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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Inspired Plc | LSE:INSE | London | Ordinary Share | GB00BR2Q0V58 | ORD 1.25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.50 | 2.38% | 64.50 | 61.00 | 63.00 | 63.00 | 62.00 | 63.00 | 130,682 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 88.78M | -3.63M | -0.0360 | -17.22 | 62.47M |
From Apr 2019 to Apr 2024
TIDMINSE
RNS Number : 3597I
Inspired Energy PLC
30 August 2016
30 August 2016
Inspired Energy plc
("Inspired" or the "Group")
Results for the six months ended 30 June 2016
Continued strong performance across both Corporate and SME divisions
Inspired Energy plc (AIM: INSE), a leading UK Corporate focused energy procurement consultant, announces its consolidated unaudited half year results for the six month period ended 30 June 2016.
Financial highlights
Hot Features
Premium
2016
H1 2016 H1 2015 % increase
----------------------- --------- --------- -----------
Revenue GBP10.16m GBP6.52m 56%
Gross profit GBP7.95m GBP4.90m 62%
Adjusted EBITDA* GBP3.75m GBP2.46m 52%
Adjusted profit before
tax GBP3.31m GBP2.30m 44%
Profit before tax GBP1.93m GBP1.77m 9%
Cash generated from
operations GBP2.55m GBP1.91m 34%
Interim dividend per
share 0.13p 0.10p 30%
Adjusted EPS 0.62p 0.45p 38%
Basic EPS 0.33p 0.32p 3%
Procurement Corporate
Order Book GBP25.70m GBP15.20m 69%
----------------------- --------- --------- -----------
* Earnings before interest, taxation, depreciation, amortisation, exceptional costs and share based payments
2016
H1 2016 FY 2015 % decrease
--------- --------- --------- -----------
Net debt GBP8.08m GBP8.89m 9%
-- Results for the six months ended 30 June 2016 in line with management's expectations
-- Strong cash generation from operations representing 68% of adjusted EBITDA (H1 2015: 77%; FY15; 52%), reflecting the increased weighting of the Corporate Division, which is highly cash generative
-- Interim dividend increased by 30% to 0.13p per share (H1 2015: 0.10p)
-- The Procurement Corporate Order Book, which provides strong visibility of revenues and is a consistent guide to the future performance of the Corporate Division, has increased by 69% to GBP25.7m (H1 2015: GBP15.2m).
Operational highlights
-- Successful integration of WPUK and STC, two corporate-focused acquisitions completed in H2 2015, enhancing the scale and service offering of the Corporate Division
-- Relocation of WPUK and the STC Procurement Division to the Group's Head Office, bringing knowledge, expertise and sector specialisms, which is expected to create additional sales opportunities and cost synergies from FY 2017 and beyond
Commenting on the results, Janet Thornton, CEO of Inspired, said: "Once again, I am delighted by the strong performance of the Group in the period, delivering record growth on all fronts, as we continue to deliver value-added services to our customers.
"The focus of the six months to 30 June 2016 was on the integration and relocation of the acquired businesses of WPUK and STC which have been achieved on target and within budget. In addition, the underlying businesses have continued to perform to plan, with sales opportunities created by the acquisitions already gaining traction.
"The record results are again testament to the commitment and expertise of the Group's team. The Group continues to deliver strong organic growth and the Corporate Division is now firmly established as a leading energy consultant to UK Corporates, offering a breadth of innovative and cost effective solutions to a wide range of clients and sectors, backed up by proactive advice and assurance throughout the life of a contract. This combination of skills, dedication, innovation and expertise allows the Group to maintain its outstanding retention rates in excess of 85%, which I am pleased to report we are also achieving in the acquired books of WPUK and STC.
"The SME division also continues to contribute strong revenue, profit and cash to the Group, with minimal increase in headcount and I am pleased with the progress that this division is continuing to make.
"The momentum built in the last two years continues unabated with the second half of the year starting strongly. Since 30 June 2016, a major retail focussed corporate customer of STC, having engaged with Inspired's Risk Managed Team, has entered into a contract that is now the largest signed by the Group to date. We look forward to delivering another set of strong results for the year ended 31 December 2016. With the continued growth in the Corporate Order Book the Board is confident that the Group is well positioned for the medium term."
