TIDMEAAS
RNS Number : 9115E
eEnergy Group PLC
16 March 2022
16 March 2022
eEnergy Group plc
("eEnergy" or "the Group")
Results for the six months ended 31 December 2021
eEnergy Group plc (AIM: EAAS), the digital energy services
company, is pleased to announce its interim results for the six
months ended 31 December 2021.
Financial Highlights for the six months ended 31 December
2021:
-- Revenue for the enlarged Group up 42% to GBP9.6 million (H1 FY21: GBP6.8 million).
-- Energy Management revenue increased to GBP4.8 million (H1
FY21: GBP0.2 million) through underlying annualised growth of 25%,
the inclusion of Beond for the full period and the acquisition of
UtilityTeam in September 2021.
-- Energy Efficiency revenue of GBP4.8 million was stable with
H2 FY21 but down 28% on H1 FY21 (GBP6.6 million), primarily as a
result of the catch up effect in H1 FY21 of projects delayed from
the first Covid lockdown.
-- Group gross margin increased in the period to 57.6 % (H1
FY21: 38.2%) due to the change in sales mix towards Energy
Management.
-- Adjusted EBITDA(1) up 117% to GBP0.8 million (H1 FY21: GBP0.4 million).
-- Profit before exceptional items(2) of GBP0.2 million (H1 FY21 GBP0.1 million).
-- Cash at bank GBP2.6 million (30 June 2021: GBP3.3 million)
and net debt (including IFRS 16 lease liabilities) of GBP1.1
million (30 June 2021: net cash GBP0.8 million).
Operational Highlights:
-- Successful integration of Beond and advanced integration of
UtilityTeam, both performing ahead of management's
expectations.
-- Increased stake in MY ZeERO from 37.5% to 51% following the
successful completion of specific development milestones.
-- Contracted forward revenue(3) increased 205% to GBP18.3
million (31 December 2020: GBP6.0 million).
-- Accelerating pipeline for Energy Efficiency projects - higher
value of investment grade proposals(4) issued in H1 FY22 than in
the whole of FY21.
-- Now ranked as a Top 5 Energy Management provider in the UK by Cornwall Insight.
-- Delivered the first integrated onsite solar generation and lighting replacement project
-- Secured and installed the first standalone energy data and
insights contract for a multi academy trust.
-- 108 LED lighting installations completed at schools and
businesses in the UK & Ireland in H1 FY22 (H1 FY21: 111).
-- 132 MY ZeERO eMeters installed and a further 260 installed or
awaiting installation at 28 February 2022.
Highlights post period end
-- Successfully refinanced all our secured debt with Silicon
Valley Bank in February 2022. The GBP5 million revolving credit
facility is at a significantly lower average cost of finance and
provides much more flexibility.
-- The Company is now able to provide its clients with onsite
solar generation and intends to add electric vehicle charging
solutions to its offering by the end of FY22.
Full year outlook
-- The Group has a growing pipeline of opportunities, which is
expected to generate incremental revenue in H2 FY22.
-- There are clearly risks outside of the Group's control,
including challenges to contracting new energy supply contracts in
the current market environment and timing of customer decisions on
Energy Efficiency contracts and installations . However, on
balance, and given the full period contribution from UtilityTeam
and the strength of the Group's pipeline of opportunities, the
Board expects to trade in line with the current market expectations
for FY22.
Harvey Sinclair, CEO of eEnergy, commented :
" eEnergy has made robust progress over the last six months,
having successfully integrated the teams at Beond and UtilityTeam,
both of which are performing well and ahead of our expectations.
Moreover, we are seeing strong momentum with our customers engaging
with our newly rolled outsmart metering and energy efficiency
as-a-service solutions.
Whilst the volatile market environment represents risks for our
business, the ongoing energy crisis and the resulting increase in
energy prices has provided an inflection point for our business.
Our customers recognise the commercial significance of reducing
energy wastage now more than ever. We are one of the only
businesses that enable customers to reduce their energy consumption
as well as generate their own energy without the need for capital
investment.
Additionally, the broader macro conditions and clear regulatory
drivers continue to be a tailwind for the business, and the Board
believes this provides the Group with improved organic structural
growth drivers. "
Investor Presentation
CEO Harvey Sinclair and CFO Ric Williams will provide a live
presentation relating to the interim results via the Investor Meet
Company platform on 16 March 2022 at 09:00am GMT.
The presentation is open to all existing and potential
shareholders. Questions can be submitted at any time during the
live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet eEnergy Group plc via:
https://www.investormeetcompany.com/eenergy-group-plc/register-investor
Note: (1) Adjusted EBITDA is Earnings before interest, tax,
depreciation and amortisation before exceptional items, which are
transaction-related items, incremental integration and
restructuring costs and share based payment expenses.
Note (2) Profit before exceptional items is the profit before
tax and before the exceptional items listed in Note 1.
Note (3) Contracted forward revenue is based upon our
expectations of energy consumption by our clients under contract
plus the revenue to be earned from energy efficiency contracts that
have been signed but not yet installed.
Note (4) An investment grade proposal is a written proposal
issued to an engaged client after we have completed an investment
grade audit of the client's site.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, as it forms part of UK
Domestic Law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement, this inside information
is now considered to be in the public domain. The person
responsible for arranging for the release of this announcement on
behalf of eEnergy is Ric Williams, Chief Financial Officer.
