
demonstrating we could sell and deliver services to existing
clients and developing an understanding of the value proposition
and the value that clients will ascribe to such services.
Given that our organic entry into ESG has proved successful,
2022 will see us start to make a more substantive investment into
ESG resources and capability. We will reinvest c.GBP1.5m of EBITDA
in order to expand our ESG delivery capabilities (through people
and processes) in order to scale up, so the Group can stay ahead of
demand.
More generally we would expect this investment to be a catalyst
for accelerating the growth of the ESG Solutions division, which we
believe has an addressable market that is equivalent to the size of
the market for Energy Assurance and Optimisation Services and
provides an opportunity for material organic growth.
Delivering Software Solutions
Our Software Solutions Division is continuing to develop modules
which allow the evolution of our technology enabled services and
expand the number of the third parties that we provide such
software to.
The provision of our software to other service providers in the
marketplace generates additional economic rents from capital
expenditure that the Group would have to undertake in order to
provide its own technology enabled service. Furthermore, by
technology enabling other service providers in the marketplace, we
professionalise our pipeline for future M&A activity. As our
technology helps those other service providers grow and their
owners seek to de-risk, the Group becomes a natural buyer for such
businesses.
Continued M&A
In addition to a track record of consistently delivering organic
growth, the Group has built a strong capability to deliver and
integrate acquisitions. Having completed three acquisitions in
2021, the next year will see us continuing to build our acquisition
pipeline with a particular focus on businesses that help build our
capability with respect to Optimisation and ESG Services.
Q1 2022 update
Trading in Q1 has started in line with expectations as the Group
continues to manage the current macroeconomic and geopolitical
uncertainties.
Cash collection has started strongly in the new financial year
following the increase in trade receivables at the year end as a
result of the strong growth experienced in the Optimisation
Division during H2 2021.
We note that new business sales have started particularly well
with the orderbook values of new customer contracts signed in the
first two months of the year being some 93% ahead of the previous
year. This should not be confused with revenue growth as order book
will flow to revenue over multiple years and this performance is
likely to smooth over the year. However, a positive start despite a
challenging macroeconomic environment.
Mark Dickinson
Chief Executive Officer
29 March 2022
Chief Financial Officer's Statement
We are pleased to report strong financial results for the year
ended 31 December 2021 where we have remained agile and alert to
the changing restrictions and environment in which we operate,
navigating the challenges of the ongoing pandemic and global energy
crisis.
2021 was a year in which we achieved a 47% increase in revenue,
with total revenues of GBP67.9m compared to GBP46.1m in 2020.
Following the significant impact of the Covid-19 pandemic in 2020
and Q1 2021, the Group's organic revenue showed a strong recovery
in 2021, increasing by 37% (2020: -20%). Group Adjusted EBITDA
increased by 55%, driven by significant increases in contribution
from Optimisation Services, generating GBP5.0 million having
contributed a loss of (GBP0.5) million in 2020, and Assurance
Services EBITDA increasing 18% to GBP17.0 million (2020: GBP14.3
million).
This reflects the ongoing economic activity recovery from the
challenges presented by the pandemic, partly driven by a recovery
in energy consumption by our assurance customers and, as
anticipated, the resumption, and subsequent acceleration of
optimisation projects in H2 2021 once access to client's premises
was no longer restricted by pandemic rules.
The war in Ukraine has created volatility across commodity and
energy markets and the Group continues to manage the uncertain
macroeconomic backdrop, where additional risks need to be
managed.
Divisional Performance
Energy Solutions Division
The Energy Solutions Division comprises Energy Assurance
Services and Energy Optimisation Services.
Energy Assurance Services
Energy Assurance Services trading in the year remained in line
with expectations. The Group continued to deliver on its strategy
to broaden its customer base and significantly increase its units
of opportunity (also referred to as client meter points or carbon
emission points), with energy consumption levels continuing to
recover to pre pandemic levels.
Energy Assurance Services generated 52% of total Group revenues
in 2021 (2020: 64%) being GBP35.5 million (2020: GBP29.6 million)
an increase of 20%, of which 5% was organic.
Energy Assurance Services contributed adjusted EBITDA of GBP17.0
million, an increase of 19% (2020: GBP14.3 million). The adjusted
EBITDA percentage margin was 48% (2020: 48%).
Energy Optimisation Services
The Group's Energy Optimisation Services division gained
momentum throughout 2021, accelerating in H2 2021, following the
lifting of Covid-19 related restrictions, which had previously
impeded access to sites.
Energy Optimisation Services generated 43% of total Group
revenues in 2021 (2020: 30%), amounting to GBP29.1 million (2020:
GBP13.9 million), an increase of 109%, all of which was organic.
Energy Optimisation Services contributed adjusted EBITDA of GBP5.0
million having been loss making in 2020 due to the Covid-19
disruption (2020: loss of GBP0.5 million). The optimisation
services division in H1 2021 delivered Adjusted EBITDA margins of
11% reflecting the impact of Covid-19 restrictions on the trading
performance of the division, with the benefits of the investment
made into the division reaped during the second half of the year as
activity levels increased, H2 2021 Adjusted Margins recovered to
22%. As a result, the full year Adjusted EBITDA percentage margin
for 2021 was 17% (2020: -3%). Operating at full capacity,
management's expectation is that the division will consistently
generate Adjusted EBITDA margins of 20%-25%.
Demand for energy optimisation services continues to increase,
with strong underlying drivers, including high commodity prices and
the drive to net-zero.
Software Solutions Division
The Group's Software Solutions Division continues to develop
well with revenues growing organically by 13% to GBP2.4 million
(2020: GBP2.1 million) and generating Adjusted EBITDA of GBP1.8
million (2020: GBP1.4 million), with the division producing a
strong sustainable adjusted EBITDA margin of 74% (2020: 68%).
ESG Solutions Division
The ESG Solutions Division comprises ESG Disclosure Services and
ESG Impact Services.
ESG Solutions generated revenues GBP1.0 million in its first
full year of operation (2020: GBP0.5 million), delivering 96%
growth organically, reflective of the growing market for these
services. The increasing focus of investors and businesses on Net
Zero Carbon targets, combined with mandatory requirements for
businesses to make ESG disclosures from 2022, provides a favourable
backdrop to continue to invest in the strategy for the Inspired ESG
division.
Group results
PLC costs were GBP3.9 million (2020: GBP2.7 million), reflecting
the increased investment in management bandwidth and talent.
Overall, the Group generated Adjusted EBITDA for the year of
GBP19.8 million (2020: GBP12.8 million). After deducting charges
for depreciation, amortisation of internally generated intangible
assets and finance expenditure, the adjusted profit before tax for
the year was GBP13.4 million (2020: GBP6.9 million). The increase
in Adjusted EBITDA was in part offset by an increase in
depreciation and internally generated amortisation. Finance costs
were higher than anticipated, as the Group chose to hold a higher
level of cash and cash equivalents than reduce the balance drawn
under the revolving credit facility with its lenders.
