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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Good Energy Group Plc | LSE:GOOD | London | Ordinary Share | GB0033600353 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -4.00 | -1.56% | 252.00 | 252.00 | 254.00 | 256.00 | 253.00 | 256.00 | 23,017 | 16:35:13 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Electric Services | 254.7M | 8.49M | 0.5112 | 4.95 | 42.02M |
From May 2019 to May 2024
TIDMGOOD
RNS Number : 0169A
Good Energy Group PLC
21 March 2017
Preliminary Announcement
Good Energy Group PLC
("Good Energy" or "the Company")
Un-audited Preliminary Results for the 12 months ended 31 December 2016
Robust performance in a competitive market
"In 2016, Good Energy delivered growth of 41% in revenue, 29% growth in gross profit and 41% growth in operating profit while managing the challenges of an increasing competitive UK energy market and volatile wholesale energy market."
"By being a customer focussed organisation, Good Energy has created a business model that is delivering financial returns for our shareholders, allowing us to invest in our people and systems, and deliver on our purpose."
"Securing power is a key focus for Good Energy as the Company continues to grow, and today I am pleased to announce our partnership with DONG Energy to source offshore wind power for our customers for the first time."
"Good Energy has seen significant growth in customer numbers and financial scale over the last five years and has maintained its gross margin and customer satisfaction throughout this period. 2017 is an exciting year as we look to complete the implementation of the new customer information and billing system. This allows the Company to grow its customer base, explore different marketing channels for growth and provide a platform to launch new products and deliver economies of scale, driven by a deep understanding of our customers and focussed on ensuring we offer them great long term value."
"There are opportunities to deliver further efficiencies in both its costs to serve and in our overhead costs, by simplifying our processes and structures and this will be a strong focus for 2017. The Company has recently completed a strategic review of its operating model and the senior leadership structure required to support it. This impacts on the requirement for some senior roles and will mean that David Brooks, Managing Director - Supply, will leave Good Energy on April 7(th) . We would like to thank David for the significant contribution he has made since joining Good Energy and wish him all the best."
"I would like to thank everyone at Good Energy for their hard work and support in 2016, and look forward to working with you all in 2017."
Juliet Davenport OBE, Chief Executive
Good Energy, AIM listed renewable electricity supplier and generator, announces its unaudited preliminary results for the 12 months ended 31 December 2016.
Year ended 31 December 2016 2015 Change ------------------------ --------- --------- ---------- Revenue GBP90.4m GBP64.3m 41% ------------------------ --------- --------- ---------- Gross Profit GBP27.5m GBP21.3m 29% ------------------------ --------- --------- ---------- EBITDA GBP10.1m GBP7.3m 39% ------------------------ --------- --------- ---------- Profit before tax GBP1.4m GBP0.1m +GBP1.3m ------------------------ --------- --------- ---------- Cash balance GBP6.3m GBP4.8m +1.5m ------------------------ --------- --------- ---------- Net debt GBP52.2m GBP54.0m -GBP1.8m ------------------------ --------- --------- ---------- Basic (loss)/earnings per share 9.1p (1.4p) +10.5p ------------------------ --------- --------- ---------- Final dividend per share 2.3p 2.3p No change ------------------------ --------- --------- ---------- Full year dividend per share 3.3p 3.3p No change ------------------------ --------- --------- ----------
Key highlights
Hot Features
Premium
-- Growth in all areas of the business year on year, with particularly strong growth in supplies to business
customers and within the Feed-in-Tariff (FIT) business.
-- Increased business volumes and FIT growth, with lower domestic electricity and gas numbers, as the
Company reduced marketing activity in the second half of the year as it implemented its new customer
information and billing system ("Customer System").
o Electricity customer numbers up 5% to 71,486 (2015: 68,000).
o Gas customer numbers up 14% to 44,107 (2015: 38,800).
o FIT customer numbers up 18% to 133,012 (2105: 112,600).
o Business customer sales volumes up 96%.
-- Overall profit before tax increased to GBP1.4m from GBP0.1m due to strong performance in the supply business, as
well as the sale of Wrotham Heath at a profit of GBP0.5m.
-- Generation export increased 5% with the benefit of full year output from its solar sites, partially offset by lower
wind output than in 2015.
-- The sale of the 5MW Oaklands solar site to Eneco UK Limited was agreed in December 2016 for GBP5.8m, and
the deal completed on 3 January 2017, with the net profit to be recognised in the 2017 financial year. Good
Energy also connected the 5MW Newton Downs solar site just before the end of 2016, and expects to
connect the 5MW Brynwhillach solar site before 31 March 2017.
-- The Company's net debt position improved over the year due to increased cash generation and the repayment
of principal over the period. Good Energy also increased its overdraft facility with Lloyds Bank from GBP5.0m to
GBP7.5m, recognising the Company's growth and providing flexibility to support the seasonality of cash flows.
This had GBP0.7m drawn against it as at 31 December 2016.
-- In 2016, the Company implemented the first phase of the Company's Customer System, as well as
relaunching its customer website and launching Selectricity. Good Energy's focus for 2017 is to complete the
rollout and fully implement its Customer System to provide a strong platform for customer growth, improve
customer experience and investigate new revenue channels as the UK energy market continues to evolve.
-- Good Energy's focus on efficiency will provide the Company with a more efficient core operating business
creating the capacity to invest in our Smart programme, and in opportunities for growth in future revenue
channels to support the Company's changing customer demands.
For enquiries:
Good Energy Group PLC +44 (0) 1249 766 795
Juliet Davenport, Chief Executive Officer
Denise Cockrem, Chief Financial Officer
Camarco (Financial PR Adviser) +44 (0) 203 757 4980
Geoffrey Pelham-Lane
Georgia Edmonds
Arden Partners plc (Nomad and Joint Broker) +44 (0) 121 423 8900
Steve Douglas
Patrick Caulfield
Investec Bank plc (Joint Broker) +44 (0) 207 597 4000
Jeremy Ellis
Sara Hale
Good Energy Press Office
Luke Bigwood +44 (0) 1249 478358
Notes to editors
-- Good Energy is a fast growing, 100% renewable electricity supply and generation company, offering award-winning customer service.
-- An AIM-listed PLC, and founder member of the Social Stock Exchange, its purpose is to support change in the
energy market, address climate change and boost energy security.
