Utilitywise plc Change to payment terms with existing supplier (4916D)
October 27 2015 - 2:00AM
UK Regulatory
TIDMUTW
RNS Number : 4916D
Utilitywise plc
27 October 2015
27 October 2015
Utilitywise plc
("Utilitywise" or the "Group")
Favorable change to payment terms with existing supplier
Utilitywise plc (AIM:UTW), the leading independent utility cost
management consultancy, is pleased to announce an important and
immediate change to its existing payment terms with a key energy
supplier.
Following ongoing discussions, the supplier has agreed to amend
its terms such that any extension secured on a contract that has
not expired receives the same payment terms as a new customer
would, in this case 80% on the extension signing and 20%, subject
to the normal reconciliation process at the end of that contract.
We have also agreed that this change of terms will apply to
historic accrued revenue balances and hence we have as of today
received GBP3.6 million in cash from the supplier. This amount
represents approximately 13% of the accrued revenue balance due
within one year at 31 July and approximately 13% of the accrued
revenue balance due after one year at the 31 July.
As a result of our strengthening supplier relationships and the
prevailing energy price environment, the length of the contracts we
are securing for our customers has increased. Whilst the Group
remains focused on acquiring new customers to drive growth, we have
also prioritized securing existing customers on longer contracts
with their incumbent energy suppliers, either as renewals or
extensions to the initial contract. Historically our supplier
payment term for this contract revenue was delayed until the
extended period had commenced and was booked to accrued revenue on
the balance sheet.
Discussions are ongoing with all of our key energy suppliers to
amend payment terms to reflect the changing way that we are doing
business, with the aim of agreeing revised terms resulting in the
receipt of payment for renewals and contract extensions in a
similar way to the revised terms detailed above
Geoff Thompson, Chief Executive of Utilitywise, commented:
"Securing this change to more favorable payment terms
demonstrates both the strength of the relationships we have with
our key suppliers but also our ability to meet changing market
sentiment.
The recognition by our supplier to treat a contract extension in
the same way it does for a new customer acquisition is very
positive and addresses a concern that the revenue was being booked
in advance of the payment of our commissions. It has also resulted
in a cash payment to the Group of GBP3.6 million, with a
consequential reduction in our accrued revenue balance of the same
amount.
Whilst this amendment to payment terms with one of our major
suppliers is very welcome, we are in ongoing discussions with all
our other key energy suppliers and will update the market as and
when we are in a position to do so."
For further information:
Utilitywise plc 0330 303 0233
Geoff Thompson (CEO)
Jon Kempster (CFO)
finnCap (NOMAD and broker) 020 7220 0500
Matt Goode/ Grant Bergman (Corporate
Finance)
Simon Johnson (Corporate Broking)
Liberum (Joint broker) 020 3100 2000
Robert Morton/ Steve Pearce
Redleaf Communications 020 7382 4763
Emma Kane/ Richard Gotla
About Utilitywise
Utilitywise is a leading independent utility cost management
consultancy based in North Tyneside. The Group has established
trading relationships with a number of major UK energy suppliers
and provides services to its customers designed to assist them in
achieving better value out of their energy contracts, reduced
energy consumption and lower carbon footprint.
Businesses large and small rely on Utilitywise for their energy
management needs. Clients range in size from single site SME's to
multinationals with thousands of sites and cover the whole of the
UK. In total, Utilitywise has over 27,000 customers.
Utilitywise is a UK company quoted on the AIM market of the
London Stock Exchange. For more information, please visit
www.utilitywise.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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