Under IFRS measures the Group reported a profit before tax for
the year of GBP1.9 million (2020: loss of GBP4.5 million), with
reported profit before tax in the year impacted significantly by
substantial charges for the amortisation of intangible assets as a
result of acquisitions, share-based payment charges, fees
associated with acquisitions, restructuring costs and the changes
in the fair value of contingent consideration.
A full reconciliation of the Group's adjusted profit before tax
to its reported profit before tax is included at note 5.
Alternative performance measures
Acquisition activity can significantly distort underlying
financial performance from IFRS measures, the Board therefore,
considers it appropriate to report adjusted metrics, as well as
IFRS measures, for the benefit of primary users of the Group's
financial statements. Reconciliations to Adjusted Profit Before Tax
and Adjusted Fully Diluted EPS can be found in note 5.
Cash generation
Group cash generated from operations during the period was
GBP7.9 million (2020: GBP8.4 million). Excluding non-recurring fees
associated with restructuring costs and deal fees, cash generated
from operations was GBP10.2 million (2020: GBP11.6 million).
-- Energy Assurance Services division generated operating cash
of 80% of Adjusted EBITDA during 2021, being
GBP13.6 million.
-- The acceleration in Energy Optimisation project delivery, in
particular in Q4 2021 which was a record quarter for the divisions,
drove an increase in trade receivables into the year end. As a
result of this working capital cycle in 2021, underlying cash
generated from operations within the division was a cash outflow of
GBP1.0 million, being -11% of the Adjusted EBITDA of the
division.
Trade receivables within the Energy Optimisation Services
division at the yearend were GBP11.0 million, of which 75% has been
collected in Q1 2022 to date. Within the 25% which remains
uncollected in Q1 2022, is an aged balance of GBP2.1 million due
from a major public sector optimisation customer. As noted in the
January trading update, measures remain in place to collect this
balance during H1 2022. Excluding this specific aged balance, 90%+
of the year end optimisation balance has been collected to date in
Q1.
-- Software Solutions Services division - Operating cash of 107%
of Adjusted EBITDA during 2021, being GBP1.9 million.
Overall, following a cash outflow in PLC costs of GBP4.3
million, and minimal cash contribution from ESG Solutions,
underlying cash generated from operations for the period was
GBP10.2 million.
At the time of publishing the 2021 final results, 80% of the
Group trade receivables balance at the 31 December 2021 has been
received to date in Q1 2022, and with the exclusion of the GBP2.1
million aged receivable within the Optimisation Services Division,
90% of the Group trade receivables balance has been recovered in Q1
2022.
Management expects underlying operating cash conversion ratios
from FY2022 onwards to further improve, as the Energy Optimisation
division's trading growth profile stabilises.
During H2 2021, the Group made an accelerated investment in
solutions architecture and CRM, to ensure our platforms can
continue to scale and are interoperable with other systems. This
wasn't repeatable expenditure, with management expecting intangible
spend to return to expected levels in 2022.
The increase in net debt reflects a year in which the cash
generation of the Group was offset by the payment of GBP7.3 million
initial cash consideration for BWS and GEM, and GBP1.1 million of
contingent cash consideration to the vendors of ECM, PCMG and
LSI.
Exceptional costs
Exceptional costs of GBP2.3 million (2020: GBP2.3 million) were
incurred in the year, which includes GBP1.0 million (2020: GBP1.4
million) of deal fees associated with acquisitions completed in the
year.
Restructuring costs of GBP1.2 million (2020: GBP0.9 million)
were incurred in the year, which included GBP0.9 million relating
to restructuring programmes associated with the integration of
businesses acquired prior to 2021 and GBP0.3 million of termination
payments as a result of the disposal of the SME Division.
Change in Fair Value of Contingent Consideration
The fair value of contingent consideration at the balance sheet
date is a judgement of the contingent consideration which will
become payable based on a weighted average range of performance
outcomes of the acquired business during the earn out period, which
is subsequently discounted for the time value of money and
risk.
The Group recognised a GBP4.7 million loss (2020: GBP1.1
million) in the period as a result of changes in the fair value of
contingent consideration which was treated as exceptional. Of the
GBP4.7 million loss, GBP3.0 million relates to the increase in the
liability for contingent consideration payable, of which GBP1.9
million relates to the unwinding of discount rate, with GBP1.0m
representative of the on-going economic recovery post the
significant impact on trading of Covid-19 for Ignite Energy
LTD.
Of the GBP4.7 million loss, GBP1.7 million relates to the
reduction in the expected recovery of the deferred contingent
consideration from the SME disposal completed in December 2020, of
which GBP0.2 million relates to the unwinding of discount rate. The
reduction in expected recovery is reflective of the impact of
failed energy suppliers during the period, most notably CNG, and
the impact of prolonged under consumption and site closures within
the SME portfolio due to Covid-19.
Exceptional costs and changes in fair value of contingent
consideration are considered by the Directors to be material in
nature and non-recurring; they, therefore, merit separate
identification to give a true and fair view of the Group's result
for the period.
Financial position and liquidity
At 31 December 2021, the Group's net debt was GBP32.9 million
(H1 2021: GBP30.17 million - 2020: GBP18.8 million). Cash and cash
equivalents were GBP12.9 million (2020: GBP26.9 million) on hand.
Approximately GBP14.0 million of the Group's GBP60.0 million
Revolving Credit Facility was undrawn, with an additional GBP25.0
million accordion option available to the Group, subject to
covenant compliance.
In March 2021, the Board agreed with their lenders to amend the
definition of Adjusted Net Leverage to apply from the 1 July 2021,
to take account of the impact of the adoption of IFRS 16 and the
re-definition of contingent consideration to only include deferred
consideration or crystallised contingent consideration.
Collectively, these agreed changes significantly reduce the
forecast leverage of the Group for covenant purposes.
On entering the current facility agreement with Santander and
Bank of Ireland in October 2019, the Group had an option to extend
the term of the facility from October 2023 to October 2024. The
Group exercised that option in September 2021, taking the term of
the existing facility to October 2024. Subsequently, the Group has
agreed with the lenders to defer by 12 months the tapering, from
2.50:1.00 to 2.00:1.00, of the Adjusted Net Leverage covenant; this
was due to apply in the quarter ending 31 December 2022, but its
application has now been extended to 31 December 2023, to align
with the extension of the facility.
Dividend
The Board is pleased to propose a final dividend of 0.13 pence
per share (2020: 0.12 pence) in line with the Group's revised
policy of paying dividends covered by at least 3.0x earnings.
The dividend will be payable on 26 July 2022 to all shareholders
on the register on 17 June 2022 and the shares will go ex-dividend
on 16 June 2022.
In summary
The strategic and financial initiatives delivered in the year
have ensured the Group is well placed to deliver the effective
implementation of our strategic growth plan, whilst managing the
additional risks created by the war in Ukraine. The strong growth
of the Group's revenues, and adjusted EBITDA in the year, coupled
with a strengthened platform capable of generating long-term growth
position Inspired well to achieve its long-term financial
goals.