Contacts:
eEnergy Group plc Tel: +44 20 7078
9564
Harvey Sinclair, Chief Executive Officer info@eenergyplc.com
Ric Williams, Chief Financial Officer www.eenergyplc.com
Crispin Goldsmith, Chief Strategy & Commercial
Officer
Singer Capital Markets (Nominated Adviser Tel: +44 20 7496
and Joint Broker) 3000
Justin McKeegan/Mark Taylor/Asha Chotai (Corporate
Finance)
Tom Salvesen (Corporate Broking)
Turner Pope Investments (Joint Broker) Tel: +44 20 3657
0050
Andy Thacker/James Pope info@turnerpope.com
Tavistock (Financial PR and IR) Tel: +44 20 7920
3150
Jos Simson/Heather Armstrong/Katie Hopkins eEnergy@t avistock.co.uk
About eEnergy Group plc
eEnergy (AIM: EAAS) is a digital energy services company,
empowering organisations to achieve Net Zero by tackling energy
waste and transitioning to clean energy, without the need for
upfront investment. It is making Net Zero possible and profitable
for all organisations in four ways:
-- Transition to the lowest cost clean energy through our
digital procurement platform and energy management services.
-- Tackle energy waste with granular data and insight on energy
use and dynamic energy management.
-- Reduce energy use with the right energy efficiency solutions without upfront cost.
-- Reach Net Zero with onsite renewable generation and EV charging.
eEnergy currently manages 5.3TWh of energy for 2,200 customers
across the public and private sectors.
eEnergy has been awarded The Green Economy Mark by London Stock
Exchange.
https://eenergyplc.com/
Chief Executive's Statement
The first half of our FY22 financial year has been a period in
which we have made significant steps in integrating the Group. We
have expanded our services and customer base and aligned our
broader strategy to become a leading integrated energy efficiency
and management business. The acquisition of UtilityTeam has brought
us a commercial edge to our Energy Management business, including
scale and a significant opportunity to cross-sell our products and
services to our growing customer base. Whilst H1 FY22 may have felt
like we were "treading water" in Energy Efficiency, the resumption
of face to face marketing to the education sector and the success
in establishing a broader set of channels to market means that our
pipeline of proposals and opportunities is at a record high.
Strategy
Our strategy since Admission has been to assemble, through
organic growth and acquisition, a balanced portfolio of energy and
carbon reduction solutions, to diversify the Group, improve its
quality of earnings and generate scale with a view to helping
schools and businesses achieve the Net Zero goals. eEnergy now has
the ability to offer customers a broad range of products and
services and expertise in energy management and efficiency and
intelligent measurement and analysis, cultivating a large and
relevant customer base to which the Group is cross-selling by
delivering its end-to-end offering. 44% of our Top 50 clients are
actively engaged in procuring significant additional services from
the Group.
With the acquisition and integration of UtilityTeam we have
established the foundation for how we support our clients in their
journey to Net Zero across the business. With this now complete, we
continue to build upon this base with an increased focus on channel
partners and relationships which means we can scale the business
more effectively and build relationships with customers who can
benefit from the breadth of our offering rather than just a single
solution.
We completed our first integrated onsite solar generation and
LED lighting project in H1 FY22 and we have proposals of
significant value that include onsite solar generation which we
hope to secure and deliver before the end of FY22. As energy prices
move inexorably higher we believe that the combination of being
able to install local solar generation alongside energy reduction
projects like LED, all on a capital free basis, is a compelling
proposition for the market. Onsite solar generation is relevant to
the vast majority of our clients and we have active engagement with
clients for projects worth over GBP7 million. We are also exploring
opportunities to ensure that we secure more of the value gained
through the installation of onsite solar generation, which may
include acquiring the right solar partner.
As previously disclosed, the Group also intends to add electric
vehicle charging solutions to its offering by the end of FY22. The
structural and regulatory growth drivers that the Group is exposed
to remain highly attractive and will support Management's growth
ambitions over the medium term.
Acquisition criteria
We have a clearly stated acquisition strategy with focused
criteria, including to:
-- building capability in renewables;
-- target high growth, strong and aligned leadership ideally with proprietary technologies; and
-- execute transactions that are earnings accretive and cash generative.
We will seek to target acquisitions based on maintainable EBITDA
multiples, with earnout and lock-ins for key management.
To date, the Group has utilised flexible acquisition structures,
involving a mix of consideration shares and cash. The Group intends
to continue to utilise such structures and where cash is paid using
available debt facilities, to limit Group net leverage to no more
than 2x EBITDA.
Energy Market conditions
We have seen extreme volatility in the UK and European energy
markets for a number of months, and more recently exacerbated by
the war in Ukraine. We have been advising our clients for some time
that higher energy prices are with us for the foreseeable future,
and that this only makes the savings achievable from implementing
energy efficiency measures that much greater. The volatility in the
market, including the risk of failure of some energy suppliers,
also emphasises the advantage we have from our technology and
consulting led Energy Management business, where customers are
increasingly looking for greater insight on consumption, efficiency
and risk management. However, the recent issues around security of
supply have meant that despite us having consultancy agreements in
place with our clients we have not always been able to lock in
their future energy supply. This is due to the effective closure of
the market with suppliers unwilling to price customers' demand in
the short term. Whilst we have seen some easing of these conditions
in the past few days, the market remains susceptible to change as
events in Ukraine trigger a broader political and economic
response.
Trading performance
Energy Management
Beond's first year
We acquired Beond in December 2020 to be the bedrock for our
Energy Management business and it has performed very well,
delivering Adjusted EBITDA 25% ahead of our acquisition base case
in the first year. This strong performance has been driven by
increased revenues as we have expanded the services our clients pay
for complemented by operating efficiencies in how we deliver those
services. In addition, we have delivered the automation of key data
collection and manipulation processes as well as our online
customer platform.