-- The Company has been awarded 4 out of 5 stars by Which? for customer service in 2016 and 2017 and has been voted the best energy company for customer service by users of MoneySavingExpert.com for three consecutive polls.
-- As at 31 December 2016, Good Energy has 71,486 renewable electricity customers and 44,107 carbon neutral gas customers. It also provides Feed-in Tariff administration services to 133,012 sites, totalling 248,605.
-- 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 seven solar farms.
-- Good Energy received an average customer advocacy of 45. A net promoter score is an index ranging from -100 to 100 that measures the willingness of customer's to recommend a company's products or services to others. It is used as a proxy for gauging the customers overall satisfaction with a company's product or service and the customer's loyalty to the brand.
-- Good Energy has won a number of awards, including Renewable Energy Association Company of the Year Award 2016, Business Green Company of the Year 2015, and was named Social Impact Company of the Year at the 2014 and 2015 Small Cap awards.
Chairman's Statement
In 2016, Good Energy delivered a robust financial performance in line with market expectations and increased customer meter numbers and engagement, while continuing to invest in the Company to achieve its purpose to tackle climate change in the UK.
Revenue rose 41% to GBP90.4 million on 13% customer meter growth; operating profit grew 41% to GBP6.0 million and profit before tax increased from GBP0.1m to GBP1.4m, delivering basic earnings per share of 9.1 pence.
Climate change remains a priority for the developed and developing world with 129 countries ratifying the 2015 Paris Climate agreement including the UK, USA, China and India. The UK has now taken the next steps and approved the fifth carbon budget.
In the UK, there continues to be high levels of public support for renewables, and in 2016 wind generated more electricity than coal. There is continued Government support for innovation in the UK energy market and the recent alignment of energy and business strategy in the Business Energy and Industrial Strategy Department (BEIS) means there should be a more joined up approach from policy makers.
As the UK energy market evolves, Good Energy continues to invest in the Company. The focus for 2016 has been to improve our digital capabilities. This year we updated our customer website and delivered the first stage of our new customer information and billing system (Customer System), with additional Customer System rollouts planned throughout 2017. This combination will allow Good Energy to reduce cost, deliver an improved customer experience, test new marketing channels for investment for growth and support the Company's roll out of the Smart Metering program.
In the final quarter of 2016, the UK energy market experienced a period of heightened volatility, driven by a number of internal and external market factors, which in part led to the collapse of GB Energy. While Good Energy is not immune from these conditions, our vertically integrated business model, together with a prudent hedging policy, helped to mitigate the impact of these factors, enabling the Company to deliver a profit before tax of GBP1.4m, in line with market expectations.
Good Energy was set up to help people tackle climate change through their choice of energy supplier, and we remain a purpose and customer led organisation. We demonstrate this through our continued commitment to 100% certified renewable electricity and our launch, in 2016, of a carbon neutral gas offering; our customer advocacy or average net promoter score (NPS), of 45; and our oversubscribed retail share offering where we welcomed over 1,800 shareholders from its GBP3.1m share raise in June 2016.
In 2015, Good Energy outlined growth targets that would be built off a combination of improving efficiency and developing customer focussed propositions and innovation. In 2016, the Company continued to make strides to prepare itself for further growth through continued investment in systems, and generation portfolio, the launch of Selectricity and our successful share raise, as highlighted in the 2016 Progress Report.
Good Energy recognises that its growth target is ambitious. While other market participants have delivered high growth rates through low pricing, this comes with risks. Good Energy's focus is on growing profitably through efficiency, new propositions and innovation, all underpinned by an understanding of our customers' needs. Through profitable growth Good Energy will deliver 100% renewable and carbon neutral solutions to more UK customers, further reducing the UK carbon foot print in line with the Company's purpose.
Therefore, the Board has concluded that it is more appropriate to express its ambition in terms of delivering sustainable profitable growth and enhanced customer service, as this is more aligned to our focus on delivering increased shareholder value. As a result, Good Energy will look to streamline its operating model to drive further improvements in costs to serve, above and beyond that which comes from economies of scale from additional revenue growth, which has meant some changes in our senior leadership team and will mean that David Brooks, Managing Director - Supply, will leave Good Energy on April 7(th) . We would like to thank David for the significant contribution he has made since joining Good Energy and wish him all the best.
In line with this focus, Good Energy continues to invest in the leadership and capability of our management team and Corporate Governance. Ensuring the team has the right skills and capability to support our employees is key in order to us to achieve our ambitions, and the Company continues to shape and develop this as we grow and mature.
Francesca Ecsery has informed the Board of her intention to step down as a Non-Executive Director over the coming year. As part of ongoing succession planning, the Nomination Committee has commissioned a search for a new Non-Executive Director and this is well-advanced. Francesca will remain a member of the Board until her successor is appointed. Francesca joined the Board in 2012, since when the Company has benefited from her consumer expertise and strategic counsel. The Board would like to thank Francesca for her valuable contribution and wishes her well in the future.
In addition, Good Energy has made good progress in 2016 on our Corporate Governance practices. This combination is key to the future success of Good Energy.
We have had an encouraging start to 2017 with the completion of the sale of Oaklands and trading in line with current market expectations.
The UK Energy market remains an attractive sector, with exciting opportunities in the future, and Good Energy continues to deliver sound financial, operational and strategic performance. This would not have been possible without the commitment of all of Good Energy's employees, and the continued support from our customers and shareholders. On behalf of the Board, I would like to thank you all.
Strategy Review
In 2015, we set a five year growth ambition which was expressed in terms of achieving a target number of customers (household equivalents). The Board has now concluded that it is more appropriate to express its ambition in terms of delivering sustainable profitable growth and enhanced customer service, as this is more aligned to our focus on delivering increased shareholder value.
In 2015 and 2016, we have focused on building the capability and systems required to support the delivery of sustainable profitable growth, through strengthening our capability in sales & marketing, and with the investment in systems, including the first stage roll out of our new Customer System in January 2017. One of the focuses for 2017 and beyond is to streamline the operating model of the business and to drive further improvements in costs to serve above and beyond that which comes from economies of scale from additional revenue growth.