Paul Connor
Chief Financial Officer
29 March 2022
Group statement of comprehensive income
For the year ended 31 December 2021
2021 2020
Note GBP000 GBP000
------------------------------------------------------- ------ -------- --------
Continuing operations
Revenue 67,941 46,110
Cost of sales (17,249) (7,210)
--------------------------------------------------------------- -------- --------
Gross profit 50,692 38,900
Administrative expenses (47,823) (40,723)
--------------------------------------------------------------- -------- --------
Analysed as:
Adjusted EBITDA 19,791 12,767
Exceptional costs [5] (2,318) (2,356)
Change in fair value of contingent consideration (4,735) (1,157)
Depreciation and impairment [6/7] (1,870) (1,173)
Amortisation of acquired intangible assets [8] (4,415) (6,038)
Amortisation and impairment of internally generated
intangible assets [8] (2,554) (2,268)
Share-based payment cost (1,030) (1,598)
--------------------------------------------------------------- -------- --------
Operating profit/(loss) 2,869 (1,823)
Finance expenditure [3] (1,860) (2,678)
Other financial items 105 (35)
--------------------------------------------------------------- -------- --------
Profit/(loss) before income tax [5] 1,114 (4,536)
Income tax (expense)/credit [4] 524 251
------------------------------------------------------- ------ -------- --------
Profit/(loss) for the year from continuing operations 1,638 (4,285)
--------------------------------------------------------------- -------- --------
Profit/(loss) for the year from discontinued
operations - (6,740)
--------------------------------------------------------------- -------- --------
Profit/(loss) for the year 1,638 (11,025)
--------------------------------------------------------------- -------- --------
Attributable to:
Non-controlling interest - 1,448
Equity owners of the company 1,638 (12,473)
--------------------------------------------------------------- -------- --------
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of foreign
operations (753) 364
--------------------------------------------------------------- -------- --------
Total other comprehensive (expense)/income for
the year (753) 364
--------------------------------------------------------------- -------- --------
Total comprehensive expense for the year 885 (10,661)
--------------------------------------------------------------- -------- --------
Total comprehensive expense from continuing
operations 885 (3,921)
--------------------------------------------------------------- -------- --------
Total comprehensive income/(expense) from discontinued
operations - (6,740)
--------------------------------------------------------------- -------- --------
Attributable to:
Non-controlling interest - 1,448
Equity owners of the company 885 (12,109)
--------------------------------------------------------------- -------- --------
Continuing operations
------------------------------------------------------- ------ -------- --------
Basic earnings per share attributable to the
equity holders of the company (pence) [5] 0.17 (0.52)
Diluted earnings per share attributable to the
equity holders of the company (pence) [5] 0.16 (0.52)
------------------------------------------------------- ------ -------- --------
Continuing and discontinued operations
------------------------------------------------------- ------ -------- --------
Basic earnings per share attributable to the
equity holders of the company (pence) [5] 0.17 (1.34)
Diluted earnings per share attributable to the
equity holders of the company (pence) [5] 0.16 (1.34)
------------------------------------------------------- ------ -------- --------
Group statement of financial position
At 31 December 2021
2021 2020
Note GBP000 GBP000
------------------------------------------ -------- --------
ASSETS
Non-current assets
Investments 1,461 898
Goodwill [8] 76,111 63,776
Other intangible assets [8] 18,291 16,351
Property, plant and equipment [6] 2,452 2,322
Right of use assets [7] 2,180 2,593
------------------------------------ ----- -------- --------
Non-current assets 100,495 85,940
------------------------------------------- -------- --------
Current assets
Trade and other receivables [9] 33,448 18,841
Deferred contingent consideration [9] 4,529 6,925
Inventories 300 119
Cash and cash equivalents 12,944 26,884
------------------------------------------- -------- --------
Current assets 51,221 52,769
------------------------------------------- -------- --------
Total assets 151,716 138,709
------------------------------------------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables [10] 12,315 8,230
Lease liabilities 860 992
Contingent consideration 14,586 7,741
Current tax liability 1,823 2,456
------------------------------------------- -------- --------
Current liabilities 29,584 19,419
------------------------------------------- -------- --------
Non-current liabilities
Bank borrowings 45,847 45,730
Lease liabilities 993 1,679
Contingent consideration 7,165 4,198
Interest rate swap 25 130
Deferred tax liability 1,522 1,278
------------------------------------------- -------- --------
Non-current liabilities 55,552 53,015
------------------------------------------- -------- --------
Total liabilities 85,136 72,434
------------------------------------------- -------- --------
Net assets 66,580 66,275
------------------------------------------- -------- --------
EQUITY
Share capital 1,219 1,202
Share premium account 60,923 67,000
Merger relief reserve 20,995 20,995
Share-based payment reserve 6,379 5,349
Retained earnings (11,036) (10,418)
Investment in own shares (36) (6,742)
Translation reserve (481) 272
Reverse acquisition reserve (11,383) (11,383)
------------------------------------------- -------- --------
Equity attributable to shareholders 66,580 66,275
------------------------------------------- -------- --------
Non-controlling interest - -
------------------------------------------- -------- --------
Total equity 66,580 66,275
------------------------------------------- -------- --------
Group statement of changes in equity
For the year ended 31 December 2021
Share-
Share Merger based Investment Reverse Non- Total
Share premium relief payment in own Translation acquisition controlling shareholders'
capital account reserve reserve shares reserve reserve interest equity
Retained
earnings
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- -------- -------- -------- ------- ----------- ------------ ------------ ------------ --------------
Balance at 1
January
2020 (as
restated) 892 37,422 15,535 3,523 6,719 (6,742) (92) (11,383) 13,465 59,339
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
(Loss)/profit
for
the year - - - - (12,473) - - - 1,448 (11,025)
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Other
comprehensive
income for
the year - - - - - - 364 - - 364
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Total
comprehensive
income for
the year - - - - (12,473) - 364 - 1,448 (10,661)
Share-based
payment
cost - - - 1,598 - - - - - 1,598
Shares issued
(2
June 2020) 6 - - - - - - - - 6
Shares issued
(10
July 2020) 89 10,620 - - - - - - - 10,709
Shares issued
(17
July 2020) 40 - 5,460 - - - - - - 5,500
Shares issued
(28
July 2020) 172 18,958 - - - - - - - 19,130
Shares issued
(15
September
2020) 3 - - - - - - - - 3
Acquisition of
subsidiary
undertaking - - - - (3,740) - - - (14,163) (17,903)
Disposal of
subsidiary
undertaking - - - 228 - - - - - 228
Dividends paid - - - - (924) - - - (750) (1,674)
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Total
transactions
with owners 310 29,578 5,460 1,826 (17,137) - 364 - (13,465) 6,936
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Balance at 31
December
2020 1,202 67,000 20,995 5,349 (10,418) (6,742) 272 (11,383) - 66,275
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Profit/(loss)
for
the year - - - - 1,638 - - - - 1,638
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Other
comprehensive
income for
the year - - - - - - (753) - - (753)
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Total
comprehensive
income for
the year - - - - 1,638 - (753) - - 885
Share-based
payment
cost - - - 1,030 - - - - - 1,030
Shares issued
(8
April 2021) 13 376 - - - - - - - 389
Shares issued
(22
June 2021) 1 114 - - - - - - - 115
Shares issued
(28
July 2021) 1 62 - - - - - - - 63
Shares issued
(15
September
2021) 1 53 - - - - - - - 54
Shares issued
(21
December
2021) 1 12 - - - - - - - 13
Shares issued
to
EBT* - (6,694) - - - 6,706 - - - 12
Dividends paid - - - - (2,256) - - - - (2,256)
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Total
transactions
with owners 17 (6,077) - 1,030 (618) 6,706 (753) - - 305
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Balance at 31
December
2021 1,219 60,923 20,995 6,379 (11,036) (36) (481) (11,383) - 66,580
-------------- -------- -------- -------- ------- -------- ----------- ------------ ------------ ------------ --------------
Merger relief reserve
The merger relief reserve represents the premium arising on
shares issued as part or full consideration for acquisitions, where
advantage has been taken of the provisions of section 612 of the
Companies Act 2006.