UtilityTeam
We completed the acquisition of UtilityTeam in September 2021
and trading to date has exceeded our expectations, although the
much larger size of UtilityTeam's key contracts brings positives
and negatives. The UtilityTeam contracts are typically longer and
larger than the more diversified portfolio of contracts in Beond
and the customers demand a broader range of services. However,
whilst we have good visibility of our pipeline and have not seen
any increase in customer churn, the disruption in the marketplace
we are currently seeing has resulted in a delay in signing some
larger contracts which, in turn, has a bearing on the timing of
revenue as we recognise c20% of the contract value on signing.
MY ZeERO
Following the successful completion of specific development
milestones in October 2021 eEnergy increased its stake in MY ZeERO
from 37.5% to 51%. We signed and then installed our first
standalone monitoring and data insights as a service contract with
a multi academy trust in December 2021 and at 31 December 2021 had
132 eMeters installed. Client demand is strong and we have
installed or secured orders for another 260 eMeters as at 11 March
2022 and expect to have installed over 1,000 eMeters by the end of
June from a sales pipeline of c.GBP1.8 million.
Energy Efficiency
We provide schools, businesses and other organisations with the
right energy efficiency solutions (such as LED lighting) to reduce
their energy usage with no upfront cost as the client pays for our
solution over a fixed term (typically five - seven years) where the
regular payment is always less than the savings on their
energy.
Due to the difficult market conditions brought about by the
third national Covid lockdown in early 2021 the financial
performance of the Energy Efficiency business in H1 FY22 was stable
at the level we achieved in H2 FY21 but behind that seen in H1
FY21, a period that benefited significantly from the "catch up" of
projects from the first Covid lockdown into the summer of 2020.
Access to potential clients changed significantly in October and
November 2021 as we were able to engage in face-to-face marketing
at events and conferences, which is a key direct sales channel for
the education marketplace. As a result, we achieved our lead
generation targets for the whole of FY22 by Christmas and the
pipeline of proposals and opportunities at 31 December 2021 was at
a record high. Momentum has continued since the end of the calendar
year and the pipeline has grown further still. The focus is now on
completing the committed installations by the end of FY22 and
continuing to develop our pipeline of opportunities. Together with
securing projects through key channel partners, the success in
securing the first phase with a number of large multi academy
trusts gives us confidence in a significantly improved outcome for
H2 FY22.
In Ireland the impact of the Covid restrictions on our ability
to secure leads, convert opportunities and install projects
continued throughout 2021 and were more severe than in the UK, with
revenue falling 18% compared with H1 FY21. Having brought Ireland
into the unified management structure and with those Covid
restrictions starting to ease, we are now seeing the volume of
sales increasing in line with our expectations.
Management team and structure
The acquisition of UtilityTeam allowed us to further strengthen
the management structure and we welcomed Delvin Lane and Simon
Smith as Managing Directors for each of the Energy Management and
Energy Efficiency businesses respectively. Whilst focused on the
solutions each of these businesses deliver Delvin and Simon work
collaboratively to ensure that we are delivering integrated
solutions to our top 50 strategic clients, those who have the
greatest need for our end-to-end solutions.
Full Year Outlook
Our strategy is on track and the Group has a growing pipeline of
opportunities for the remainder of the financial year across both
our Energy Efficiency and Energy Management divisions. Our new
business targets are well covered and we have issued more Energy
Efficiency proposals in H1 FY22 than in the whole of FY21.
Our contracted forward revenues (based on current expected
consumption for Energy Management clients), as at 31 December 2021
of GBP18.3 million over five years (up 205% from 31 December 2020).
Of that GBP18.3 million, GBP5.3 million is expected to be
recognised as revenue in H2 FY22 and GBP6.5 million recognised in
FY23.
eEnergy continues to make significant strategic progress towards
its stated goal to provide a simple, end to end solution to
organisations and companies wanting an economic and effective path
to Net Zero emissions. We have grown our customer base, evolved our
service offering and have exposure to some of the largest
structural growth trends in the energy segment. Our focus on
cross-selling to our existing customers (with whom we are actively
engaged in over GBP17 million of opportunities) and cultivating new
customers across both divisions is creating new opportunities for
the Group to drive further profitable growth.
There are clearly risks that are outside of the control of the
Group, including the global consequences of continued war in
Ukraine and the timing of customer decisions on Energy Efficiency
contracting and installations but on balance, and given the full
period contribution from UtilityTeam and the strength of our
pipeline of opportunities, the Board expects to trade in-line with
market expectations for the current financial year.
Harvey Sinclair
Chief Executive Officer
16 March 2022
Note: (1) Profit before exceptional items is the profit before
tax excluding transaction-related items, incremental integration
and restructuring costs and share based payment expenses.
Chief Financial Officer's Statement
The financial performance of the Group for the interim period
has been broadly in line with our expectations. The acquisition of
UtilityTeam in September and the related Placing that we completed
has strengthened our overall financial position and has contributed
to the continued growth in revenue and profitability.
Financial position and liquidity
Our closing cash at the end of December 2021 was GBP2.6 million
(30 June 2021: GBP3.3 million) and our debt balances (GBP3.7
million at 31 December 2021, including IFRS 16 lease liabilities)
were predominantly long term in nature. In February 2022 we
completed the refinancing of all of our secured debt with Silicon
Valley Bank as part of a GBP5 million committed revolving credit
facility which provides more flexibility at a significantly lower
average cost of finance.
During H1 FY22 the impact of the shift from energy suppliers
paying commission income in advance to favouring paying in arrears
became more pronounced and was a particular factor in the reduction
to our period end cash balance. Whilst the working capital profile
has changed there is no reduction to the overall cash commission
that the Group receives over the life of the effected
contracts.
The Board seeks to take a prudent approach to working capital
management, with ongoing monitoring of our financial position and
scenario analysis to reflect downside risk cases that may arise
from potential disruption to the business, whether from the
consequences of the Covid-19 pandemic or the volatility in the
energy market. Having considered management's assessment of
potential scenarios, the Board is confident that the Group has
sufficient financial resources and headroom within its debt
facilities (including the ability to meet its debt covenants) for
the foreseeable future.