For further information, please contact:
Inspired Energy plc www.inspiredplc.co.uk
Janet Thornton, Chief Executive +44 (0) 1772 689
Officer 250
Paul Connor, Finance Director
David Foreman, Corporate +44 (0) 7717 707
Development Director 201
Shore Capital (Nominated +44 (0) 20 7408
Advisor and Joint Broker) 4090
Bidhi Bhoma
Edward Mansfield
Panmure Gordon (Joint Broker)
Ben Thorne +44 (0) 20 7886
Erik Anderson 2500
+44 (0) 20 7193
Gable Communications 7463
Justine James +44 (0) 7525 324431
John Bick inspired@gablecommunications.com
Chairman's Statement
I am pleased to present the Group's unaudited interim results for the six months ended 30 June 2016, in which Inspired performed strongly from a financial and operational perspective, delivering results in line with management expectations. The results highlight excellent organic growth, while successfully integrating the two corporate-focused acquisitions completed in the second half of 2015.
The acquisitions of WPUK and STC in 2015 were significant milestones in the development of the Group and the Board is pleased to report that both businesses have been successfully integrated and that the relocation of WPUK and the Procurement function of STC to Group head office has been completed to plan and on budget. The acquisitions have both enhanced Inspired's service offering and broadened the client base within the Corporate Division and we are pleased to report that the acquired businesses continue to trade as we originally anticipated. We continue to see the added skills, services and strategic options that STC in particular has added to the Group, with the integration between the existing Corporate Division and the team at STC providing significant incremental revenue opportunities.
The core Corporate Division delivered a record set of results in the six months to 30 June 2016, underpinned by Procurement Order Book Sales of GBP7.2m (H1 2015: GBP5.5m), representing an increase of 31% for the period. As a consequence of this continued strong growth the Procurement Corporate Order Book has increased to GBP25.7m as at 30 June 2016 (H1 2015: GBP15.2m) representing a year on year increase of 69%. The Procurement Order Book remains a consistent guide to the future performance of the Group and provides strong visibility of revenues for FY 2017 and the next three years, which enables us to look forward with confidence over the short to medium term.
The acquisitions of WPUK and STC have, in conjunction with excellent organic growth from the existing Corporate Division, increased revenue to GBP7.5m (H1 2015: 4.3m) which represents 75% of Group revenue. Adjusted EBITDA for the Corporate Division for the period is GBP3.2m (H1 2015: GBP2.1m) and now represents 86% of the Group's combined adjusted EBITDA. This reinforces the Board's stated strategy to focus on growing the Corporate Division both through further acquisitions and organically.
The SME Division has continued to deliver strong growth of revenue, profits and cash during H1 of 2016, with a minimal increase in headcount. Revenue for the SME Division in the six-month period was GBP2.6m (H1 2015: GBP2.1m) which represents an increase of 24% from the prior year. Adjusted EBITDA generated by the Division was GBP0.9m (H1 2015: GBP0.6m) and the SME Division contributed materially to cash generation in the period.
Accordingly, the Board is pleased to propose an interim dividend of 0.13 pence per share (H1 2015: 0.10 pence per share).
We are delighted with the performance in the first half of 2016 and we enter the second half of 2016 and beyond with confidence.
Bob Holt
Chairman
30 August 2016
CEO's Statement
The Board is delighted with the performance of the Group in the period to 30 June 2016, delivering record organic growth in all divisions, enhanced by the strategic acquisitions of both WPUK in July 2015 and STC in November 2015.
The Group has a very strong platform from which to continue the organic growth of the business, onto which we can add new service lines or sector specialisms via acquisition as clearly demonstrated with WPUK and STC. We look forward to the rest of 2016 and the opportunities for further growth.
Corporate Division
Overview
The Group's Corporate Division comprises:
-- Inspired Energy Solutions (founder business); -- DEP (acquired in 2013); -- WPUK (acquired in H2 2015); and -- STC (acquired in H2 2015).
The Division's core services include the review, analysis and negotiation of gas and electricity contracts on behalf of clients ("Energy Procurement Services"). Once contracts are signed and a client is on-board, the Division provides in-contract, real time, bureau, bill checking and cost dispute resolution services to clients ("Bureau Services").
Following the successful relocation of WPUK and the Procurement Division of STC, all Energy Procurement Services are performed from the Group's Head Office in Kirkham. The Bureau Services are provided from a core team in Kirkham and by STC, which is located in Bromley.