Reverse acquisition reserve
The reverse acquisition reserve relates to the reverse
acquisition between Inspired Energy Solutions Limited and Inspired
PLC on 28 November 2011 and arises on consolidation.
Translation reserve
The translation reserve comprises translation differences
arising from the translation of the financial statements of the
Group's foreign entities into GBP (GBP).
Share-based payment reserve
The share-based payment reserve is a reserve to recognise those
amounts in equity in respect of share-based payments.
Non-controlling interest
The non-controlling interest represented the outstanding 60% of
the issued share capital of Ignite Energy LTD (IGN) held by third
parties. IGN was consolidated and treated as a subsidiary in 2019
as the Group had an exclusive one-way call option to acquire the
outstanding 60% of the issued share capital. The Directors
recognised a non-controlling interest as the Share Purchase
Agreement (SPA) was structured in such a way that the Group was
deemed to have substantive control. On 17 July 2020, IGN became
100% owned and as such a non-controlling interest was no longer
held.
Group statement of cash flows
For the year ended 31 December 2021
2021 2020
GBP000 GBP000
------------------------------------------------------ -------- --------
Cash flows from operating activities
Profit/(loss) before income tax 1,114 (11,276)
Adjustments
Depreciation and impairment 1,870 1,173
Amortisation and impairment 6,969 8,306
Share-based payment cost 1,030 1,598
Loss for the year from discontinued operations - 6,740
Finance expenditure 1,755 2,678
Exchange rate variances 266 (323)
Change in fair value of contingent consideration 4,735 1,157
------------------------------------------------------ -------- --------
Cash flows before changes in working capital 17,739 10,053
Movement in working capital
Increase in inventories (180) (43)
(Increase)/decrease in trade and other receivables (9,841) 154
Dividends declared to NCI - (900)
Increase/(decrease) in trade and other payables 185 (925)
------------------------------------------------------ -------- --------
Cash generated from operations 7,903 8,339
Income taxes paid (869) (2,222)
------------------------------------------------------ -------- --------
Net cash flows from operating activities 7,034 6,117
------------------------------------------------------ -------- --------
Cash flows from investing activities
Contingent consideration paid (1,086) (3,800)
Acquisition of subsidiaries, net of cash acquired (7,268) (5,866)
Provision of working capital facility to discontinued
operation (500) (250)
Payments to acquire property, plant and equipment (998) (1,925)
Payments to acquire intangible assets (5,866) (3,716)
------------------------------------------------------ -------- --------
Net cash flows used in investing activities (15,718) (15,557)
------------------------------------------------------ -------- --------
Cash flows from financing activities
New bank loans - 7,000
Proceeds from issue of new shares 645 29,848
Interest on financing activities (2,069) (2,273)
Repayment of lease liabilities (1,443) (918)
Dividends paid to NCI - (1,650)
Dividends paid (2,256) (924)
------------------------------------------------------ -------- --------
Net cash flows from financing activities (5,123) 31,083
------------------------------------------------------ -------- --------
Net (decrease)/increase in cash and cash equivalents (13,807) 21,643
Cash and cash equivalents brought forward 26,884 5,241
Exchange differences on cash and cash equivalents (83) -
------------------------------------------------------ -------- --------
Cash and cash equivalents carried forward 12,994 26,884
------------------------------------------------------ -------- --------
Notes to Final Results
Statement of compliance
These Condensed Consolidated Financial Statements do not
constitute statutory financial statements within the meaning of
Section 434 of the Companies Act 2006 for the financial year ended
31 December 2021 but has been extracted from those financial
statements. The annual financial statements for the year ended 31
December 2021 have been prepared in accordance with UK adopted
International Accounting Standards. These Condensed Consolidated
Financial Statements do not include all the disclosures required in
financial statements prepared in accordance with UK adopted
International Accounting Standards and accordingly do not
themselves comply with UK adopted International Accounting
Standards.
The financial information for the period ended 31 December 2020
is derived from the statutory accounts for that year which have
been delivered to the Registrar of Companies. The statutory
accounts for the year ended 31 December 2021 will be delivered to
the Registrar of Companies following the Company's annual general
meeting. The auditors have reported on the financial statements for
the years ended 31 December 2020 and 2021; their reports were
unqualified, did not include any matters to which the auditor drew
attention by way of emphasis and did not contain a statement under
s498(2) or s498(3) of the Companies Act 2006.
The Board of directors approved the Condensed Consolidated
Financial Statements on 29 March 2021.
The Consolidated Financial Statements of the Group as at and for
the year ended 31 December 2021 (2021 Annual Report) are available
upon request from the Company Secretary, Inspired Energy plc, 29
Progress Park, Orders Lane, Kirkham, Lancashire, PR4 2TZ.
The principal accounting policies applied in the preparation of
the Group financial statements are set out below.
1. Basis of preparation
The Group financial statements have been prepared in accordance
with the Companies Act 2006 and UK adopted International Financial
Reporting Standards. They have been prepared on an accrual basis
and under the historical cost convention except for certain
financial instruments measured at fair value.
The Group has taken advantage of the audit exemption for
twenty-three of its subsidiaries, Independent Utilities Limited
(company number 05658810), LSI Independent Utility Brokers Limited
(04072919), Energy and Carbon Management Holdings Limited
(09974219), Energy Team (UK) Limited (06285279), Energy Team
(Midlands) Ltd (02913371), UES Energy Group Ltd (07741114), UES
Holdings Ltd (06903390), Waterwatch UK Limited (08854844),
Wholesale Power UK Limited (02717985), Informed Business Solutions
Limited (04943661), Inspired Energy EBT Limited (10807501), Energy
Broker Solutions Limited (07355726), BWS Holdco Limited (13027713),
Direct Energy Purchasing Limited (03529303), Utility Management
Holdings Limited (06969480), Churchcom Limited (05343736), Flexible
Energy Management Limited (10264309), Inspired 4U Limited
(08895906), Squareone Enterprises Limited (05261796), Energy Cost
Management Limited (03377082), STC Energy Management Limited
(03094427), Inprova Finance Ltd (07371389) and Professional Cost
Management Group Limited (06511368) by virtue of s479A of the
Companies Act 2006. The Group has provided parent guarantees to
these twenty-three subsidiaries which have taken advantage of the
exemption from audit.