Financial overview
The overall 42% increase in revenue reflects a stronger than
expected performance in Energy Management as well as the trading to
date from the acquisition of UtilityTeam in September 2021 and
slightly weaker than expected revenue in Energy Efficiency due to
the drag on lead generation earlier in 2021.
Energy Management
-- Revenue for H1 FY22 was GBP4.8 million (H1 FY21: GBP0.2
million) reflecting strong annualised growth of 25% following the
acquisition of Beond in December 2020 and the contribution from
UtilityTeam from its acquisition in September 2021.
-- Contracted forward revenues of GBP17.0 million at 31 December
2021, up 250% (31 December 2020 GBP4.9 million).
-- Operating EBITDA margin for H1 FY22 was 29.8% (H1 FY21:
15.4%) as we improved pricing and operational efficiency across the
Energy Management business.
-- During H1 FY22 87% of all energy management contracts signed
by clients were for 100% renewable supply (FY21: 82%).
The Energy Management business has performed ahead of
management's expectations in terms of both revenue growth and the
rate at which the UtilityTeam business is being integrated into the
Group. In the first year within the Group Beond has increased its
average contract term by 27% and revenue per meter under management
by 37%.
The contracted future revenue has grown both organically (at 27%
pa) and as a result of bringing UtilityTeam into the Group and we
have already contracted x% of our expected FY23 revenues.
MY ZeERO
-- At 31 December 2021 we had 132 eMeters deployed.
-- We had a further 260 eMeters either installed or under
committed order at 11 March 2022, which represents Contracted
future revenue was GBP0.4 million.
We report the results of MY ZeERO within the Energy Management
business and see this as an integral part of the Group as allowing
customers to measure their energy consumption is at the heart of
the strategy.
Energy Efficiency
-- Total contract value secured in H1 FY22 was GBP4.9 million (H1 FY21: GBP6.9 million).
-- Contracted future revenue of GBP1.3 million at 31 December
2021 was 10% higher compared to 31 December 2020 (GBP1.2
million).
-- Revenue for H1 FY22 was GBP4.8 million, the same as for H2
FY21 but down from GBP6.6 million in H1 FY21, where we benefited
from the catch-up of projects delayed after the first Covid
lockdown.
-- Gross margin (after commission) has improved 440bps to 37.8%
compared the equivalent period of the prior year (H1 FY21: 33.4%;
FY21 34.4%).
-- The operating EBITDA margin declined 730bps to 5.8% (H1 FY21:
13.1%) as a result of the lower revenue in the period and the
investment in additional sales, marketing and operational delivery
resources.
-- Number of projects completed in H1 FY22 was 108 (H1 FY21: 111).
The Energy Efficiency business has been stable across the whole
of calendar 2021. Market conditions have remained challenging in
Ireland where the extent of Covid lockdowns have been more
restrictive than in the UK.
Gross margins after commission have continued to improve over
the period as a result of the strong relationships we have with our
key supply chain partners across the UK and Ireland.
Operating expenses have increased 13% to GBP1.5 million (H1
FY21: GBP1.3 million) as we have continued to invest in our sales
and marketing and operational delivery capability in order to
capture and deliver the volume and complexity of projects we are
installing.
Head office costs
Following the acquisition of Beond in December 2021 and to
reflect the growing scale of the Group's operations, we expanded
the head office management team to include our COO as well as
additional Group resources in marketing and finance. As a result
our central management costs increased to GBP0.9 million in H1 FY22
(H1 FY21: GBP0.5 million).
Working capital
As described in my year end report our two divisions operate to
a different working capital tempo. Within Energy Efficiency we
typically fund our projects with funding partners at the time of
installation and our funding partner takes the collection risk over
the term of the client contract. Due to the timing of the
completion of projects in December 2021 more than usual of our
contracts completed in the month were funded during 2022 which
accounts for cGBP0.5 million of the increase in Trade and other
receivables.
Within Energy Management we recognise a proportion of revenue
when the underlying energy supply contract is signed between our
client and the energy supplier. We also typically receive the
majority of our income in the form of commission based upon actual
consumption by our client. Historically the business has received
more cash in advance from suppliers than the revenue that has been
recognised and therefore recorded a deferred income balance.
However, in light of the ongoing volatility in the energy markets
we have seen a change in receipt of supplier commissions, with
energy suppliers increasingly favouring payments in arrears, rather
than offering up to 80% of the expected commission upfront. This
shift by suppliers away from upfront commission has accelerated
with the recently increased volatility in the market. This has
changed the working capital profile and delayed the collection of
cash (but not overall cash commissions to be received), for the
applicable contracts.
Borrowings
At acquisition in September 2021, UtilityTeam had a GBP1.45
million CBILS loan. Throughout the period we have made scheduled
repayments across our loans and the combined effect has resulted in
our borrowings increased GBP1.1 million between 30 June and 31
December 2021 to GBP2.9 million.
In February 2022 we successfully refinanced all of our secured
loans with a three year, GBP5 million rolling credit facility with
Silicon Valley Bank which has significantly reduced our blended
cost of finance and provides us with enhanced liquidity and more
flexible financing. With Silicon Valley Bank we have a strong
partner who is very supportive of our growth strategy.
Acquisitions
In September 2021 we completed the acquisition of UtilityTeam.
As described in note 9 of the interim financial report, we expect
to pay approximately GBP18.0 million (assuming the maximum Earn-out
consideration is payable) of which we have already paid GBP14.5
million. The first GBP1.5 million of the earn out consideration is
payable in cash with the balance is shares. UtilityTeam is being
integrated into our Energy Management business but we are already
seeing the benefits of having broadened the capability and reach
within the business.