Highlights
Highlights in the first half of the year include:
-- Revenue increased 72% to GBP7.5m (H1 2015: GBP4.4m)
-- The Corporate Division generated adjusted EBITDA of GBP3.2m (H1 2015: GBP2.1m), a 53% year on year increase
-- Procurement Corporate Order Book Sales, increased by 31% to GBP7.2m in the period to 30 June 2016 (H1 2015: GBP5.5 million)
-- Procurement Corporate Order Book increased by 69% to GBP25.7 million as at 30 June 2016 (H1 2015: GBP15.2 million)
-- High customer retention rates maintained, 85% across the Group (100% in Risk Managed), whilst delivering strong new customer win performance
Procurement Corporate Order Book GBP'm Analysis Procurement Corporate Order Book b/f at 31 December 2015 24.5 Add: Procurement Corporate Order Book Sales in period 7.2 Less: Revenue recognised from Procurement Corporate Order Book in period 6.0 Procurement Corporate Order Book c/f at 30 June 2016 25.7
The Procurement Corporate Order Book is defined as the aggregate revenue expected by the Group in respect of signed contracts between an Inspired client and an energy supplier for the remainder of such contracts (where the contract is live) or for the duration of such contracts (where the contract has yet to commence). No value is ascribed to expected retentions of contracts.
The Procurement Corporate Order Book only relates to the Corporate Division, and does not include any SME revenue or contracts within it. The growth of the Procurement Corporate Order Book provides an indicator of the latent growth of the business which has yet to be recognised as revenue of the Group. This is due to no revenue being recognised by Inspired's Corporate Division until the energy is physically consumed by the client.
Procurement Corporate Order Book Sales
Procurement Corporate Order Book Sales values represent the aggregated expected revenue due to the Group from contracts secured within a defined period. Expected revenue is calculated as the expected commission due to the Group from signed contracts between a client and energy supplier for an agreed consumption value at an agreed commission rate.
Procurement Corporate Order Book Sales which are in excess of revenue recognised, within a defined period, will increase the Procurement Corporate Order Book of the Group, providing an indicator of expected future growth already secured by the Group.
SME Division
The Group's SME Division includes: EnergiSave Online ("EnergiSave"), KWH Consulting ("KWH") and Simply Business Energy ("SBE"). Within the SME Division, the Group's energy consultants contact prospective SME clients to offer reduced tariffs and contracts based on the unique situation of the customer.
The SME Division has achieved strong growth in the six months to 30 June 2016, with revenue increasing 24% to GBP2.6 million (H1 2015: GBP2.1m). The SME Division increased adjusted EBITDA to GBP0.9 million from GBP0.6 million in the six months ending 30 June 2015, representing organic growth of 50%. The growth in adjusted EBITDA achieved in the period has been as a result of an improvement in margin to 33.3% (H1 2015: 27.5%) as the business has matured following a period of significant investment in SME sales and administration staff at the beginning of 2014 in order to establish a robust platform for the division. This is emphasised by staff numbers remaining broadly stable.
The Board is particularly pleased to report that the strong cash generation in 2015 by the division has continued during 2016.
Acquisition strategy
The Board continues to investigate opportunities for the Group to participate in industry consolidation. To create an enlarged and improved business, as demonstrated with the acquisitions made in 2015, we believe that potential targets should offer one or more of the following criteria:
-- Additional technical and/or service capability; -- Sector specialism and diversification; -- Increased geographic footprint; and -- Significant opportunities for sales or cost synergies
The Board continues to seek acquisition opportunities which fit with the Group's strategy in order to augment the Group's services, products or markets.
Dividends
The Board is delighted to propose interim dividend of 0.13 pence per share. This represents an increase of 30% over the interim dividend paid in 2015, being 0.10 pence per share.
The ex-dividend date is 8 September 2016 with a record date of 9 September 2016. The dividend will be paid to shareholders on 15 November 2016.
Outlook
The Group's acquisition strategy has delivered great results as demonstrated by the success achieved by the acquisition and integration of WPUK and STC, while organic growth momentum has continued. Since 30 June 2016, and through the enlarged teams working together, we have signed our largest ever account within the Corporate Division and are confident we will deliver another set of record results for the year ended 31 December 2016 enabling us to looking ahead into FY 2017 with even greater confidence.
The Corporate Division continues to go from strength to strength and we are excited by the opportunities which can now be maximised from the enhanced breadth and depth of skills and expertise that we can provide to our expanding customer base.
On behalf of the Board, I would like to thank all of the Inspired team for the hard work over the past six months, as we look forward to completing another exciting year of growth and development of the business.