Initiatives are underway to simplify the operating model and to align it to support the strategic focus of the business. These changes reflect the focus on continuing to grow the supply business, building on our strong customer franchise and a change in the focus for our generation business, where we will move away from looking at new developments and instead deliver security of renewable energy supply from partnering with other providers and introducing new sources of renewable energy into our mix.
As a consequence of these changes, we will deliver improved efficiencies, enhanced customer service, focussed risk management and create the capacity to invest in areas where we see opportunities for further growth.
Our ambition, and these initiatives, are supported by our strategic pillars of: driving down cost to serve, improving customer experience; building a platform for 2020 growth; creating compelling and differentiated propositions; and driving scale, brand awareness and profitability.
Over the period, the Company has continued to make progress towards delivering on our ambitions in each of the strategic pillars.
Strategic Pillar 2016 Progress
------------------------------------- --------------------------------------
Drive down cost to serve, Implementation of a new finance
improve customer system, improved
experience customer experience with
investments in new CIS
system, middleware and website
------------------------------------- --------------------------------------
Build a platform for 2020 Sold the 5MW Wrotham Heath
growth solar site for GBP0.5m
profit and announced the
sale of Oaklands solar
site for GBP5.8m, reinvesting
the proceeds into our
development portfolio, appointed
Head of Digital
Marketing and Brand
------------------------------------- --------------------------------------
Create compelling and differentiated Launched Selectricity, published
propositions our first Progress
Report on environmental performance,
launched
Green Gas
------------------------------------- --------------------------------------
Drive scale, brand awareness Connected Newton Downs solar
and profitability farm, REA
customer service and company
of the year awards,
successfully completed an
oversubscribed customer
share offer
------------------------------------- --------------------------------------
The UK energy market is competitive. In 2007 there were eight active domestic suppliers, by the end of 2016 this had risen to 50, an increase of over 500%. Good Energy has always sought to differentiate itself in the market, not just by offering 100% certified renewable electricity, but through our focus on the customer and our people. We continue to see demand in the UK energy market for ethical companies that offer a value based proposition for sustainable energy.
Since 2014, the UK's renewable, cumulative installed capacity has increased by 35% to over 33GW. While the trajectory of renewable generation growth may flatten in the short to medium term as a result of changes in Government policy, the UK renewable energy market continues to evolve due to the:
-- decreasing cost of renewable generation and battery storage; -- electrification of heat and transport networks; -- roll out of Smart Meters; and -- sustainability ambitions of large corporates as demonstrated by the RE100.
These trends, combined with Good Energy's customer focus, Feed-in-Tariff (FIT) customer base and competitive advantage, present opportunities. In order to take advantage of these opportunities, Good Energy will continue to focus on our strengths, efficiencies and customers relationships.
A key component of improving Good Energy's efficiency and customer relationships will be expanding our digital footprint.
With the first phase of the Customer System in place, Good Energy is focussed on implementing the next phases through 2017. Once the Customer System is fully operational, Good Energy will be able to test different marketing channels, enhance our customer experience, offer innovative tariffs to the market and drive internal efficiencies.
Good Energy's brand, compelling proposition and history of innovation mean that the Company is well placed to provide personalisation to its different customer segments and develop tech savvy propositions for its customer base. Good Energy is trusted by its customer base, and new smart technology is an area in which over 25% of Good Energy customers surveyed have said they are interested in.
Key Performance Indicators
Good Energy measures its progress with a number of key performance indicators (KPIs). We have highlighted nine KPIs across the four key areas of Customer, Operations, Financial and People, which enable us to report on and track our progress. In 2016 we added the ratio of revenue to employees to the Operations KPIs, and operating margin to the Financial KPIs.
Customer
Customer KPIs monitor how the Company is delivering its growth strategy, as well as customer advocacy and focus on growth, annualised average customer churn and average NPS.
Customer KPIs 2016 2015 -------------------- ------ ------ Net customer meter growth 13% 44% -------------------- ------ ------ Average annualised <8.5% <8.0% churn -------------------- ------ ------ Average NPS 45 42 -------------------- ------ ------
2016 net customer growth was lower than 2015, due to the Company taking the decision to slow its growth in the final quarter of 2016 as the first phase of the Customer System was implemented, and the impact of the Big Deal customers who joined Good Energy as part of the 2015 collective switch.
The collective switch in November 2015 was the first by Good Energy, adding approximately 10,000 customers. It presented Good Energy with an opportunity to test and learn about collective switching as we look to grow in the future. As expected, the collective switch customers did see higher churn, as the business model of collective switching agents is to continually switch customers. Good Energy will be considering how to use collective switches in the future, depending on the final outcome.
The impact of the collective switch customers and lower growth meant that our average annualised customer churn for domestic customers rose slightly for the 2016 period, to below 8.5% from less than 8.0% in 2015.
NPS measures how likely a customer is to recommend Good Energy, our products and services. It is a key indicator of customer advocacy, and Good Energy is extremely proud of the increase in our average NPS score from 42 to 45.
Operations
Operational KPIs focus on the efficiency of the Company. While internally we continue to monitor cost to serve and cost per acquisition, we also monitor administration cost (including depreciation and amortisation) growth and the ratio of revenue per employees, which enables us to review performance and assess operational efficiency.
Operations KPIs 2016 2015 -------------------------- -------- -------- Administration cost (including depreciation and amortisation) growth 27% 14% -------------------------- -------- -------- Revenue per employees GBP284k GBP233k -------------------------- -------- --------
Administration cost (including depreciation and amortisation) growth should be compared with gross and operating profit growth to understand how growth in the business is being supported.
Over the period, Good Energy has grown gross and operating profit 29% and 41% respectively, while administration costs have only grown 27%. The 2016 administration cost growth is a mix of:
-- 12% variable and semi-variable overheads; -- 6% costs associated with investment for growth as the Customer System; and -- 9% for other fixed overheads.
The increase in growth of operating profit, compared to gross profit, implies that Good Energy is leveraging our cost base.
The ratio of revenue per employees is compared to our average NPS to make sure that the balance between efficiency and customer advocacy is appropriate.
This is the first time we have outlined this figure and in 2016 this implied a ratio of GBP284k per employee, an improvement of GBP51k per employee on 2015, and is particularly pleasing given the increase in average NPS over the period.