Ric Williams
Chief Financial Officer
16 March 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 31 December 2021
Period to Period to Year to
31 December 31 December 30 June
2021 2020 2021
Note GBP'000 GBP'000 GBP'000
----- -------------- -------------- ----------
Continuing operations
Revenue from contracts with customers 9,592 6,767 13,596
Cost of sales (4,067) (4,428) (8,059)
------------------------------------------- ----- -------------- -------------- ----------
Gross profit 5,525 2,339 5,537
Operating expenses (5,911) (2,952) (4,955)
Included within operating expenses
are:
* Other exceptional items 4 1,193 985 248
-------------- -------------- ----------
Adjusted operating expenses (4,718) (2,213) (4,707)
-------------- -------------- ----------
Adjusted earnings before interest,
taxation, depreciation and amortisation 807 372 830
------------------------------------------- ----- -------------- -------------- ----------
Earnings before interest, taxation,
depreciation and amortisation (386) (613) 582
Depreciation and amortisation (401) (63) (333)
Finance costs (227) (212) (426)
Loss before taxation (1,014) (888) (177)
Income tax - - 205
------------------------------------------- ----- -------------- -------------- ----------
Profit (Loss) for the year from
continuing operations attributable
to the owners of the company (1,014) (888) 28
=========================================== ===== ============== ============== ==========
Attributable to:
Owners of the company (932) (888) 28
Non-controlling interest (82) - -
------------------------------------------- ----- -------------- -------------- ----------
(1,014) (888) 28
------------------------------------------- ----- -------------- -------------- ----------
Other comprehensive income -
items that may be reclassified
subsequently to profit and loss
Change in the fair value of other
current assets - 43 34
Translation of foreign operations 107 49 102
------------------------------------------- ----- -------------- -------------- ----------
Total other comprehensive profit
(loss) 107 92 136
------------------------------------------- ----- -------------- -------------- ----------
Total comprehensive profit (loss)
for the year (907) (796) 164
=========================================== ===== ============== ============== ==========
Total comprehensive profit (loss)
attributable to:
Owners of the company (825) (796) 164
Non-controlling interest (82) - -
------------------------------------------- ----- -------------- -------------- ----------
(1,003) (796) 164
------------------------------------------- ----- -------------- -------------- ----------
Basic and diluted loss per share
from continuing operations attributable
to owners of the company 5 (0.33)p (0.58)p 0.01p
------------------------------------------- ----- -------------- -------------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
As at As at
31 December 30 June
2021 2021
Note GBP'000 GBP'000
----- -------------
NON-CURRENT ASSETS
Property, plant and equipment 296 80
Intangible assets 6 30,253 11,693
Right of use assets 622 610
Deferred Tax Asset 415 415
Investment in Associate - 155
Total non-current assets 31,586 12,953
------------------------------------------ ----- ------------- ---------
Other current assets 44 47
Inventories 742 371
Trade and other receivables 8,049 4,276
Financial assets at fair value through
profit or loss 140 140
Cash and cash equivalents 2,588 3,332
------------------------------------------ ----- ------------- ---------
Total current assets 11,563 8,166
------------------------------------------ ----- ------------- ---------
TOTAL ASSETS 43,149 21,119
------------------------------------------ ----- ------------- ---------
NON-CURRENT LIABILITIES
Lease liability 376 434
Borrowings 7 2,367 1,245
Deferred Tax Liability 1,576 415
Other non-current liabilities 300 468
Total non-current liabilities 4,619 2,562
CURRENT LIABILITIES
Trade and other payables 10,019 7,819
Deferred and contingent consideration 9 4,245 -
Lease liability 343 264
Borrowings 7 579 601
Total current liabilities 15,186 8,684
------------------------------------------ ----- ------------- ---------
TOTAL LIABILITIES 19,805 11,246
------------------------------------------ ----- ------------- ---------
NET ASSETS 23,344 9,873
========================================== ===== ============= =========
Equity attributable to owners of the
parent
Issued share capital 16,367 16,071
Share premium 47,167 33,014
Other reserves 771 601
Reverse acquisition reserve (35,246) (35,246)
Foreign currency translation reserve 94 (13)
Accumulated losses (5,486) (4,554)
------------------------------------------ ----- ------------- ---------
Total equity attributable to owners
of the parent 23,667 9,873
------------------------------------------ ----- ------------- ---------
Non-controlling interest (323) -
------------------------------------------ ----- ------------- ---------
Total equity 23,344 9,873
========================================== ===== ============= =========
CONSOLIDATED STATEMENTS OF CASHFLOWS
For the six month period ended 31 December 2021
Period Period Year to
to 31 December to 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
---------------- ---------------- ---------
Cash flow from operating activities
Operating profit (loss) - continuing
operations (1,014) (888) 28
Adjustments for:
Depreciation and amortisation 401 63 332
Finance cost (net) 127 131 311
Share issue to settle expenses - - 301
Share option charge 170 172 485
Share of loss in associate 30 - 34
Finance charge on lease liabilities 31 34 65
Foreign exchange movement 12 10 35
Gain on derecognition of contingent
consideration - - (1,444)
-------------------------------------------- ---------------- ---------------- ---------
Operating cashflow before working
capital movements (243) (478) 147
Decrease (increase) in trade and
other receivables 65 (1,652) (2,406)
(Decrease) increase in trade and
other payables (2,612) 1,344 2,760
(Increase) decrease in inventories (42) 10 (23)
Decrease (increase) in deferred
income (414) (140) (264)
Net cash outflow inflow from operating
activities (3,246) (916) 214
-------------------------------------------- ---------------- ---------------- ---------
Cash flow from investing activities
Cash acquired on acquisition of
business 2,800 1,218 1,218
Cash from exercise of options in
acquired business - 521 521
Cash paid to acquire subsidiaries (10,582) (2,395) (2,395)
Expenditure on intangible assets (457) - (217)
Purchase of property, plant and