Going concern
For the purposes of assessing the appropriateness of preparing
the Group's accounts on a going concern basis, the Directors have
considered the current cash position, available banking facilities
and the Group's base case financial forecast through to 31 December
2023, including the ability to adhere to banking covenants.
The Directors believe the Group has a strong balance sheet
position, having refinanced its banking facilities in October 2019
through to October 2023. Furthermore, on entering the current
facility agreement with Santander and Bank of Ireland in October
2019, the Group had an option to extend the term of the facility
from October 2023 to October 2024. The Group exercised that option
in September 2021, taking the term of the existing facility to
October 2024.
At 31 December 2022 the Group's net debt was GBP32.9 million,
increasing from GBP18.8 million at 31 December 2020. In addition to
cash and cash equivalents of GBP12.9 million on hand as at 31
December 2021, approximately GBP14.0 million of the Group's GBP60.0
million Revolving Credit Facility is undrawn with an additional
GBP25.0 million accordion option available, subject to covenant
compliance. The facility is subject to two covenants, which are
tested quarterly, adjusted leverage to Adjusted EBITDA and Adjusted
EBITDA to net finance charges. Following the onset of the Covid-19
pandemic in March 2020, the Group agreed with its banking partners
in May 2020 a resetting of the adjusted leverage covenant for
quarters ending 30 June 2020 through to 30 June 2021.
In March 2021, the Board agreed with their lenders to amend the
definition of Adjusted Net Leverage to apply from 1 July 2021, to
reverse the impact of the adoptions of IFRS 16 and the definition
of contingent consideration to only included deferred consideration
or crystallised contingent consideration. Collectively, these
changes reduce the Net Adjusted Leverage of the Group and
significantly increased the headroom available to the Group from a
covenant perspective.
Furthermore, subsequent to the year end, the Group has agreed
with the lenders to defer the tapering of the Adjusted Net Leverage
covenant from 2.50:1.00 to 2.00:1.00, which was due to commence in
the quarter ending 31 December 2022 for 12 months to 31 December
2023 to align with the extension of the facility.
The future likely impact on the Group of the Covid-19 pandemic
has been considered as part of the consideration of the going
concern basis of preparation, and the Board is comfortable that the
base case represents the Group returning to a business as usual
status.
Noting the impacts of the war in the Ukraine and the resulting
volatility and uncertainty across commodity and energy markets,
from a going concern perspective, the Group considered a number of
scenarios in relation to Gazprom Marketing and Trading Retail
Limited ceasing trading in the UK, from the whom the Group are
forecast to collect revenue from during 2022 and 2023. The Board is
comfortable that in a severe scenario, the Group would have
sufficient headroom under its banking covenants.
Therefore, the Directors believe that the Group is well placed
to manage its business risks and, after making enquiries including
a review of forecasts and scenarios, taking account of the
potential impact of the macroeconomic uncertainty created by the
war in Ukraine, reasonably possible changes in trading performances
in the next twelve months and considering the available liquidity,
including banking facilities, have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the next twelve months following the date of approval
of these financial statements. Therefore, the Directors continue to
adopt the going concern basis of accounting in preparing the
financial statements.
2. Segmental information
Revenue and segmental reporting
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Group's Executive Directors.
Operating segments for the year to 31 December 2021 were determined
on the basis of the reporting presented at regular Board meetings
of the Group. The segments comprise:
Assurance Division
Key services provided are the review, analysis and negotiation
of gas and electricity contracts on behalf of clients in the UK and
ROI. To access this market we have a professional bid response
team, direct field sales team, and partnership channel.
Optimisation Division
This division focuses on the optimisation of a client's energy
consumption. Services provided include forensic
audits, energy efficiency projects and water solutions.
Software Division
This division comprises the provision of energy management
software to third parties.
ESG Division
Within this division the Group manages the data collection and
validation of consumption data to provide the resources for the
creation of mandatory ESG disclosures, such as Streamlined Energy
and Carbon Reporting
(SECR) and Taskforce on Climate-related Financial Disclosure (TCFD) reporting.
PLC costs
This comprises the costs of running the PLC, incorporating the
cost of the Board, listing costs and other professional service
costs, such as audit, tax, legal and Group insurance.
Any charges between segments are made in line with the Group's
transfer pricing policy. These amounts have been removed, via
consolidation, for the purposes of the information shown below.
Prior to 2021, the Group reported under three segments, namely
the SME Division, the Corporate Division and PLC costs. These
divisions were derived according to the nature and size of the
customer and the level of procurement advice provided. Following
the disposal of the SME Division in December 2020, the Board were
presented with a more granular view of the Corporate Division
driven by the evolution of the service offerings which has resulted
in the following reportable segments being disclosed: Assurance,
Optimisation, Software, ESG and PLC.
2021 2020
------------------------------------------------------------- ------------------------------------------------------------
Assurance Optimisation Software ESG PLC Total Assurance Optimisation Software ESG PLC Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
Revenue 35,521 29,059 2,395 966 - 67,941 29,608 13,892 2,117 493 - 46,110
Cost of sales (2,856) (14,328) (65) - - (17,249) (1,696) (5,467) (47) - - (7,210)
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
Gross profit 32,665 14,731 2,330 966 - 50,692 27,912 8,425 2,070 493 - 38,900
Administrative
expenses (16,407) (9,852) (608) (935) (11,182) (38,984) (14,209) (8,916) (634) (400) (7,085) (31,244)
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
EBITDA 16,258 4,879 1,722 31 (11,182) 11,708 13,703 (491) 1,436 93 (7,085) 7,656
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
Analysed as:
Adjusted EBITDA 17,015 4,961 1,770 31 (3,986) 19,791 14,336 (465) 1,436 93 (2,633) 12,767
Share-based
payment
cost - - - - (1,030) (1,030) - - - - (1,598) (1,598)
Exceptional
costs (757) (82) (48) - (1,431) (2,318) (633) (26) - - (1,697) (2,356)
Change in fair
value of
contingent
consideration - - - - (4,735) (4,735) - - - - (1,157) (1,157)
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
16,258 4,879 1,722 31 (11,182) 11,708 13,703 (491) 1,436 93 (7,085) 7,656
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
Depreciation
and impairment (1,870) (1,173)
Amortisation
and impairment (6,969) (8,306)
Finance
expenditure (1,860) (2,678)
Other financial
items 105 (35)
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
Profit/(loss)
before income
tax 1,114 (4,536)
--------------- --------- ------------ -------- ------ -------- -------- --------- ------------ -------- ------ ------- --------
3. Finance expenditure
2021 2020
GBP000 GBP000
-------------------------------------- ------ ------
Interest payable on bank borrowings 1,485 1,766
Interest payable on lease liabilities 177 288
Foreign exchange variance (325) 253
Other interest 46 30
Loan facility fees 361 225
Amortisation of debt issue costs 116 116
-------------------------------------- ------ ------
1,860 2,678
-------------------------------------- ------ ------
4. Income tax (credit)/expense
The income tax (credit)/expense is based on the (loss)/profit
for the year and comprises:
2021 2020
GBP000 GBP000
-------------------------------------------------------------------- ------- -------
Current tax
Current tax expense 1,756 575
Adjustments in respect of prior years (1,739) (826)
-------------------------------------------------------------------- ------- -------
17 575
-------------------------------------------------------------------- ------- -------
Deferred tax
Origination and reversal of temporary differences (542) (826)
-------------------------------------------------------------------- ------- -------
(542) (826)
-------------------------------------------------------------------- ------- -------
Total income tax (credit)/expense (525) (251)
-------------------------------------------------------------------- ------- -------
Reconciliation of tax (credit)/expense to accounting (loss)/profit:
(Loss)/profit on ordinary activities before taxation 1,114 (4,536)
-------------------------------------------------------------------- ------- -------
Tax at UK income tax rate of 19% (2019: 19%) 212 (862)
Disallowable expenses 1,141 501
Exchange rate difference (112) (145)
Share options (820) 164
Effects of current year events on prior year balances (1,739) -
Movement in deferred tax asset not recognised (201) (271)
Adjust closing deferred tax to reflect change in tax rate 645 -
Non-eligible intangible assets 349 362
-------------------------------------------------------------------- ------- -------
Total income tax (credit)/expense (525) (251)
-------------------------------------------------------------------- ------- -------
5. Earnings per share
The basic earnings per share is based on the net profit for the
year attributable to ordinary equity holders divided by the
weighted average number of ordinary shares outstanding during the
year.
