Map sale

Sale of Good Energy generation assets to provide buffer in wholesale market as supplier becomes ‘essentially debt free’

Good Energy is once again focusing on distributed energy and mobility, as its financial results show it is now debt-free on a net basis due to the sale of its generation portfolio.

The green energy provider highlighted how the proceeds from the sale of this transaction – which was completed in January 2022 for a total consideration of £21.2 million – provide a balance of growth capital and a buffer for the volatile wholesale energy market.

In February 2022, Good Energy had a cash position of £19.6m, with the company saying it needed to redirect its capital allocation towards growth and investment while maintaining a strong balance sheet.

Its results show its gross profit for the year to 31 December 2021 was down 8.6% on the previous year, from £29.6m to £27m. It had a gross profit margin of 18.5%, down from 22.6% in 2020

This was prompted by the current energy crisis and the quadrupling of the wholesale market price, according to the company.

Revenue for the year increased by 11.8% to £146 million, driven by significant price increases throughout the year in response to rising wholesale costs.

Reported basic loss per share decreased to -21.8p from 0.9p in 2020, while basic underlying earnings per share from continuing operations increased from 0.9p to 13.2p

The company said it remains well covered for summer 2022, with plans to gradually increase cover for winter 2022.

“In 2021, 28 energy supply companies went bankrupt, affecting customer bills and their confidence in the industry. This was the result of both bad business practice and the UK’s continued reliance on volatile global fossil fuel markets,” said Nigel Pocklington, CEO of Good Energy.

While Pocklington referred to the series of measures announced by the government to deal with rising energy bills, he said the long-term solution remains investment in renewable technologies and a greener energy system.

“With fewer suppliers in the market, this leaves more room for cautious operators like Good Energy to continue driving innovation in the sector.”

The green energy provider announced today (March 29) its goal to help one million homes and businesses reduce carbon from their energy and transport consumption by 2025.

Going forward, Good Energy is focused on decentralized energy, with the company set to give it a new direction. It will build new propositions for customers to generate their own clean energy in their homes and businesses.

There will also be a focus on mobility, with Good Energy saying its Zap-Map subsidiary has more than 70% of the UK market for EV drivers. New services were also launched under the Zap-Map brand in 2021, including paid subscriptions, while new payment platform partners joined and a partnership with fleet operator Fleetcor was sign.

Registered Zap-Map users have grown by 125% to 350,000 in 2021, while map data includes 95% of UK public charging stations on its network. Zap-Pay also now has nine charging station operators registered and 25% of the fast charging market.

Good Energy intends to participate in the current Zap-Map Series A funding round.

The energy provider said its rollout of smart meters was “progressing well”, with nearly 22,000 installed in 2021, which it said was in line with expectations.

Its customer count also rose 2.1% to 277,300. However, Good Energy said the current market volatility has caused the company to put some of its long-term customer ambitions on hold.

This volatility saw ScottishPower announce last week that it would exit the industrial and commercial market, citing the “unprecedented challenges” currently facing energy suppliers.

In its results today, Good Energy also referred to “significant market challenges”, but said it delivered a resilient performance over the year.

Meanwhile, SSE today also spoke of “turbulent” market conditions as it reported improved 2021/22 adjusted earnings per share. These should now be in the 92p to 97p range from the previous orientation of 90p.

SSE said weather conditions caused its generation shortfall from renewable sources to fall from 19% below plan for the nine months to December 31, 2021, to around 12% below plan as of March 22. . In addition, he said the strong performance of thermal and flexible hydroelectric plants continued in volatile market conditions, all of which led to his adjusted earnings per share update.