equipment (117) (122) (134)
-------------------------------------------- ---------------- ---------------- ---------
Net cash (outflow) from investing
activities (8,356) (778) (1,007)
-------------------------------------------- ---------------- ---------------- ---------
Cash flows from financing activities
Interest (paid) received (97) (131) (319)
Repayment of lease liabilities (109) (41) (163)
Net proceeds from the issue of
shares 11,382 2,985 3,149
Proceeds from loans and borrowings - 299 294
Repayment of borrowings (333) - (314)
-------------------------------------------- ---------------- ---------------- ---------
Net cash inflow from financing activities 10,843 3,112 2,647
-------------------------------------------- ---------------- ---------------- ---------
Net increase in cash and cash equivalents (759) 1,418 1,854
Effect of exchange rates on cash 15 (73) -
Cash and cash equivalents at the
start of the period 3,332 1,478 1,478
Cash and cash equivalents at the
end of the period 2,588 2,823 3,332
============================================ ================ ================ =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2021
Reverse Foreign
Share Share Acqn. Other Currency Accum. Non Control Total
Capital Premium Reserve Reserves Reserve Losses Interest Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2021 16,071 33,014 (35,246) 601 (13) (4,554) - 9,873
Translation
of foreign
operations - - - - 107 - - 107
Loss for the ( 932
period - - - - - ) (82) (1,014)
---------------------- --------- --------- --------- ---------- ---------- -------- ------------ --------
Total comprehensive
loss for the ( 932
period - - - - 107 ) (82) (907)
------------
Shares issued
during the
period 296 14,771 - - - - - 15,067
Cost of share
issue - (618) - - - - - (618)
Share based
payments - - - 170 - - 170
Acquisition
of new entity - - - - - - (241) (241)
---------------------- --------- --------- --------- ---------- ---------- -------- ------------ --------
Total transactions
with owners 296 14,153 - 170 - - (241) 14,378
---------------------- --------- --------- --------- ---------- ---------- -------- ------------ --------
Balance at
31 December
2021 16,367 47,167 (35,246) 771 94 (5,486) (323) 23,344
====================== ========= ========= ========= ========== ========== ======== ============ ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 31 December 2020
Reverse Foreign
Share Share Acqn. Other Currency Accum. Total
Capital Premium Reserve Reserves Reserve Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 15,725 22,375 (35,246) 82 (115) (4,582) (1,761)
Translation of
foreign operations - - - - 49 - 49
Revaluation of
other assets - - - 43 - - 43
Loss for the
period - - - - - (888) (888)
------------------------- --------- --------- --------- ---------- ---------- -------- --------
Total comprehensive
loss for the
year attributable
to equity holders
of the parent - - - 43 49 (888) (796)
Shares issued
during the period 328 10,301 - - - - 10,629
Share based payments - - 172 - - 172
Cost of share
issue (227) - - - - (227)
------------------------- --------- --------- --------- ---------- ---------- -------- --------
Total transactions
with owners 328 10,074 - 172 - - 10,574
------------------------- --------- --------- --------- ---------- ---------- -------- --------
Balance at 31
December 2020 16,053 32,449 (35,246) 297 (66) (5,470) 8,017
========================= ========= ========= ========= ========== ========== ======== ========
SELECTED NOTES TO THE FINANCIAL INFORMATION
For the six month period ended 31 December 2021
1 Basis of preparation
The condensed consolidated interim financial statements of
eEnergy Group plc (the "Group") for the six month period ended 31
December 2021 have been prepared in accordance with Accounting
Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 30 June 2021, which was prepared under UK adopted
international accounting standards (IFRS), and any public
announcements made by eEnergy Group plc during the interim
reporting period and since.
These condensed consolidated interim financial statements do not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 June 2021 prepared under IFRS have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been
audited.
Basis of preparation - going concern
The interim financial statements have been prepared under the
going concern assumption, which presumes that the Group will be
able to meet its obligations as they fall due for the foreseeable
future.
At 31 December 2021 the Group had cash reserves of GBP2,588,000
(30 June 2021: GBP3,332,000; 31 December 2020: GBP2,823,000).
In assessing whether the going concern assumption is
appropriate, the Directors have taken into account all relevant
information about the current and future position of the Group and
Company, including the current level of resources and the ability
to trade within the terms and covenants of its loan facility over
the going concern period of at least 12 months from the date of
approval of the interim financial statements. The eEnergy group
meets its working capital requirements from its cash and cash
equivalents and its loan facilities, which are secured by a
debenture over its trading subsidiaries.
Having prepared budgets and cash flow forecasts covering the
going concern period which have been stress tested for the negative
impact of possible scenarios from volatile UK energy prices which
have been exacerbated by the current war in Ukraine, the Directors
believe the Group has sufficient resources to meet its obligations
for a period of at least 12 months from the date of approval of
these interim financial statements. Discretionary expenditure will
be curtailed, if necessary, in order to preserve cash for working
capital purposes and ensure compliance with covenants.
Taking these matters into consideration, the Directors consider
that the continued adoption of the going concern basis is
appropriate having prepared cash flow forecasts for the relevant
period. The interim financial statements do not reflect any
adjustments that would be required if they were to be prepared
other than on a going concern basis.
Accounting policies
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting
period.
New and amended standards adopted by the group
A number of amended standards became applicable for the current
reporting period. These amended standards do not have a material
impact on the Group, and the Group did not have to change its
accounting policies or make retrospective adjustments as a result
of adopting these standards.