2021 2020
GBP000 GBP000
---------------------------------------------------------- --------- --------
(Loss)/profit attributable to equity holders of the Group 1,638 (11,025)
Fees associated with acquisition 1,038 1,366
Restructuring costs 1,280 990
Changes in fair value of contingent consideration 4,735 1,157
Loss on disposal of subsidiary entities - 6,740
Amortisation of acquired intangible assets 4,415 6,038
Foreign exchange variance (339) 253
Deferred tax in respect of amortisation of intangible
assets (783) (1,025)
Impairment of right of use assets 113 -
Share-based payment cost 1,030 1,598
---------------------------------------------------------- --------- --------
Adjusted profit attributable to owners of the Group 13,127 6,092
---------------------------------------------------------- --------- --------
Weighted average number of ordinary shares in issue (000) 970,589 824,647
Dilutive effect of share options (000) 40,870 49,107
---------------------------------------------------------- --------- --------
Diluted weighted average number of ordinary shares in
issue (000) 1,011,459 873,754
---------------------------------------------------------- --------- --------
Basic earnings per share (pence) 0.17 (1.34)
Diluted earnings per share (pence) 0.16 (1.34)
Adjusted basic earnings per share (pence) 1.35 0.74
Adjusted diluted earnings per share (pence) 1.30 0.70
---------------------------------------------------------- --------- --------
2021 2020
GBP000 GBP000
----------------------------------------------------------------- --------- --------
(Loss)/profit attributable to equity holders of the Group 1,638 (11,025)
Loss/(profit) from discontinued operations - 6,740
----------------------------------------------------------------- --------- --------
Underlying (loss)/profit from continuing operations attributable
to equity holders of the Group 1,638 (4,285)
----------------------------------------------------------------- --------- --------
Weighted average number of ordinary shares in issue (000) 970,589 824,647
Dilutive effect of share options (000) 40,870 49,107
----------------------------------------------------------------- --------- --------
Diluted weighted average number of ordinary shares in
issue (000) 1,011,459 873,754
----------------------------------------------------------------- --------- --------
Basic earnings per share from continuing operations (pence) 0.17 (0.52)
Diluted earnings per share from continuing operations
(pence) 0.16 (0.52)
----------------------------------------------------------------- --------- --------
The weighted average number of shares in issue for the adjusted
diluted earnings per share includes the dilutive effect of the
share options in issue to senior staff of the Group.
Adjusted earnings per share represents the earnings per share,
as adjusted to remove the effect of fees associated with
acquisitions, restructuring costs, the amortisation of intangible
assets (excluding internally generated amortisation related to
computer software and customer databases), exceptional items and
share-based payment costs which have been expensed to the Group
statement of comprehensive income in the year, the unwinding of
contingent consideration and foreign exchange variances. The
adjustments to earnings per share have been disclosed to give a
clear understanding of the Group's underlying trading
performance.
Adjusted profit before tax on continuing operations is
calculated as follows:
2021 2020
GBP000 GBP000
--------------------------------------------------- ------ -------
(Loss)/profit before income tax 1,114 (4,536)
Share-based payment cost 1,030 1,598
Amortisation of acquired intangible assets 4,415 6,038
Foreign exchange variance (339) 253
Exceptional costs:
- fees associated with acquisition 1,038 1,366
- restructuring cost 1,280 990
- Impairment of right of use assets 113 -
- change in fair value of contingent consideration 4,735 1,157
--------------------------------------------------- ------ -------
13,386 6,866
--------------------------------------------------- ------ -------
Acquisitional activity can significantly distort underlying
financial performance from IFRS measures and therefore the Board
deems it appropriate to report adjusted metrics as well as IFRS
measures for the benefit of primary users of the Group financial
statements.