Financial
Financial KPIs focus on the profitability of Good Energy, as the Company seeks to deliver profitable growth to our stakeholders.
Financial KPI's focus on revenue growth, gross and operating margins.
Finance KPIs 2016 2015 ------------------ ----- ----- Revenue growth 41% 12% ------------------ ----- ----- Gross margin 30% 33% ------------------ ----- ----- Operating margin 7% 7% ------------------ ----- -----
2016 has seen robust revenue growth, a decrease in gross margins and maintenance of our operating margin.
Revenue growth was driven by the full year impact of the 2015 collective switch customers, growth in FIT customers and business volumes.
Our 2016 gross margin decreased due to an increase in lower margin business customers, reduced wind output and volatile trading conditions in Q4 2016.
Our operating margin was maintained as the Company grew and invested for the future.
People
People KPIs focus on Good Energy employee engagement. This is an important factor, as we look to attract and retain the best people to support our customer service proposition and achieve our ambitions.
People KPIs 2016 2015 --------------------- ----- ----- Employee engagement 82% 78% --------------------- ----- -----
As a customer focussed organisation, it is critical that our employees are engaged and feel a connection to the Company's values, purpose and strategy.
In 2015, Good Energy performed its first employee engagement survey. The survey included Gallup 12 questions, which are used by the Times Top 100 Companies, and gives the Company information to benchmark itself with other organisations across different industries and identify areas for improvement. We have used the feedback to help us improve in certain practical areas like working environment, systems and training, and we are pleased with the improvement between 2015 and 2016.
Chief Executives Review
In 2016, Good Energy delivered growth of 41% in revenue, 29% in gross profit and 41% in operating profit, while managing the challenges of an increasingly competitive UK energy market and volatile wholesale energy market.
By being a customer focussed organisation, Good Energy has created a business model that is delivering financial returns for our shareholders, allowing us to invest in our people and systems, and deliver on our purpose.
Good Energy's key competitive advantage can be split into five areas:
-- Our story and brand - since 1999 we have been offering customers the opportunity to combat climate
change through their choice of energy supplier;
-- Our green credentials - we offer 100% certified renewable energy and carbon neutral gas; -- Our customer focus - affordable energy delivered with excellent customer service; -- Our people and values - through our employee engagement score; and
-- Our track record in innovation - since our inception we have successfully launched HomeGen, Renewable
Heat Incentive Scheme and Selectricity.
These provide the basis for the future growth of Good Energy.
Supply
In 2016, total customer meter numbers grew 13% to 248,605 (2015: 219,479), with electricity customer meters growing 5% to 71,486 (2015: 68,024), gas customer meters growing 14% to 44,107 (2015: 38,838) and FIT customer meters up 18% to 133,012 (2015: 112,617).
While total customer meter growth in 2016 was lower than 2015, Good Energy delivered significant growth in business supply volumes of over 95% and added over 20,000 new FIT customers in 2016.
During the year, the UK experienced heightened volatility in the short term UK power trading market due to several market factors, including unplanned maintenance work with French nuclear plants combined with lower than normal renewables generation and some irregular generation activities. As an electricity trader, Good Energy was operating in this challenging market. However, the Company's risk management and hedging policy mitigated the impact on the Company.
To support our growth, Good Energy has continued to invest in systems with over GBP1.7m invested in our Customer System and the relaunch of our customer website to improve our customers' experience and people with the appointment of Hannah Darby as the Head of Digital, Marketing and Brand.
Further phases of the Customer System will be implemented through 2017 and, once complete, Good Energy will have a system that is capable of driving scalable growth and internal efficiencies. The system will also allow Good Energy to test new marketing channels and assist us to meet our Smart obligations, as well as offering a platform for future customer propositions.
Good Energy's growth targets are ambitious. While UK energy market participants have traditionally used price as the primary driver for growth, the consequence of this has caused some companies to exit with volatile market conditions.
In order to achieve our ambitions and deliver on our purpose, Good Energy needs to protect and grow its core business, build momentum in new business, and generate future business opportunities. All of this is underpinned by developing deeper relationships with our customers.
Good Energy recognises that growth will be in an evolving UK energy market, but this is nothing new for us. Good Energy is well placed to protect and grow our core business with our vertically integrated business model, customer focus, brand, green credentials, trading capability and track record of innovation.
The Company has identified the following three areas to build momentum in new business and generate future business opportunities. These are:
-- battery storage - developing and delivering propositions for our business customers and renewable
generators;
-- electric vehicle network development - to enable customers to be able to experience the full benefits of
electric vehicles (EVs); and
-- green business consultancy - traditionally not a target audience for Good Energy to supply, due to their large
size or operating domain, but with our commitment to reducing carbon with our expertise in trading and
generation, we are well placed to support businesses looking to meet their sustainability goals.
These areas play to Good Energy's competitive advantages and will support the Company's growth ambitions, as well as lowering the UK's carbon footprint, which is our purpose.
Alongside Good Energy's robust 2016 financial performance, the Company has also increased its average NPS and employee engagement KPIs. As a customer focussed organisation, these KPI's are important. They provide feedback on customer advocacy and how Good Energy employees are engaged with our purpose and values, and it is heartening to see the increase in these measures over the year.
Generation and development
In 2016, Good Energy continued to develop, manage and review its wind and solar generation sites to both secure access to long term power, and realise value where appropriate, enabling us to reinvest in our portfolio.
Export from Good Energy owned sites increased 5% to 80.7GWh in 2016, from a portfolio of 52MW made up of solar (35MW) and wind (17MW) assets. While wind output was down approximately 16% compared to 2015 due to lower wind resource, solar output increased 54% due to full year production from sites connected part way through 2015.
Good Energy continued to develop and actively manage our generation sites to both secure access to long term power, and realise value where appropriate, to enhance returns. During 2016, we have been constructing two 5MW solar sites with Newton Downs connected at the end of the year and Brynwhillach expecting to be connected before the end of March 2017.
Good Energy successfully sold Wrotham Heath pre construction to Trina Solar Group for a profit of GBP0.5m in 2016, and agreed the sale of our 5MW Oaklands solar site to Eneco UK Limited for GBP5.8m in December 2016, with the transaction completing in January 2017.