Janet Thornton
Chief Executive Officer
30 August 2016
Group Statement of Comprehensive Income
For the six months ended 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
----------------------------- ----- ------------- ------------- -------------
Revenue 10,163,398 6,524,019 15,188,071
Cost of sales (2,212,327) (1,625,789) (3,622,110)
------------- ------------- -------------
Gross profit 7,951,071 4,898,230 11,565,961
Administrative
expenses (5,774,307) (3,045,702) (7,651,117)
------------- ------------- -------------
Operating profit 2,176,764 1,852,528 3,914,844
------------- ------------- -------------
Analysed as:
Earnings before
exceptional costs,
depreciation, amortisation
and share-based
payment costs 3,746,742 2,459,353 5,688,954
Exceptional costs - - -
Fees associated
with Acquisition (52,993) (168,574) (480,128)
Restructuring Costs (97,892) - -
Depreciation (197,390) (70,352) (194,358)
Amortisation of
intangible assets (1,065,243) (218,032) (786,705)
Share-based payment
costs (156,460) (149,867) (312,919)
------------- ------------- -------------
2,176,764 1,852,528 3,914,844
----------------------------- ----- ------------- ------------- -------------
Finance expenditure (244,210) (87,223) (358,593)
Other financial
items - - (61,658)
------------- ------------- -------------
Profit before income
tax 1,932,554 1,765,305 3,494,593
Income tax expense (360,202) (405,287) (651,344)
------------- ------------- -------------
Profit for the
period and total
comprehensive income 1,572,352 1,360,018 2,843,249
============= ============= =============
Attributable to: Note
Equity owners of
the Company 1,572,352 1,360,018 2,843,249
Basic earnings
per share attributable
to the equity holders
of the Company
(pence) 3 0.33 0.32 0.65
Adjusted basic
earnings per share
attributable to
the equity holders
of the Company
(pence) 3 0.62 0.45 1.00
----------------------------- ----- ------------- ------------- -------------
Group Statement of Financial Position
At 30 June 2016
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
--------------------------- ----- ------------- ------------- -------------
ASSETS
Non-current assets
Intangible assets 5 16,099,356 3,190,101 16,938,740
Property, plant
and equipment 4 1,350,481 623,677 1,360,303
Deferred tax asset - 50,076 -
17,449,837 3,863,854 18,299,043
Current assets
Trade and other
receivables 10,573,511 6,645,346 9,460,174
Cash and cash equivalents 1,775,304 1,225,274 1,604,851
------------- ------------- -------------
12,348,815 7,870,620 11,065,025
Total assets 29,798,652 11,734,474 29,364,068
------------- ------------- -------------
LIABILITIES
Current liabilities
Trade and other
payables 1,446,904 1,019,350 1,357,231
Bank borrowings 1,512,500 2,200,000 2,000,000
Current tax liability 920,315 929,923 1,144,139
Dividend payable - 771,812 -
Contingent consideration 456,602 - 1,654,601
Deferred consideration - - -
4,336,321 4,921,085 6,155,971
Non-current liabilities
Bank borrowings 8,339,727 1,306,746 8,490,569
Trade and other
payables 53,624 119,740 50,000
Contingent consideration 1,486,505 - 1,788,506
Deferred tax liability 1,538,173 - 1,495,244
Interest rate swap - 14,913 76,571
11,418,029 1,441,399 11,900,890
Total liabilities 15,754,350 6,362,484 18,056,861
------------- ------------- -------------
Net assets/(liabilities) 14,044,302 5,371,990 11,307,207
============= ============= =============
EQUITY
Share capital 600,270 535,981 589,505
Share premium account 2,156,171 1,680,736 1,901,747
Merger relief reserve 14,418,343 9,222,033 13,675,249
Retained earnings 7,464,808 4,708,418 5,892,456
Share based payments
reserves 787,483 607,595 631,023
Reverse acquisition
reserve (11,382,773) (11,382,773) (11,382,773)
Total equity/(deficit) 14,044,302 5,371,990 11,307,207
============= ============= =============
Group Statement of Cash Flows
For the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June Year ended
2016 2015 31 December
(unaudited) (unaudited) 2015 (audited)
Note GBP GBP GBP
------------------------------ ----- ------------ ------------ ---------------
Cash flows from operating
activities
Profit before income
tax 1,932,554 1,765,305 3,494,593
Adjustments
Depreciation 197,390 70,352 194,358
Amortisation 1,065,243 218,032 786,705
Share based payment
costs 156,460 149,867 312,919
Contingent Consideration - - -
Finance expenditure 244,210 87,223 358,593