6. Property, plant and equipment
Fixtures
and Motor Computer Leasehold
fittings vehicles equipment improvements Total
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------------- -------- -------- --------- ------------ -------
Cost
At 1 January 2020 843 141 2,683 1,047 4,714
Acquisitions through business combinations 22 - - - 22
Assets transferred to disposal group (12) - (11) (17) (40)
Assets transferred to intangible
assets - - (1,338) - (1,338)
Foreign exchange variances - 3 1 1 5
Additions 200 29 1,624 72 1,925
Disposals (116) (15) (547) (511) (1,189)
------------------------------------------- -------- -------- --------- ------------ -------
At 31 December 2020 937 158 2,412 592 4,099
Acquisitions through business combinations - - - 222 222
Foreign exchange variances (4) (5) (11) (5) (25)
Additions 15 - 981 2 998
Disposals (228) (46) (378) (5) (657)
------------------------------------------- -------- -------- --------- ------------ -------
At 31 December 2021 720 107 3,004 806 4,637
------------------------------------------- -------- -------- --------- ------------ -------
Depreciation
At 1 January 2020 617 60 1,097 256 2,030
Charge for the year 221 21 75 254 571
Charge for the year transferred to
intangible assets - - (380) - (380)
Assets transferred to disposal group (10) - (10) (8) (28)
Disposals 85 11 (144) (176) (416)
------------------------------------------- -------- -------- --------- ------------ -------
At 31 December 2020 743 70 638 326 1,777
Charge for the year 88 4 604 120 816
Disposals (167) (36) (200) (5) (408)
------------------------------------------- -------- -------- --------- ------------ -------
At 31 December 2021 664 38 1,042 441 2,185
------------------------------------------- -------- -------- --------- ------------ -------
Net book value
At 31 December 2021 56 69 1,962 365 2,452
------------------------------------------- -------- -------- --------- ------------ -------
At 31 December 2020 194 88 1,774 266 2,322
------------------------------------------- -------- -------- --------- ------------ -------
At 31 December 2019 226 81 1,586 791 2,684
------------------------------------------- -------- -------- --------- ------------ -------
7. Right of use assets
Fixtures Motor
and fittings vehicles Property Total
GBP000 GBP000 GBP000 GBP000
------------------------------------------- ------------ -------- -------- --------
Cost
At 1 January 2020 472 319 3,869 4,660
Acquisitions through business combinations - - 156 156
Remeasurement of Finance lease - - (347) (347)
Assets transferred to disposal group - (66) - (66)
Additions 23 225 - 248
Disposals (5) (164) (352) (521)
------------------------------------------- ------------ -------- -------- --------
At 31 December 2020 490 314 3,326 4,130
------------------------------------------- ------------ -------- -------- --------
Acquisitions through business combinations - 4 44 48
Remeasurement of finance lease - - (17) (17)
Additions 133 106 386 625
Disposals - (71) (50) (121)
-------------------------------------------- ------------ -------- -------- ------
At 31 December 2021 623 353 3,689 4,665
------------------------------------------- ------------ -------- -------- --------
Depreciation
At 1 January 2020 69 103 778 950
Charge for the year 69 125 788 982
Assets transferred to disposal group - (56) - (56)
Disposals - (86) (253) (339)
------------------------------------------- ------------ -------- -------- --------
At 31 December 2020 138 86 1,313 1,537
------------------------------------------- ------------ -------- -------- --------
Charge for the year 144 116 681 941
Disposals - (56) (50) (106)
------------------------------------------- ------------ -------- -------- --------
At 31 December 2021 282 146 1,944 2,372
------------------------------------------- ------------ -------- -------- --------
Impairment
At 1 January 2021 - - - -
Charge for the year - - 113 113
------------------------------------------- ------------ -------- -------- --------
At 31 December 2021 - - 113 113
------------------------------------------- ------------ -------- -------- --------
Net book value
At 31 December 2021 341 207 1,632 2,180
------------------------------------------- ------------ -------- -------- --------
At 31 December 2020 352 228 2,013 2,593
------------------------------------------- ------------ -------- -------- --------
The impairment during the year of GBP113,000 relates to vacation
of property and early exit of a lease.
8. Intangible assets and goodwill
Total
Computer Customer Customer Customer other
Trade Goodwill
software name databases contracts relationships intangibles (as restated) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
Cost
At 1 January 2020 11,945 115 1,654 17,210 7,511 38,435 61,627 100,062
Additions 3,615 - 101 - - 3,716 - 3,716
Acquisitions through
business combinations 37 - - 583 - 620 3,241 3,861
Transfer from property,
plant and equipment 1,338 - - - - 1,338 - 1,338
Impairment (188) - - - - (188) - (188)
Assets transferred
to disposal group (432) - (1,755) - - (2,187) (1,208) (3,395)
Foreign exchange
variances - - - 283 - 283 116 399
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
At 31 December 2020 16,315 115 - 18,076 7,511 42,017 63,776 105,793
Additions 5,821 45 - - - 5,866 - 5,866
Acquisitions through
business combinations - - - 3,491 - 3,491 12,494 15,985
Adjustments to previous
business combinations - - - 8 - 8 - 8
Disposals (819) - - - - (819) - (819)
Foreign exchange
variances - - - - - - (159) (159)
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
At 31 December 2021 21,317 160 - 21,575 7,511 50,563 76,111 126,674
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
Amortisation
At 1 January 2020 5,983 24 1,571 9,560 2,410 19,548 - 19,548
Charge for the year 2,895 6 - 4,022 815 7,738 - 7,738
Charge for the year
transferred from
property,
plant and equipment 380 - - - - 380 - 380
Assets transferred
to disposal group (429) - (1,571) - - (2,000) - (2,000)
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
At 31 December 2020 8,829 30 - 13,582 3,225 25,666 - 25,666
Charge for the year 2,933 7 - 3,214 815 6,969 - 6,969
Disposals (363) - - - - (363) - (363)
At 31 December 2021 11,399 37 - 16,796 4,040 32,272 - 32,272
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
Net book value
At 31 December 2021 9,918 123 - 4,779 3,471 18,291 76,111 94,402
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
At 31 December 2020 7,486 85 - 4,494 4,286 16,351 63,776 80,127
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
At 31 December 2019 5,962 91 83 7,650 5,101 18,887 61,627 80,514
------------------------ -------- ------ --------- --------- ------------- ------------ -------------- -------
Computer software is a combination of assets internally
generated, and assets acquired through business combinations. The
amortisation charge in the period to 31 December 2021 associated
with computer software acquired through business combinations is
GBP381,000 (2020: GBP1,195,000). The additional GBP2,552,000 (2020:
GBP2,080,000) charged in the period relates to the amortisation of
internally generated computer software. The total amortisation
charged in the period to 31 December 2021 associated with
intangible assets acquired through business combinations is
GBP4,415,000 (2020: GBP6,038,000). Amortisation is charged to
administrative expenses for both financial years.
9. Trade and other receivables
Group
--------------
2021 2020
GBP000 GBP000
---------------------------------- ------ ------
Trade receivables 16,492 6,995
Other receivables 1,472 297
Deferred contingent consideration 4,529 6,925
Prepayments 3,802 2,764
Accrued income 11,682 8,785
---------------------------------- ------ ------
37,997 25,766
---------------------------------- ------ ------
Deferred contingent consideration relates to the collection and
run off of the SME Division's accrued income balance at
disposal.
The Group does not hold any collateral as security (2020: none).
Group debtor days were 74 days (31 December 2020: 46 days).
The ageing of trade receivables was as follows (GBP000):
within
30 31-60 61-90
days days days Older Total
----------------- ------ ----- ----- ----- ------
31 December 2021 10,951 2,169 1,592 1,780 16,492
------------------ ------ ----- ----- ----- ------
31 December 2020 4,314 1,065 595 1,021 6,995
------------------ ------ ----- ----- ----- ------
10. Trade and other payables
Group
--------------
2021 2020
GBP000 GBP000
-------------------------------- ------ ------
Current
Trade payables 4,154 1,943
Social security and other taxes 3,504 4,162
Accruals 1,502 866
Deferred income 1,268 745
Other payables 1,887 514
-------------------------------- ------ ------
12,315 8,230
-------------------------------- ------ ------
11. Business combinations
Businesswise Solutions Limited (BWS)
On 3 March 2021, the Group acquired 100% of the issued share
capital and voting rights of BWS, a company based in the United
Kingdom. BWS provides assurance services and incremental
optimisation services to its corporate customer bases across a
range of sectors complementing the services already provided by the
Group.
The acquisition of BWS was completed for a total consideration
of up to GBP14,045,000. The initial GBP6,562,000 was satisfied in
cash. The additional GBP7,483,000 comprises several tranches as
follows: of the aggregate GBP23,500,000, contingent consideration
may become payable in cash.
The fair value of the contingent consideration of GBP7,483,000
was estimated by calculating the present value of the future cash
flows and discounted using a rate of 15%.