Oaklands was the first sale of a site fully constructed and developed by Good Energy and clearly showcased the capabilities of our generation team. Good Energy will continue to provide management services to Oaklands, and we retain an option to purchase up to 50% of the site's power.
Over the short to medium term, Good Energy will continue to develop its wind assets in Cornwall and Scotland, as well as to look to realise value from its existing solar development portfolio.
Good Energy was pleased with the conclusions of the Rt Hon Charles Hendry's independent review into the feasibility and practicality of tidal lagoon energy in the UK. The report concluded that tidal lagoons have a vital role to play in powering UK homes and businesses. Good Energy's investment in Swansea Bay Tidal Lagoon plc allows us to purchase up to 10% of the output from the scheme, and we look forward to the Government incorporating tidal lagoons into their industrial and renewable strategies in response to the 5th Carbon Budget.
Research partnerships and innovation development
Good Energy has a history of innovation.
In 2016, we continued this tradition with the launch of Selectricity, the UK's first peer to peer platform for buying and selling renewable electricity, enabling commercial customers and renewable generators to trade electricity online themselves. Selectricity commercialised following the successful trial in late 2015 and early 2016 between Open Utility and Good Energy.
In 2016, Good Energy signed a Memorandum of Understanding with the UK clean fuel company, ITM Power, and is supplying 100% certified renewable electricity to one of ITMs refuelling stations. We are also working with the Smart Fintry Project to deliver affordable sustainable energy to Fintry residents by enabling the purchase of power directly from nearby renewable energy generators.
As the UK energy market evolves, Good Energy will continue to develop innovative partnerships and projects to broaden our offering to customers.
Sustainable development goals
Good Energy is committed to serving all of its stakeholders, fulfilling our responsibilities to society and delivering sustainable returns to our shareholders, while also ensuring that the Company is a social and environmental force for good.
Like other progressive, values-driven businesses, Good Energy has undertaken some early work to consider the relevance of the United Nations Sustainable Development Goals (SDGs). For example, the Company has started to use the SDGs to inform the evolution of the Good Energy brand and to guide formal decision-making in the business.
Where Good Energy is considering doing something new or differently, we believe the SDGs can be a helpful reference point. Good Energy has also started to test the SDGs as a framework for external reporting as part of our most recent annual submission to the Social Stock Exchange.
Outlook
2016 was focussed on investment in systems to support the continued growth of the business, maximising the value of the generation assets and continuing to build capability in key areas of the Company.
The end of 2016 and the beginning of 2017 has seen price rises from a number of UK energy companies as a result of upward pressure on wholesale, regulatory and transportation costs.
In 2017 we will look to simplify our operating model, deliver further efficiencies in cost to serve, grow the supply business and reduced activity in our generation business. This will be done by continuing our digital journey with the full rollout of the Customer System, streamlining processes enabling us to invest in Smart and the areas where we see potential for growth in an evolving market place.
Chief Financial Officers Review
Financial performance overview
Good Energy has continued to deliver customer meter growth, albeit at a slower level than in previous years, as we focused on investing in new systems to support future growth, maintaining gross margins and realising value from its generation portfolio.
It delivered a profit after tax of GBP1.4m, up GBP1.3m on 2015 which was in line with market expectations. Revenue grew by 41%, reflecting the addition of Big Deal customers in the second half of 2015 and continued growth in generation revenue. Underlying customer growth was steady at 13%, and gross margin remained strong at 30%. Total assets grew by 10% reflecting the continued growth of the supply business. The Company had cash balances of GBP6.3m at the year end and borrowings were in line with 2015 levels at GBP61m.
Total administration costs (including depreciation and amortisation) grew 27%, with growth in variable and semi variable costs of 12%, investments for growth of 6% and an increase in fixed overheads of 9%.
Profit before tax of GBP1.4m was up GBP1.3m on 2015, with strong growth in profitability of 35% in the Supply Business.
Financial performance by segment
The Supply business delivered a profit before tax of GBP5.0m in 2016, up by GBP1.3m from 2015. Revenue grew by 41%, with gross margin down 1% to 28%. Overall customer meter numbers grew by 13%, with the underlying customer base (excluding the Big Deal) growing at 16%, reflecting continued strong growth in business customer volumes and an increase in the market share of our Feed in Tariff customer meters. Retention remained strong, as average annualised churn for domestic customers was below 8.5%.
In the period from the end of October to the end of November, we saw an exceptional level of volatility in power prices, reflecting lower supply as a consequence of the French nuclear generators being taken out of action, and lower wind generation than in previous years. Although we operate a prudent hedging policy, these exceptional trading conditions impacted the performance of the Supply business in this period and, together with the strong growth in lower margin business sales, contributed to the reduction in gross margin.
The Supply business generated a positive cash flow in 2016.
The Generation business delivered a loss before tax of GBP2.2m, compared to a loss before tax of GBP0.6m in 2015. This reflects lower wind output in 2016 than in 2015 and the removal of the benefit of levy exemption certificates (LECs) from 1st August 2015, which had a full year cost impact of GBP0.4m. Overall, Generation revenue grew by 5%.
The Development business reported a loss before tax of GBP0.6m, an improvement of GBP1.5m on 2015. The results for 2016 included a profit from the sale of Wrotham Heath of GBP0.5m and write offs of GBP0.2m. The 2015 results included profit before tax of GBP0.1m in relation to site sales, and a write-off of GBP0.6m for sites no longer to be developed.
As a result of the strategic review undertaken during 2015, the Development team has been reduced in size going forward to reflect the change in focus, with a reduction in investment in solar development anticipated in the future.
Financial position and financing
In 2016, we began the construction of two further solar sites with one connecting in December 2016 and the other expected to be completed ahead of the 31 March 2017 subsidy deadline. The sale of the 5MW Oaklands solar farm to Eneco UK Limited, with the option to purchase 50% of the power, reflects our strategic focus to optimise value from our renewable asset portfolio.
In March 2016 we agreed an increase in our overdraft facility with Lloyds Bank from GBP5.0m to GBP7.5m. This had GBP0.7m drawn against it as at 31 December 2016, but gives us flexibility to support the growth and seasonality of the cash flows of the business.
A new loan facility was also agreed with RBS to finance the investment in the new billing system. No further drawdowns have been made against the long term fixed rate funding facility.
