TIDMGOOD
RNS Number : 0638S
Good Energy Group PLC
21 June 2018
Good Energy Group PLC
("Good Energy" or "the Company")
Annual General Meeting Statement & Trading Update
John Maltby, Chairman of Good Energy, and Juliet Davenport,
Chief Executive Officer, will give the following update on Good
Energy at the Company's Annual General Meeting, to be held at 12pm
today at Chippenham Town Hall, High Street, Chippenham, SN15
3ER:
Market Overview - Power to the People
Energy, or rather the consumption and control of it, is
shifting. It is not simply about the proliferation of new energy
suppliers and tariffs; it is about the way we use and generate
energy in our own homes and businesses. This means that the energy
market is changing. More suppliers and more choice, but with a
fundamental shift at its core, decentralisation.
Decentralised energy flips the axis of power, as households and
businesses begin to generate, store, manage and sell energy rather
than simply consume it. People are increasingly energy aware. Solar
panels are more affordable. SMART (Self-Monitoring Analysis and
Reporting Technology) innovations are allowing homes and businesses
to track and manage consumption. Newsworthy price hikes, and a
proliferation of price comparison sites and switching services,
mean more than ever they're paying more attention to their bills
too. There is an environmental and ethical awakening happening
across society, with greater awareness of personal and corporate
environmental footprints.
A key driver of this change is rapidly advancing and accessible
technology:
-- Smartphones with on-tap data and increasingly sophisticated
apps: 96% of future generations, 16--24 year olds, in the UK own a
smart phone.
-- SMART metering is allowing households and businesses to track
and manage energy consumption. Moreover, the Government has called
on all energy suppliers to install SMART meters in 53m British
homes by 2020 (Source: Energy UK Report, Summer 2017).
-- In our experience, domestic solar panels are becoming the
norm on a significant number of new build housing projects and are
increasingly easy to retrofit to older houses. Since 1990, the cost
per watt of solar panels has dropped 90% (Source: Morgan Stanley,
2017); better technology, cheaper production and larger market all
driving costs down.
-- Battery performance, stability, efficiency, capacity and cost
continues to improve at a rapid rate, giving households and
businesses new storage and energy management potential. EV battery
prices have fallen 79% since 2010 (Source: Bloomberg New Energy
Finance, 2018).
The balance is shifting. Old world to new generation. And Good
Energy is at the forefront of that change.
Good Energy, Good Prospects
Good Energy is well--positioned for this new market. We have
spearheaded decentralised energy since 2004 with our forerunner
offerings to the Feed in Tariff, Home and Smart generations. Today,
we are the UK's third largest supplier in this market.
We are growing through continued investment across multiple
channels:
-- Technology - Our SMART Programme will use the SMETS2
metering, the most advanced technologies being rolled out, with a
setup that will give our home and business customers greater
insight and control over their energy use;
-- Strategic partnerships - we have developed a platform to
accelerate innovation and bring new products and services to market
faster for the benefit of our customers - through a range of
partnerships in academia and business; and
-- People - we have assembled a talented team to achieve these
goals; our new Executive team, in--house digital expertise,
modernised customer care and marketing leadership will accelerate
our ability to deliver on our growth plans.
Our established knowhow and integrity means our customers can be
confident that their energy future is in good hands.
2017 Highlights
2017 was a transitional year as we began to reshape our business
to capture this opportunity for the benefit of our people,
customers and shareholders. We still delivered solid financial
performance and saw a growth in revenue, customer numbers and gross
profit in line with our expectations for the year.
Our business volumes increased by over 46%, as we continued to
take market share, and invest in the teams and propositions to
deliver in this sector.
We have remained a market frontrunner in decentralised clean
energy for over 15 years and have increased our market share to 18%
of the FiT market, through improved service and better
partnerships, and expect to continue to grow in this sector.
We invested in a new customer billing engine to allow us to
unlock the power of SMART metering, key to delivering in this new
decentralised market. Its launch was not without glitches, but we
learned valuable lessons and now have great confidence in its
performance, and our investment for the future.
We continued to release value from the generation assets we
developed, selling Newton Downs solar farm for consideration of
GBP5.83m for a pre tax profit of circa GBP0.75m.