3. SEGMENT REPORTING
The following information is given about the Group's reportable
segments:
The Chief Operating Decision Maker is the Board of Directors.
The Board reviews the Group's internal reporting in order to assess
performance of the Group. Management has determined the operating
segments based on the reports reviewed by the Board.
The Board considers that during the six month period ended 31
December 2021 and 31 December 2020, the Group operated in two
business segments, the Energy Management segment and the Energy
Efficiency segment, which predominantly comprised of LED lighting
solutions. With the strengthening of the management team following
the acquisition of UtilityTeam and the appointment of Managing
Directors to lead each of the operating segments the Board now
primarily reviews Energy Efficiency as a single segment whereas in
the prior year the Board reviewed the operations in the UK and
Ireland separately.
Energy Energy
Mgmt Efficiency Central Group
---------------------------------- -------- ------------ -------- ---------
2021 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- ------------ -------- ---------
Revenue - UK 4,832 3,333 - 8,165
Revenue - Ireland - 1,427 - 1,427
-------- ------------ -------- ---------
Revenue - Total 4,832 4,760 - 9,592
Cost of sales (1,107) (2,960) - (4,067)
-------- ------------ -------- ---------
Gross Profit 3,725 1,800 - 5,525
Operating expenses (2,284) (1,524) - (3,808)
-------- ------------ -------- ---------
Operating EBITDA 1,441 276 - 1,717
Central management costs - - (896) (896)
Adjusted EBITDA 1,441 276 (896) 821
Depreciation and amortisation (344) (56) (1) (401)
Finance and similar charges (38) (184) (19) (241)
-------- ------------ -------- ---------
Profit (loss) before exceptional
items 1,059 36 (916) 179
Exceptional items (139) (63) (991) (1,193)
-------- ------------ -------- ---------
Profit (loss) before tax 920 (27) (1,907) (1,014)
-------- ------------ -------- ---------
Taxation charge - - - -
-------- ------------ -------- ---------
Profit (loss) after tax 920 (27) (1,907) (1,014)
======== ============ ======== =========
Non-controlling interest (82) - - (82)
Profit (loss) attributable to
owners of the Company 1,002 (27) (1,907) (932)
======== ============ ======== =========
Net Assets
Non current assets - UK 23,269 3,326 4,385 30,980
Non current assets - Ireland - 606 - 606
Current assets 6,878 4,161 524 11,563
-------- ------------ -------- ---------
Assets - Total 30,147 8,093 4,909 43,149
Liabilities (8,891) (6,167) (4,747) (19,805)
--------
Net assets 21,256 1,926 162 23,344
======== ============ ======== =========
Energy Energy
Mgmt Efficiency Central Group
---------------------------------- -------- ------------ -------- ---------
2020 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- ------------ -------- ---------
Revenue - UK 162 4,881 - 5,043
Revenue - Ireland - 1,724 - 1,724
-------- ------------ -------- ---------
Revenue - Total 162 6,605 - 6,767
Cost of sales (28) (4,400) - (4,428)
-------- ------------ -------- ---------
Gross Profit 134 2,205 - 2,339
Operating expenses (109) (1,340) - (1,449)
-------- ------------ -------- ---------
Operating EBITDA 25 865 - 890
Central management costs - - (518) (518)
Adjusted EBITDA 25 865 (518) 372
Depreciation and amortisation (10) (46) (7) (63)
Finance and similar charges (6) (42) (164) (212)
-------- ------------ -------- ---------
Profit (loss) before exceptional
items 9 777 (689) 97
Exceptional items - - (985) (985)
-------- ------------ -------- ---------
Profit (loss) before and after
tax 9 777 (1,674) (888)
======== ============ ======== =========
Net Assets
Non current assets - UK 1,630 195 10,314 16,014
Non current assets - Ireland - 733 - 733
Current assets 1,615 3,854 1,408 6,877
-------- ------------ -------- ---------
Assets - Total 3,245 4,782 11,722 19,749
Liabilities (2,132) (6,968) (2,632) (11,732)
--------
Net assets (liabilities) 1,113 (2,186) 9,090 8,017
======== ============ ======== =========
4. EXCEPTIONAL ITEMS
Operating expenses include items that the Directors consider to
be exceptional by their nature. These items are:
Period to Period to Year to
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------- ---------
Acquisition related expenses 820 813 1,094
Changes to initial recognition
of contingent consideration - - (1,444)
Incremental restructuring and
integration costs 198 - 113
Share based payment expense 175 172 485
------------- ------------- ---------
Total exceptional expenses 1,193 985 248
------------- ------------- ---------
Acquisition expenses are the costs incurred in completing the
"Buy and Build" strategy associated with acquisitions and strategic
investments. The costs incurred in completing the acquisition of
UtilityTeam in September 21 are described in Note 8.
The share based payment charge reflects the non cash cost of the
Management Incentive Plan awards made on 7 July 2020 and the award
of options made to the senior management team on 7 December 2021
which are being amortised over their three year vesting period.
5. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
calculated by dividing the profit or loss for the year by the
weighted average number of ordinary shares in issue during the
year
Period to Year to 30 Period to
31 Dec 2021 June 2021 31 Dec 2020
------------------------------- ------------- ------------ -------------
(Loss) profit for the year
from continuing operations
attributable to owners of
the Company - GBP'000 (1,014) 28 (888)
Weighted number of ordinary
shares in issue 304,325,269 199,038,204 152,632,932
-------------------------------- ------------- ------------ -------------
Basic earnings per share
from continuing operations
- pence (0.36) 0.01 (0.58)
-------------------------------- ------------- ------------ -------------
There is no difference between the diluted loss per share and
the basic loss per share presented. Share options and warrants
could potentially dilute basic earnings per share in the future,
but were not included in the calculation of diluted earnings per
share as they are anti-dilutive for the periods presented.