The details of the business combination are as follows:
Recognised amounts of identifiable net assets
Provisional
Book fair value Provisional
value adjustment fair value
GBP000 GBP000 GBP000
----------------------------------------------------- ------ ----------- -----------
Property, plant and equipment 222 - 222
Intangible assets 431 2,561 2,992
Trade and other receivables 785 - 785
Cash and cash equivalents 1,302 - 1,302
----------------------------------------------------- ------ ----------- -----------
Total assets 2,740 2,561 5,301
----------------------------------------------------- ------ ----------- -----------
Trade and other payables 1,175 - 1,175
Current tax liability 119 - 119
Deferred tax liability 122 568 690
----------------------------------------------------- ------ ----------- -----------
Total liabilities 1,416 568 1,984
----------------------------------------------------- ------ ----------- -----------
Provisional fair value of identifiable net assets 3,317
Provisional goodwill 10,728
----------------------------------------------------- ------ ----------- -----------
Fair value of consideration transferred 14,045
----------------------------------------------------- ------ ----------- -----------
Satisfied by:
- cash consideration paid 6,562
- contingent consideration 7,483
----------------------------------------------------- ------ ----------- -----------
14,045
----------------------------------------------------- ------ ----------- -----------
Net cash outflow arising from business combinations:
- cash consideration paid 6,562
- cash and cash equivalents acquired (1,302)
----------------------------------------------------- ------ ----------- -----------
Net cash outflow 5,260
----------------------------------------------------- ------ ----------- -----------
Trade and other receivables included GBP275,000 of gross trade
receivables.
Goodwill
The goodwill arising on this acquisition is attributable to
niche market expertise enabling cross-selling opportunities
achieved from combining the acquired customer bases and trade with
the existing Group.
Identifiable net assets
A provisional fair value exercise to determine the fair value of
assets and liabilities acquired in relation to BWS has been carried
out. Fair values are provisional as they are still within the
twelve-month hindsight period to adjust fair values.
The fair value of the customer contracts included within
intangible assets was calculated to be GBP2,992,000.
The Group estimates costs incurred in relation to the
transaction to be GBP320,000. These costs are included within
exceptional costs in the Group statement of comprehensive income
and included within operating activities in the Group statement of
cash flows.
General Energy Management Limited (GEM)
On 3 March 2021, the Group acquired 100% of the issued share
capital and voting rights of GEM, a company based in the United
Kingdom. GEM provides assurance services to its corporate customer
base across a range of sectors, complementing the services already
provided by the Group.
The acquisition of GEM was completed for a total consideration
of up to GBP2,471,000. The initial GBP2,008,000 was satisfied in
cash. The additional GBP463,000 comprises of two tranches as
follows. Of the aggregate contingent consideration GBP500,000, the
first tranche of GBP250,000 was settled in January 2022. The second
tranche of up to GBP250,000 is payable based on achieving a target
level of GBP250,000 of contracted future revenues.
The fair value of the contingent consideration of GBP463,000 was
estimated by calculating the present value of the future cash flows
and discounted using a rate of 16%.
The details of the business combination are as follows:
Recognised amounts of identifiable net assets
Provisional
Book fair value Provisional
value adjustment fair value
GBP000 GBP000 GBP000
----------------------------------------------------- ------ ----------- -----------
Intangible assets - 506 506
Trade and other receivables 234 - 234
Cash and cash equivalents 368 - 368
----------------------------------------------------- ------ ----------- -----------
Total assets 602 506 1,108
----------------------------------------------------- ------ ----------- -----------
Trade and other payables 98 - 99
Current tax liability 58 - 58
Deferred tax liability 1 96 97
----------------------------------------------------- ------ ----------- -----------
Total liabilities 157 96 254
----------------------------------------------------- ------ ----------- -----------
Provisional fair value of identifiable net assets 854
Provisional goodwill 1,617
----------------------------------------------------- ------ ----------- -----------
Fair value of consideration transferred 2,471
----------------------------------------------------- ------ ----------- -----------
Satisfied by:
- cash consideration paid 2,008
- contingent consideration 463
----------------------------------------------------- ------ ----------- -----------
2,471
----------------------------------------------------- ------ ----------- -----------
Net cash outflow arising from business combinations:
- cash consideration paid 2,008
- cash and cash equivalents acquired (368)
----------------------------------------------------- ------ ----------- -----------
Net cash outflow 1,640
----------------------------------------------------- ------ ----------- -----------
Trade and other receivables included GBP41,000 of gross trade
receivables.
Goodwill
The goodwill arising on this acquisition is attributable to
niche market expertise enabling cross-selling opportunities
achieved from combining the acquired customer bases and trade with
the existing Group.
Identifiable net assets
A provisional fair value exercise to determine the fair value of
assets and liabilities acquired in relation to GEM has been carried
out. Fair values are provisional as they are still within the
twelve-month hindsight period to adjust fair values.
The fair value of the customer contracts included within
intangible assets was calculated to be GBP506,000.
The Group estimates costs incurred in relation to the
transaction to be GBP61,000. These costs are included within
exceptional costs in the Group statement of comprehensive income
and included within operating activities in the Group statement of
cash flows.
A reconciliation of acquisition of subsidiaries, net of cash
acquired is as follows:
GBP000
-------------------------------------------------- ------
BWS- net cash outflow (per above) 5,260
GEM - net cash outflow (per above) 1,640
Investment in Zestec Asset Management Limited 250
Investment in Switchd Ltd 118
-------------------------------------------------- ------
Acquisition of subsidiaries, net of cash acquired 7,268
-------------------------------------------------- ------
12. Post-balance sheet events
On 28 February 2022, the Group acquired 100% of the issued share
capital and voting rights of I-Prophets Compliance Limited and
Digital Energy Limited, for aggregate consideration of GBP600,000.
I-Prophets Compliance Limited and Digital Energy Limited were two
trading subsidiaries of Information Prophets Limited, with whom the
Group carried an investment value at 31 December 2021.
The option to buy the remaining subsidiaries of Information
Prophets Limited still exists, however, as part of the transaction
to acquire I-Prophets Compliance Limited and Digital Energy
Limited, the option to acquire Information Prophets Limited the
Group entered in 2019 was amended to reflect the Group acquiring
two of the trading subsidiaries of Information Prophets Limited.
The Group has not given full disclosure of the fair value at
acquisition as it was considered impractical to do so within the
reporting timeframe.
On 31 January 2022, Inspired PLC sold its investment in Zestec
Asset Management Limited for GBP324,000, realising a profit on
disposal.
Following the Russian invasion of Ukraine on 24 February 2022,
the Group have assessed the potential impact on the Group balance
sheet at 31 December 2021 of Gazprom Marketing and Trading Retail
Limited ("Gazprom"), a subsidiary of the Gazprom Group, a Russian
majority state-owned multinational energy corporation, ceasing to
trade in the UK. Following the year end, the working capital cycle
of receipts from Gazprom has remained unchanged and as a result,
the Group's current exposure to non-recovery of the trade
receivables and accrued income balances in relation to Gazprom,
which were outstanding at 31 December 2021, is considered to be
immaterial.
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END
FR JMMATMTTJMMT
(END) Dow Jones Newswires
March 30, 2022 02:00 ET (06:00 GMT)
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