Good Energy's 4-year bond, issued in November 2013, is due to mature in November 2017. The Company has the option to redeem this bond, replace it with another bond or roll on the bond for another 12 months, and is currently reviewing the most appropriate option. As a consequence of the existing bond's terms ending within the next twelve months, the facilities' outstanding balance of GBP14.8m has been reclassified as a current liability and the balance sheet, as a result, shows a net current liability position of GBP3.4m as at 31 December 2016, compared to a net current asset position of GBP5.8m in 2015. The balance sheet is expected to return to a net current asset position for the year ended 31 December 2017.
In June 2016, we launched a share offer which raised GBP3.1m gross, and was oversubscribed. This reflects our continued commitment to encourage customer ownership of the business. Following the share raise, the yearend gearing ratio for the business is 71% compared to 76% in 2015.
Good Energy continually reviews the funding requirements for the business to ensure that it can meet its strategic growth objectives with appropriate funding products, taking into account the cost of capital, duration and overall gearing levels.
In 2016, the Company implemented the first phase of our Customer System, and commenced investment in improving our digital capability. Good Energy's focus in 2017 is to complete the rollout and full implementation of the Customer System to provide a strong platform for customer growth, improve customer experience and investigate new revenue channels, as the UK energy market continues to evolve.
Good Energy has seen significant growth in customer meter numbers and financial scale over the last five years, and has maintained its gross margin and customer satisfaction throughout this period. There are opportunities to deliver further efficiencies in both our costs to serve, and our overhead costs, by simplifying our processes and structures, and this will be a strong focus for 2017. This will provide us with a more efficient core operating business, and create capacity for us to invest in our Smart program and in opportunities for growth in future revenue channels to support our changing customer demands.
Dividends
The Board's dividend policy is to ensure that there is an underlying dividend cover of at least three times in the Supply business and that any dividend payment, and the amount thereof, is balanced against the need to continually invest in the business for its long term growth.
The Board is pleased to recommend a final dividend of 2.3p per ordinary share.
Consolidated Statement of Comprehensive Income (Unaudited)
For the year ended 31 December 2016
2016 2015
GBP000's GBP000's
Unaudited Audited
REVENUE 90,437 64,281
Cost of Sales (62,905) (42,982)
GROSS PROFIT 27,532 21,299
Administrative Expenses (21,582) (17,065)
OPERATING PROFIT 5,950 4,234
Finance Income 18 23
Finance Costs (4,534) (4,129)
PROFIT BEFORE TAX 1,434 128
Taxation (51) (323)
PROFIT/(LOSS) FOR THE YEAR 1,383 (195)
TOTAL COMPREHENSIVE INCOME/(LOSS)
FOR THE YEAR
ATTRIBUTABLE TO OWNERS OF THE PARENT
COMPANY 1,383 (195)
Earnings/(loss) per share from profit
for the year - Basic 9.1p (1.4p)
- Diluted 8.8p (1.4p)
Consolidated Statement of Financial Position (Unaudited)
As at 31 December 2016
2016 2015
GBP000's GBP000's
Unaudited Audited
ASSETS
Non-current assets
Property, plant and equipment 58,247 60,984
Intangible assets 3,801 3,317
Long term security deposits 2,831 2,803
Investments 500 500
---------------- ---------
Total non-current assets 65,379 67,604
Current assets
Inventories 9,799 9,482
Trade and other receivables 16,204 11,598
Current tax receivable 167 126
Cash and cash equivalents 6,289 4,751
Current assets held for sale 5,095 -
---------------- ---------
Total current assets 37,554 25,957
---------------- ---------
TOTAL ASSETS 102,933 93,561
---------------- ---------
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital 825 748
Share premium account 12,546 9,786
EBT shares (1,015) (1,074)
Retained earnings 8,689 7,483
---------------- ---------
Total equity attributable to members
of the parent company 21,045 16,943
Non-current liabilities
Deferred taxation 684 567
Borrowings 40,277 55,911
---------------- ---------
Total non-current liabilities 40,961 56,478
Current liabilities
Borrowings 20,981 5,626
Trade and other payables 19,936 14,514
Current liabilities held for sale 10 -
Total current liabilities 40,927 20,140
---------------- ---------
Total liabilities 81,888 76,618
---------------- ---------
TOTAL EQUITY AND LIABILITIES 102,933 93,561
---------------- ---------
Consolidated Statement of Changes in Equity (Unaudited)
For the year ended 31 December 2016
Share Share EBT Retained Total
Capital Premium Shares Earnings
GBP000's GBP000's GBP000's GBP000's GBP000's
--------- --------- --------- ------------ ------------
At 1 January 2015 733 9,077 (127) 8,260 17,943
--------- --------- --------- ------------ ------------
Loss for the year - - - (195) (195)
Other comprehensive - - - - -
expense for the year
--------- --------- --------- ------------ ------------
Total comprehensive
income for the year - - - (195) (195)
Share based payments - - - 51 51
Tax credit relating
to share option scheme - - - (151) (151)
Issue of ordinary
shares 15 709 - - 724
Purchase of shares
by EBT - - (1,150) - (1,150)
Sale of shares by
EBT - - 203 (4) 199
Dividend paid - - - (478) (478)
Total contributions
by and distributions
to owners of the
parent, recognised
directly in equity 15 709 (947) (582) (805)
--------- --------- --------- ------------ ------------
At 31 December 2015 748 9,786 (1,074) 7,483 16,943
--------- --------- --------- ------------ ------------
At 1 January 2016 748 9,786 (1,074) 7,483 16,943
--------- --------- --------- ------------ ------------
Profit for the year - - - 1,383 1,383
Other comprehensive - - - - -
income for the year
--------- --------- --------- ------------ ------------
Total comprehensive
loss for the year - - - 1,383 1,383
Share based payments - - - 230 230
Tax charge relating
to share option scheme - - - 98 98
Issue of ordinary
shares 77 2,760 - - 2,837
Sale of shares by
EBT - - 59 (14) 45
Dividend paid - - - (491) (491)
--------- --------- --------- ------------ ------------
Total contributions
by and distributions
to owners of the
parent, recognised
directly in equity 77 2,760 59 (177) 2,719
--------- --------- --------- ------------ ------------
At 31 December 2016 825 12,546 (1,015) 8,689 21,045
--------- --------- --------- ------------ ------------
Consolidated Statement of Cash Flows (Unaudited)
For the year ended 31 December 2016
2016 2015
GBP000's GBP000's
Unaudited Audited
Cash flows from operating activities
Cash generated from operations 10,656 1,590
Finance income 18 23
Finance cost (4,208) (3,277)
Income tax received/(paid) 133 59
---------- -----------------------
Net cash flows from operating activities 6,599 (1,605)
Cash flows from investing activities
Purchase of property, plant and
equipment (4,958) (17,748)
Purchase of intangible fixed assets (1,851) (492)
Long term security deposits (29) (2,803)
Net cash flows used in investing
activities (6,838) (21,043)
Cash flows from financing activities
Payments of dividends (491) (451)
Proceeds from borrowings 387 24,749
Repayment of borrowings (951) (10,348)
Capital repayments of finance lease (50) -
Proceeds from issue of shares net 2,837 -
of share issue costs
Purchase of own shares - (453)
Sale of own shares 45 199
---------- -----------------------
Net cash flows from financing activities 1,777 13,696
Net increase/(decrease) in cash
and cash equivalents 1,538 (8,952)
Cash and cash equivalents at beginning
of year 4,751 13,703
Cash and cash equivalents at end
of year 6,289 4,751
Notes to the Financial Information
1. Basis of Preparation
Good Energy Group plc is an AIM listed company incorporated and domiciled in the United Kingdom under the Companies Act 2006.
