9th July 2015

Good Energy Group PLC

("Good Energy" or "the Company")

 

Strong customer growth underpinned by continued investment in the business

 

Good Energy, the AIM listed renewable electricity supplier and generator, is pleased to provide the following trading update for the first six months ended 30 June 2015.

 

Highlights:

Supply

·    Continued strong customer growth with overall customer numbers up 34%.

 

Customer type	H1:  30 June 2015	H1:                 30 June 2014	Year-on-Year Growth
Electricity	55,000	46,000	+20%
Gas	28,000	20,000	+40%
Feed-in-tariff sites	93,500	66,000	+42%
Total	176,500	132,000	+34%

 

·    Significant investment made in the period to support further customer growth.

 

Generation

·    Four solar farms completed with a combined capacity of 23MW - Rook Wood and Lower End (Wiltshire), Carloggas (Cornwall) and Crossroads (Dorset).

·    Oaklands solar farm, with a capacity of 4.9MW, on track to complete in H2 2015 bringing year-end combined capacity to 52MW.

 

Overview

·    Strong customer growth has been achieved against a backdrop of continued competitive trading conditions.

·    The Company intends to set out a new five-year strategic plan at its interim results for the six months ended 30 June 2015 scheduled to be announced on 24^th September 2015.

·    We note the government's decision to end subsidies for onshore wind a year earlier than planned. We are in discussions with government and other stakeholders regarding any grace period that might be applied.

·    We welcomed the Competition & Market Authority's interim report which clearly recognises that consumers are failing to be able to access the best deals and acknowledges that regulation, intended to make things easier and fairer, has failed to deliver.

·    We note the announcement in the Budget that the government will remove the Climate Change Levy (CCL) exemption for renewably sourced electricity from 1 August 2015. Our initial assessment indicates that there is no significant impact on our funding portfolio and there is a potential upside in the supply business. We will need to see the detail of this measure in order to assess the full impact.

 

Juliet Davenport OBE, Chief Executive, said:

"We have made positive progress during the period with overall customer numbers up to 176,500, as consumers continue to switch to Good Energy. At the same time, we continue to invest significantly in our business and domestics customer proposition which will support the delivery of a new five year growth strategy.

"In terms of our generation portfolio, 23MW of additional capacity has been brought on during the period and we are on track to deliver 52MW of our own generated capacity by year end. However, the recent Government announcement that it will end the subsidy for onshore wind appears to be inconsistent with the legally binding commitment to meet CO2 emissions targets by 2020. We will look to implement both short and longer-term strategies in the light of these plans.

"I look forward to providing a further update on our five-year growth strategy at our interim results."

Supply

On the supply side, although we saw a slight slow-down in growth, the number of electricity customers nonetheless grew by 20% to a total of 55,000 (H1 2014 46,000). Gas customer numbers were up 40% to 28,000 (H1 2014: 20,000) and Feed-in-Tariff customers increased by 42% to 93,500 (H1 2014: 66,000).  In addition, half hourly business customer numbers grew by 48.6%.

This growth continues to be driven by the Company's proposition of 100% renewable electricity and great customer service at a competitive price.

Generation

During the period, investment has continued into the Company's renewable electricity generation portfolio, with the completion of four solar farms - Rook Wood and Lower End (Wiltshire) Carloggas (Cornwall) and Crossroads (Dorset) with a total combined capacity of 23MW.  An additional 4.9MW site (Oaklands, in Dorset), is due to be completed during the second half of the year which will bring the installed capacity to 52MW by 31^st December 2015.  We are currently evaluating the impact of the recent Government announcement on onshore wind on our portfolio and considering the longer-term options for this aspect of our renewables generation.

£4.1 million has been drawn down from Gravis Capital Partners, providing long term funding for the Lower End solar farm. This brings the total facility drawn down to date to £33.3 million.

Tidal Lagoon Swansea Bay Plc, in which we invested last year, received planning permission and is on track to start generating electricity in 2019.

Current trading

Over the first six months of the year, we have maintained strong customer growth against a backdrop of continuing competitive market conditions.  We have seen pressure on overall margins in the Supply business with strong growth in lower margin business volumes for electricity customers. In particular, we have incurred higher costs than expected in our gas business.  Partially offsetting this, we have seen both wind and solar generation performing slightly ahead of expectations.  No significant site sales were made in the first six months.

Given current trading, continued growth in customer numbers, continued out-performance across our generation portfolio and subject to successful completion of site sales in the next six months, the Company expects the full year results to be in line with expectations, with margin pressure in the Supply business broadly offset by other areas of the business.

Investments of £0.6m have been made during the period in customer segmentation work and in strengthening the sales team, and these costs will be reflected in Good Energy's interim results.

Research and Product Innovation

Our Research and Product Innovation team has been exploring opportunities around a decentralised electricity market and the potential for home battery storage.

We have established a partnership with Open Utility, for a trial of Piclo - the UK's first online marketplace for buying and selling renewable electricity. The trial will enable commercial consumers and renewable generators to trade electricity, in a kind of 'eBay for energy'.

The Company has also partnered with Moixa Technology, which has been awarded funding by the Department of Energy and Climate Change (DECC) to develop an innovative trial project involving energy efficiency and battery storage in the home.

Management team

Further appointments have been made to the senior management team to drive forward the Company's next stage of growth with the appointment of David Brooks, who joins the Company as Commercial Director in September 2015. He will be responsible for Good Energy's commercial strategy, covering sales, business development, marketing and the quality of its customer experience. Fran Woodward joined the Executive team in April as Director of People & Culture.

Notice of Results

The Company will announce its interim results for the six months ended 30 June 2015 on 24^th September 2015.

[Ends]

 

Enquiries:

Good Energy Group PLC Juliet Davenport, Chief Executive Denise Cockrem, Chief Financial Officer	Tel. +44 (0)1249 766795
Arden Partners plc (Nominated Adviser and Broker) Steve Douglas, Michael McNeilly	Tel: +44 (0) 12 1423 8900
Camarco (Financial PR Adviser) Geoffrey Pelham-Lane, Billy Clegg, Georgia Mann	Tel: +44(0) 20 33757 4980
Good Energy Press Office Gill Dickinson	Tel: +44(1)249 765540

 

 

 

Notes to editors:

 - Good Energy is a fast-growing 100% renewable electricity supply company, offering value for money and award-winning customer service. 

- An AIM-listed PLC, and founder member of the Social Stock Exchange, its mission is to support change in the energy market, address climate change and boost energy security. 

- Good Energy matches over the course of a year all the electricity its customers use with power from renewable sources. 

- The company has consistently performed well in the annual Which? energy company customer satisfaction survey, winning first or second place in each of the last four years, and topping two consecutive MoneySavingExpert consumer polls. Good Energy's dual fuel tariff is cheaper on average than the standard tariffs sold by the 'Big 6' before discounts. 

- It now has more than 55,000 renewable electricity customers and 28,000 gas customers. It works with a community of 93,500 small and medium scale renewable electricity generators. (All figures as at 30 June 2015.)

- Good Energy is the owner of Delabole Wind Farm, the UK's first commercial wind farm, and owns and operates Hampole Wind Farm, near Doncaster. The company also owns and operates six solar farms.

- The Company has recently won the following: Business Green Awards - Company of the Year 2015; 2015 British Renewable Energy Association Leadership Award; and, for the second year running, Social Impact Company of the Year at the 2015 Small Cap Awards.