6. INTANGIBLE ASSETS
Customer Trade
Goodwill Software relation-ships names Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- ---------------- --------- ---------
Cost
At 1 July 2021 9,803 642 824 555 11,824
Additions on acquisition 14,178 - 3,487 1,039 18,704
Additions in the
period - 244 - - 244
At 31 December
2021 23,981 886 4,311 1,594 30,772
========= ========= ================ ========= =========
Amortisation
At 1 July 2021 - 60 41 30 131
Amortisation in
the period - 182 143 63 388
At 31 December
2021 - 242 184 93 519
--------- --------- ---------------- --------- ---------
Net book value
at
30 June 2021 9,803 582 783 525 11,693
--------- --------- ---------------- --------- ---------
Net book value
at
31 December 2021 23,981 644 4,127 1,501 30,253
========= ========= ================ ========= =========
7. BORROWINGS
31 December 30 June 31 December
2021 2021 2020
GBP'000 GBP'000 GBP'000
------------- ------------ --------- ------------
Current
Borrowings 579 601 592
579 601 592
------------- ------------ --------- ------------
Non-current
Borrowings 2,367 1,245 1,629
2,367 1,245 1,629
------------- ------------ --------- ------------
The terms of the Borrowings are as disclosed in the 30 June 2021
financial statements except that at acquisition in September 2021
UtilityTeam had a CBILS Loan of GBP1,450,000. The CBILS loan was
interest free for the first twelve months and is then repaid in
instalments over the following five years. The interest rate on the
UtilityTeam CBILS loans is 1.28 % above base rate per annum. The
CBILS loan was secured over the assets of UtilityTeam.
In February 2022 the Group completed the refinancing of all of
its secured borrowings and agreed a GBP5m secured revolving credit
facility with Silicon Valley Bank.
...............................
Maturity of the borrowings as of 31 December 2021 are as
follows:
GBP'000
----------------------- --------
Current 579
Due between 1-2 years 1,602
Due between 2-5 years 750
Due beyond 5 years 15
------------------------ --------
2,946
----------------------- --------
8. RELATED PARTY TRANSACTIONS
Key management personnel are considered to the Board of
Directors. The amount payable to the Board of Directors for the six
months ended 31 December 2021 was GBP563,000 (H1 FY21:
GBP266,000).
9. BUSINESS COMBINATIONS
Acquisition of UtilityTeam Topco Limited and related Placing
On 17 September 2021 the Company completed the acquisition of
all of the share capital of UtilityTeam TopCo Limited ("UTT"). At
the same time the Company completed the Placing of 80 million
shares which were issued at 15 pence per share, which raised
GBP12.0 million for the Company. The Placing proceeds have been
primarily used to settle the initial cash consideration for the
acquisition of UTT.
UTT is a UK-based, top 20 energy consulting and procurement
business, whose services aim to reduce costs and support clients'
transition to Net Zero.
The initial consideration of GBP14.5 million was satisfied as
follows:
-- cash consideration of GBP9.5 million, payable on completion
with further cash consideration of GBP2 million, GBP1 million of
which was paid in October 2021 and the final GBP1 million in
January 2022.; and
-- the issue of 18.0 million Ordinary Shares, which had a fair
value of GBP3.0 million based on the closing share price on the day
prior to completion.
There is an adjustment to the value of the initial consideration
based upon the level of net working capital and debt in UTT at the
date of acquisition. Any reduction in the fair value of the net
assets acquired will result in lower consideration being paid and
lower goodwill arising on the acquisition.
Further earn-out consideration of up to a maximum of GBP5.1
million may be payable, based on a multiple of 7.0x UTT's EBITDA,
for the year ending 31 December 2021. The Company will pay GBP7 for
every GBP1 of EBITDA generated in excess of GBP2.3 million, up to a
maximum EBITDA of GBP3.0 million ("Earn-Out Consideration").
The Earn-Out Consideration would be satisfied as follows:
-- the first GBP1.5m of Earn-Out Consideration will be paid in cash; and
-- any balance, up to GBP3.6 million, will be satisfied by the
issue of new Ordinary Shares at a price that is the higher of 24p
and the 30 day volume weighted average price prior to 31 December
2021. Therefore a maximum of 15 million new Ordinary Shares may be
issued.
The initial estimate of the fair value of the assets acquired
and liabilities assumed of UTT at the date of acquisition based
upon the UTT consolida ted balance sheet at 17 September 2021 are
as follows:
GBP'000
------------------------------------------------------ ---------
Property, plant and equipment 180
Intangible assets 4,526
Right of use assets 135
Cash at bank 2,787
Inventory 27
Trade and other receivables 3,759
Trade and other payables (4,813)
Lease liability (141)
Deferred tax liability (1,161)
Loans and other borrowings (1,450)
---------
Total identifiable net assets acquired 3,849
Goodwill 13,935
------------------------------------------------------ ---------
Consideration
Initial consideration (recorded at the market value
of the shares issued) 14.539
Contingent consideration 3,245
Total consideration 17,784
------------------------------------------------------ ---------
The initial accounting for the acquisition of UTT is incomplete
as at the date of these interim financial statements given the
short period of time since the acquisition was completed.
10. EVENTS AFTER THE BALANCE SHEET DATE
Refinancing of all secured debt
In February 2022 the Group completed the refinancing of all of
its secured borrowings and agreed a GBP5m secured revolving credit
facility with Silicon Valley Bank.
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END
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(END) Dow Jones Newswires
March 16, 2022 03:00 ET (07:00 GMT)
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