The principal activity of Good Energy Group plc is that of a holding and management company to the Group. Fuller information on the Group's activities is set out in the Chairman's statement, Chief Executive's review and the Chief Financial Officer's review.
The unaudited Preliminary Report has been prepared under the historical cost convention and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and interpretations in issue at 31 December 2016.
The Preliminary Report was approved by the Approvals Committee and the Audit Committee and adopted by the Board of Directors. The Preliminary Report does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006 and has not been audited.
Statutory accounts for the year to 31 December 2015 have been delivered to the Registrar of Companies. The audit report for those accounts was unqualified and did not contain statements under 498 (2) or (3) of the Companies Act 2006.
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2015, as described in those financial statements. New standards or interpretations which came into effect for the current reporting period did not have a material impact on the net assets or results of the Group.
The Preliminary Report is presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.
The Preliminary Report will be announced to all shareholders on the London Stock Exchange and published on the Group's website on 21st March 2017. Copies will be available to members of the public upon application to the Company Secretary at Monkton Reach, Monkton Hill, Chippenham, Wiltshire, SN15 1EE.
2. Segmental Analysis
The chief operating decision-maker has been identified as the Board of Directors (the 'Board'). The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The Board considers the business from a business class perspective, with each of the main trading subsidiaries accounting for each of the business classes. The main segments are:
-- Supply Companies (including electricity supply, FIT administration and gas supply); -- Electricity Generation Companies (including wind and solar generation companies); -- Generation Development (including early stage development companies); -- Holding companies, being the activity of Good Energy Group PLC
The Board assesses the performance of the operating segments based primarily on summary financial information, extracts of which are reproduced below. An analysis of profit and loss, assets and liabilities and additions to non-current asset, by class of business, with a reconciliation of segmental analysis to reported results follows:
Segmental Analysis: 31 December 2016
Electricity FIT Gas Total Electricity Generation Holding Total
Supply Admini-stration Supply Supply Generation Development Companies
Companies /
Consolidation
Adjustments
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Revenue
Revenue from
external
customers 55,324 5,904 23,903 85,131 4,520 786 - 90,437
Inter-segment
revenue - - - - 3,324 - (3,324) -
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Total revenue 55,324 5,904 23,903 85,131 7,844 786 (3,324) 90,437
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Expenditure
Cost of sales (40,559) (1,415) (16,269) (58,243) (4,295) (367) - (62,905)
Inter-segment
cost of sales (3,324) - - (3,324) - - 3,324 -
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Gross Profit 11,441 4,489 7,634 23,564 3,549 418 - 27,532
Administrative
expenses (17,079) (357) (666) (1,868) (19,970)
Depreciation
& amortisation (1,609) - (2) - (1,611)
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Operating
profit/(loss) 4,876 3,192 (250) (1,868) 5,950
Net finance
income/(costs) 140 (5,352) (339) 1,035 (4,516)
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Profit/(loss)
before tax 5,016 (2,160) (588) (834) 1,434
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Segments
assets &
liabilities
Segment assets 45,703 116,337 11,162 (70,270) 102,933
Segment liabilities 38,009 116,948 17,205 (90,273) 81,888
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Net
assets/(liabilities) 7,695 (611) (6,043) 20,003 21,045
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Additions
to non-current
assets 2,264 1,120 3,725 387 7,075
Segmental Analysis: 31 December 2015
Electricity FIT Gas Total Electricity Generation Holding Total
Supply Admini-stration Supply Supply Generation Development Companies
Companies /
Consolidation
Adjustments
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Revenue
Revenue
from external
customers 40,192 3,902 16,411 60,505 3,576 200 - 64,281
Inter-segment
revenue - - - - 3,882 - (3,822) -
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Total revenue 40,192 3,902 16,411 60,505 7,458 200 (3,822) 64,281
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Expenditure
Cost of
sales (24,542) (1,655) (12,987) (39,184) (3,440) (358) - (42,982)
Inter-segment
cost of
sales (3,882) - - (3,882) - - 3,882 -
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Gross profit 11,768 2,247 3,424 17,439 4,018 (158) - 21,299
Administrative
expenses (12,877) (353) (1,448) (1,408) (16,086)
Depreciation
& amortisation (975) - (3) (1) (979)
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Operating
profit/(loss) 3,587 3,665 (1,609) (1,409) 4,234
Net finance
income/(costs) 136 (4,301) (494) 553 (4,106)
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Profit/(loss)
before tax 3,723 (636) (2,103) (856) 128
------------ ---------------- --------- ---------- ------------ ------------ -------------- ---------
Segments
assets &
liabilities
Segment
assets 34,628 96,091 6,778 (43,936) 93,561
Segment
liabilities 29,040 94,239 12,414 (59,075) 76,618
---------------- --------- ---------- ------------ ------------ -------------- ---------
Net
assets/(liabilities) 5,587 1,852 (5,636) 15,140 16,943
---------------- --------- ---------- ------------ ------------ -------------- ---------
Additions
to non-current
assets 755 18,090 - - 18,845
All turnover arose within the United Kingdom.