This solid performance has set us up well for 2018.
2018 Trading Update
The impact of rising wholesale costs drove our decision to
implement a price rise earlier than in prior years and in addition
there was an increased benefit from the unseasonably cold
winter.
Retail customer numbers have remained stable in the year to
date, with churn trends as predicted following our annual price
review. Our new billing infrastructure is working as planned, with
99% of customers now billed on time.
The sale of our large--scale solar energy asset remains on track
to complete later this year. There was strong uptake for the
extension of our original Bond at a lower coupon rate of 4.25%.
2018 Expectations
Profit is expected to be weighted towards the first half of the
year, particularly so following the unseasonably cold winter. We
will be increasing investment in key growth areas of the business
in the second half:
-- Sales team - business sector focus, investing in increasing
awareness of the brand in the business market and accelerating new
customer acquisition
-- Digital and developer capability - a new Good Energy app is
launching in Q3 2018, that will be the foundation for our SMART
customer service
-- Retail customer relationship management - investing in
modernising our customer experience across our customer base of
consumers, prosumers and generators.
Overall we continue to expect 2018 to be a year of financial
progress for the group.
Good Energy Strategy - 2018 and Beyond
The old energy model of production is evolving to a new
generation of energy services, with customers and technology
driving this change. We believe this is an opportunity to invest
further in our proven capability and skill sets, to lead into this
new energy world
Energy Awakening - An Evolving Good Energy Customer
Our target market is broadening, based on our market research.
Caring about ethics and the environment is not just for "Eco
Warriors".
A growing number of "Eco Worriers" want to be part of a movement
to "do the right thing", but in a way that is straightforward and
efficient; the customer experience is therefore crucial. A broader
proposition using digital technology to deliver simple,
straightforward service is the answer.
Beyond ethics and the environment, energy is becoming tangible
in the home and in the boardroom too.
Costs are rising; there are myriad suppliers to choose from, and
while it is easier than ever to switch, it's more confusing
too.
Based on our research, households and businesses want guidance
and clarity, as they seek to monitor and manage their energy
consumption, and any energy they may have surplus. Good Energy is
well--positioned to respond to this changing market. Through
investing in a personalised energy planning services approach, we
are able to optimise energy usage, with the view to a low--waste
power environment.
With this attitude in mind and the opportunity that digital
services and SMART technologies are creating, Good Energy believes
that its potential addressable market could grow further to be one
in five business and retail customers. There will still be a heavy
focus on price with some customers in these markets, but an
increasing number of customers look beyond prioritise
environmental, efficiency and service considerations before price
when choosing an energy supplier. This is a market we can grow and
compete in profitably.
We currently supply over 70,000 homes and less than 1% of the
business market. We believe that the potential market is one in
five, who may be interested in Good Energy. Instead of fighting for
a big share of a small market, we will engage a small share of a
bigger market, with technology, service and the fundamental ethics
of the company - powering a cleaner, greener world. We are now
investing in both technology and people to deliver this vision.
Technology
Whilst SMART meters are the foundation of this new energy
market, it is the data they produce, distilled at the right time,
securely, with the required permissions, that provides real
customer value.
Data will empower consumers of all types to understand the
potential value of investment in new technologies like energy usage
control, storage, electric vehicles and renewable energy.
Our clarity of purpose, and the trust customers already place in
us to do the right thing mean Good Energy is perfectly placed to
help customers navigate, manage and benefit from this new world of
connected energy, which we will achieve by investing in three core
areas:
-- Strategic partnerships - high--profile strategic
partnerships, with leading lights in industry, technology and
research, to deliver new customer propositions. We are already
collaborating with Honda, the Eden Project, Salford University and
the London School of Economics.
-- Innovation and invention - in--house intellectual property
generation to create and build new systems and methodologies, which
influences change whilst ensuring that our customers benefit from
the derived value.
-- New revenue models - evolving to a subscription service model
as we facilitate the technology for our customers, shifting
reliance away from energy margins in the longer term.
People
People are key to delivering this change for Good Energy.
Reshaping our senior team to provide the right leadership and
expertise to help Good Energy to match the change and the
challenges in the energy market, to drive both our technology
capability and customer experience.