Other financial items - - 61,658
Cash flows before
changes in working
capital 3,595,857 2,290,779 5,208,826
Movement in working
capital
Decrease/(Increase)
in trade and other
receivables (1,113,337) (445,463) (2,200,656)
(Decrease)/increase
in trade and other
payables 70,073 62,692 (289,165)
------------ ------------ ---------------
Cash generated from
operations 2,552,593 1,908,008 2,719,005
------------ ------------ ---------------
Income taxes paid (532,786) (635,361) (987,833)
Net cash flows from
operating activities 2,019,807 1,272,647 1,731,172
Cash flows from investing
activities
Purchase of property,
plant and equipment (187,568) (422,354) (246,091)
Payments to acquire
intangible assets (225,859) - (529,772)
Deferred consideration
paid (750,000) (50,000) -
Contingent consideration
paid - - (50,000)
Disposal of property,
plant and equipment 19,911
Acquisition of subsidiary,
net of cash - - (5,571,279)
------------ ------------ ---------------
(1,163,427) (472,354) (6,377,231)
Cash flows from financing
activities
New bank loans - - 7,363,158
Repayment of bank
loans (700,000) (350,000) (613,158)
Finance expenses (244,210) (87,223) (355,192)
Repayment of hire
purchase agreements - - (23,225)
Net proceeds of equity 258,283 87,382 315,134
Dividends paid - - (1,210,629)
------------ ------------ ---------------
(685,927) (349,841) 5,476,088
Net increase/(decrease)
in cash and cash equivalents 170,453 450,452 830,029
Cash and cash equivalents
brought forward 1,604,851 774,822 774,822
------------ ------------ ---------------
Cash and cash equivalents
carried forward 1,775,304 1,225,274 1,604,851
============ ============ ===============
Group Statement of Changes in Equity
For the six months ended 30 June 2016
Share Merger Share-based Reverse Total
Share premium relief payment Retained acquisition shareholders'
capital account reserve reserve earnings reserve equity
GBP GBP GBP GBP GBP GBP GBP
Balance at 1
January 2015 529,602 1,596,028 8,925,737 457,728 4,120,212 (11,382,773) 4,246,534
------- --------- ---------- ----------- ----------- ------------ -------------
Profit and total
comprehensive
income for the
period - - - - 2,843,249 - 2,843,249
Shares issued
(1 April 2015) 2,675 84,707 - - - - 87,382
Shares issued
(20 May 2015) 3,704 - 296,296 - - - 300,000
Shares issued
(31 July 2015) 5,800 - 494,200 - - - 500,000
Shares issued
(21 August 2015) 6,740 221,012 - - - - 227,752
Shares issued
(17 November 2015) 40,984 - 3,959,016 - - - 4,000,000
Share-based payment
cost - - - 312,919 - - 312,919
Share options
lapsed/exercised - - (139,624) 139,624 - -
Dividends paid - - - (1,210,629) - (1,210,629)
Total transactions
with owners 59,903 305,719 4,749,512 173,295 (1,071,005) - 4,217,424
------- --------- ---------- ----------- ----------- ------------ -------------
Balance at 31
December 2015 589,505 1,901,747 13,675,249 631,023 5,892,456 (11,382,773) 11,307,207
-------
Profit and total
comprehensive
income for the
period - - - - 1,572,352 - 1,572,352
Shares issued
(12 January 2016) 2,187 131,565 - - - - 133,752
Shares issued
(5 May 2016) 1,672 122,859 - - - - 124,531
Shares issued (23
May 2016) 6,906 - 743,094 - - - 750,000
Share-based payment
costs - - - 156,460 - - 156,460
Dividend - - - - - - -
------- --------- ---------- ----------- ----------- ------------ -------------
Balance at 30 June
2016 600,270 2,156,171 14,418,343 787,483 7,464,808 (11,382,773) 14,044,302
------- --------- ---------- ----------- ----------- ------------ -------------
1. Accounting Policies
Basis of Preparation
These consolidated, unaudited, interim financial statements are for the six months ended 30 June 2016. Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS), this announcement in itself does not contain sufficient information to comply with IFRS. Details of the accounting policies are those set out in the annual report for the year ended 31 December 2015. These accounting policies have remained unchanged for the six months ended 30 June 2016.
Going Concern
The Group's forecasts, which have been prepared for the period to 31 December 2017 after taking into account the contracted orders book, future sales performance, expected overheads, capital expenditure and debt service costs, show that the Group should be able to operate profitably and within the current financial resources available to the Group.