Consolidation adjustments relate to intercompany sales of generated electricity and the elimination of intercompany balances.
3. Finance Income & Cost
Finance Income: 2016 2015
GBP000's GBP000's
Bank and other interest receivables 18 23
Finance Cost: 2016 2015
GBP000's GBP000's
On bank loans and overdrafts 3,072 3,192
On corporate bond 1,113 1,110
Other interest payable 13 1
Amortisation of debt issue cost 336 327
Total finance costs 4,534 4,630
Less: amounts capitalised on qualifying
assets - (501)
--------- ---------
Total 4,534 4,129
--------- ---------
4. Taxation
2016 2015
GBP000's GBP000's
Analysis of Tax Charge in Year
Current tax (see note below) - 165
Adjustments in respect of prior years (164) (243)
--------- ---------
Total current tax (164) (78)
Deferred Tax
Origination and reversal of temporary
differences 217 (132)
Adjustments in respect of prior years (2) 533
--------- ---------
Total deferred tax 215 401
--------- ---------
Tax on profit on ordinary activities 51 323
--------- ---------
Factors affecting the tax charge for the year
The tax assessed for the year is lower (2015: higher) than the standard weighted average rate of Corporation Tax in the UK of 20.00% (2015: 20.25%). The differences are explained as follows:
2016 2015
GBP000's GBP000's
Profit before tax 1,434 128
--------- ---------
Profit before tax multiplied by the
weighted average rate of Corporation
Tax in the UK of 20.00% (2015: 20.25%) 287 26
Tax effects of:
Expenses not deductible for tax purposes 42 (9)
Non-taxable gain on sale of investment (73) -
Effects in changes in tax rate (39) 16
Prior year adjustment - current tax (164) (243)
Prior year adjustment - deferred tax (2) 533
Total tax charge/(credit) for year 51 323
--------- ---------
5. Earnings per Ordinary Share
Basic
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares during the year after excluding 495,739 (2015: 521,989) shares held by Clarke Willmott Trust Corporation Limited in trust for the Good Energy Group Employee Benefit Trust.
2016 2015
Profit/(loss) attributable to owners
of the Company (GBP000's) 1,383 (195)
Basic weighted average number of
ordinary shares (000's) 15,239 14,455
------- -------
Basic earnings per share 9.1p (1.4p)
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares to assume conversion of all potentially dilutive ordinary shares. Potentially dilutive ordinary shares arise from awards made under the Group's share-based incentive plans. Where the vesting of these awards is contingent on satisfying a service or performance condition, the number of potentially dilutive ordinary shares is calculated based on the status of the condition at the end of the period. Potentially dilutive ordinary shares are actually dilutive only when the average market price of the Company's ordinary shares during the period exceeds their exercise price (options) or issue price (other awards). The greater any such excess, the greater the dilutive effect. The average market price of the Company's ordinary shares during the year was 223p (2015: 222p). The dilutive effect of share-based incentives was 563,595 shares (2015: nil shares).
2016 2015
Profit attributable to owners of
the Company (GBP000's) 1,383 (195)
Weighted average number of diluted
ordinary shares (000's) 15,802 14,455
------- -----------------------
Diluted earnings per share 8.8p (1.4p)
6. Assets and Liabilities Classified as Held for Sale
Consolidated 2016
GBP000's
Property, plant and equipment 5,095
Total assets 5,095
------------------
Deferred taxation (10)
Total liabilities (10)
------------------
Carrying value 5,085
------------------
7. Borrowings
2016 2015
GBP000's GBP000's
Current:
Bank and other borrowings 5,981 5,626
Bond 15,090 -
Total 20,981 5,626
2016 2015
GBP000's GBP000's
Non-Current
Bank and other borrowings 40,277 41,265
Bond - 14,646
Total 40,277 55,911
The Group has undrawn bank overdraft facilities of GBP6,757,144 (2015: GBP5,000,000) as at 31 December 2016 and undrawn revolving credit facilities of GBP882,140 (2015: GBP2,882,140).
At 31 December 2016, GBP7,279,171 (2015: GBP7,681,950) of the bank loans relate to the Company's subsidiary, Good Energy Delabole Wind Farm Limited and is secured by a mortgage debenture on that Company.
At 31 December 2016, GBP37,399,386 inclusive of GBP627,985 of accrued interest (2015: GBP37,959,777 inclusive of GBP659,777 of accrued interest) of the bank loans relate to the Company's subsidiary, Good Energy Generation Assets No. 1 Limited. Repayments of capital and interest are scheduled quarterly over a period of 18 years. Interest is payable at 6.85% and the outstanding principal balance is partially exposed to annual RPI inflation over 3%. Costs incurred in raising finance were GBP2,754,299 (2015: GBP2,627,109) and are being amortised over the life of the loan in accordance with IAS39.
On 2 October 2013 Good Energy Group launched a corporate bond which closed on 24 October 2013 with subscriptions having reached the maximum target of GBP15,000,000. The bond was issued to bondholders on 22 November 2013 with interest scheduled bi-annually. The coupon rate is 7.25% or 7.50% for bondholders that are customers of the Group. Capital repayment of the bond is payable following notice being received from the bond holder no earlier than 4 years from inception. The total costs of issue were GBP770,879 which are being amortised over the life of the bond. As at 31 December 2016 the amortisation recognised in 'finance costs' totalled GBP191,248 (2015: 165,982).
8. Cash flows
2016 2015
GBP000's GBP000's
Profit before income tax 1,434 128
Adjustment for:
Depreciation 2,808 2,351
Amortisation 1,368 705
Share based payments 230 51
Finance costs - net 4,516 4,106
Changes in working capital (excluding the
effects of acquisition and exchange differences
on consolidation)
Inventories (517) (3,872)
Trade and other receivables (4,605) (1,318)
Trade and other payables 5,422 (561)
--------- ---------
Cash generated from operations 10,656 1,590
This information is provided by RNS
The company news service from the London Stock Exchange
END
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March 21, 2017 03:01 ET (07:01 GMT)
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