David Ivell joins Good Energy as Chief Technology Officer,
effective June 2018.
David was Chief Information Officer at The Prince's Trust, where
he was responsible for technology transformation. David also held
similar posts at Kew Royal Botanical Gardens, the British Film
Institute and Credit Suisse. David's expertise will help to deliver
Good Energy's new digital strategy, driving the investment into new
technologies and systems to improve our digital products and
services, operating systems and the customer experience.
Sarah Morgan joins as Customer Services Director, effective June
2018. Sarah comes to Good Energy from Ovo, where she was Customer
Services Director. Before that, Sarah was part of the team that
transformed the digital customer experience at ASOS.
Sarah brings her digital and customer expertise to support Good
Energy and will focus on delivering a consistently high level of
customer service and experience, building long--term engagement and
trust.
Paul Tavener joins as Interim Marketing Director, effective May
2018. Paul brings proven experience from the retail sector, most
recently in his role as Group Brand Director at WHSmith. Paul led
Funky Pigeon's UK launch and was previously Head of Marketing at
Sainsbury's, where he delivered the 'Try Something New Today'
campaign. Paul brings his extensive customer marketing experience
to develop the Good Energy brand and to develop customer--focused
campaigns.
The appointment of these three roles completes the senior
leadership appointments and new strategic structure for the
executive team at Good Energy.
The Board is also shifting, following the appointment of Tim
Jones, Chief Information Officer of moneysupermarket.com to the
board as NED in December 2017. We are well progressed in our search
for an additional NED with technology and disruptor brand
experience and we will provide further updates on this appointment
over the summer.
As previously announced, Rick Squires steps down from the Board
today. Good Energy thanks Rick for his expertise, insight and
support; we wish him the best in his future endeavours
Summary
Following a solid 2017 performance and a strong start to 2018,
we continue to reshape Good Energy, reflecting our view of the
changing market, the challenges and the opportunities for Good
Energy's future. Technology, changing customer behaviours and
attitudes, and the people making up the Good Energy team mean we
can continue to lead the shift from old energy to new
generation.
In closing, I would like to thank all of our people, customers
and shareholders for their continuing support of Good Energy
through this exciting period of transition. Our next update to the
market will be for our interim results in September 2018, for the
6--month period ended 30 June 2018.
--ENDS
Enquiries:
Good Energy Group PLC
Juliet Davenport, Chief Executive Tel: +44 (0)1249 766795
Charles Parry, Investor Relations
Investec Bank plc (Nominated advisor)
Jeremy Ellis Tel: +44 (0) 20 7597 5970
Sara Hale
Alexander Ruffman
Smithfield (Financial PR)
Alex Simmons Tel: +44 (0) 20 3047 2543
Brett Jacobs
Notes to editors:
-- Good Energy is a pioneering clean energy company, powering
the choice of a cleaner, greener future together with its people,
customers and shareholders. Having led the way in renewable energy
development since 1999 in areas including small and larger scale
wind turbines, solar panels, biogen and hydro, and now in
technologies like battery storage and electric vehicles, Good
Energy is making it easier for people and businesses to make
renewable energy part of their lives.
-- Good Energy powers homes and businesses with 100% renewable
electricity from a community of over 1,400 UK generators and owns
and operate two wind farms, including the UK's first commercial
wind farm, and six solar farms. In addition, Good Energy offers a
green gas product which contains 6% biomethane - gas produced here
in the UK from food waste. To make it completely carbon neutral,
emissions from the rest of the gas its customers use is balanced
through supporting verified carbon-reduction schemes in Malawi,
Vietnam and Nepal.
-- Established to tackle climate change and help deliver energy security for the UK.
-- Founded in 1999 by Juliet Davenport OBE.
-- A British company based in Chippenham, Wiltshire.
-- Good Energy's electricity comes from local, natural sources like sunshine, wind and rain.
-- In 2017 Good Energy's generation output was 87.6GWh (2016: 80.7GWh).
-- As at 30 December 2017, Good Energy had over 250,000 domestic and business customers.
Twitter: twitter.com/goodenergy
Facebook: facebook.com/goodenergy.co.uk
Instagram: Instagram.com/GoodEnergy
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END
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