After making enquiries, the Directors have a reasonable expectation that the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the consolidated interim financial statements.
The preparation of financial statements, in conformity with generally accepted accounting principles under IFRS, requirements management to make estimates and assumptions that affect the reporting amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates.
1.1 Revenue Recognition
Corporate Division
Commissions received from the energy suppliers are based upon the energy usage of the Corporate customer at agreed commission rates with the energy suppliers. Commission income is recognised in line with the energy usage of the Corporate customer over the term of the contract which is considered to be the point at which commission income can be reliably measured. This is due to the impact of the observed variability of actual to estimated energy usage on Corporate customer contracts on the substantial Procurement Corporate Order Book of the Corporate Division.
The majority of contracts are entered into as 'direct billing' contracts, whereby commissions are received in cash terms in line with the billing profile of the ultimate customer, which can be on a monthly or quarterly basis. For a minority of suppliers, 'up-front payment' contracts are entered into, whereby the supplier pays a percentage of the commission on the contract commencement date, with the remaining percentage on contract reconciliation at a future specified date.
Accrued income for the Corporate Division represents commission income recognised at the year-end in respect of customer energy usage prior to the year-end which has not been settled by the energy supplier at that point.
For risk managed contracts, where a number of services are provided to the Corporate customer over the term of the contract, commission income is similarly recognised in line with the energy usage of the customer which approximates to recognition on a straight line basis over the contract period.
In respect of contracts for on-going services billed directly to the Corporate customer including bureau services, which have increased since the acquisition of STC Energy and Carbon Holdings Limited, revenue represents the value of work done in the year. Revenue in respect of contracts for on-going consultancy services is recognised as it becomes unconditionally due to the group as services are delivered and is measured by reference to stage of completion as determined by cost profile.
SME Division
The SME Division provides services through procuring contracts with energy suppliers on behalf of SME customers and generates revenues by way of commissions received directly from the energy suppliers. No further services regarding procurement are performed once the contract is authorised by the supplier. Commissions earned by the SME Division fall into two broad categories:
Change of Tenancy Agreements ('COTS')
COTS agreements are largely entered into by customers on moving into new premises. Revenue relates to an upfront fixed commission received from the energy supplier, on setting up a new supply agreement. The commission received has no linkage to future energy usage and hence revenue can be reliably measured at the point the contract has been authorised by the energy supplier. Revenue is recognised at the point the contract has been authorised by the energy supplier.
Other SME Agreements
For other SME agreements, commissions are based upon the energy usage of the SME customer at agreed commission rates with the energy suppliers. The expected commission over the full term of the contract is recognised at the point the contract is authorised by the supplier. Where actual energy use by the business differs to that calculated at the date the contract goes live, an adjustment is made to revenue once the actual data is known.
The cash received profile relating to these revenues varies according to the contract terms in place with the energy supplier engaged and can be received before the date the contract goes live or spread over the terms of the contract between the energy supplier and the end customer which can be for a period of up to three years. Accrued revenue relates to commission earned, not yet received or paid and are discounted at an appropriate rate.
2. Segmental information
Revenue and segmental reporting
The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group's Executive Directors. Operating segments for the six month period to 30 June 2016 were determined on the basis of the reporting presented at regular Board meetings of the Group which is by nature of customer and level of procurement advice provided. The segments comprise:
The Corporate Division ("Corporate")
This sector comprises the operations of Inspired Energy Solutions Limited, Direct Energy Purchasing Limited, Wholesale Power UK Limited and STC Energy Management Limited. The Corporate's core services are primarily in the review, analysis and negotiation of gas and electricity contracts on behalf of corporate clients. Additional services provided include Energy Review and Benchmarking, Negotiation and Bill Validation. The Group's Corporate Division benefits from a market leading trading team, who actively focus on high volume customers, providing more complex, long-term energy frameworks based on agreed risk management strategies.
The SME Division (SME)
This sector comprises the operations of the Energisave Online Limited, KWH Consulting Limited and Simply Business Energy Limited. Within the SME Division, the Group's energy consultants contact prospective SME clients to offer reduced tariffs and contracts based on the unique situation of the customer. Leads are generated and managed by the Group's internally generated, bespoke CRM and case management IT system. Tariffs are offered from a range of suppliers and the Group is actively working with new suppliers to increase the range of products available to SME clients.
PLC costs
This comprises the costs of running the PLC, incorporating the cost of the Board, listing costs and other professional service costs such as audit, tax, legal and Group insurance.
Six months ended 30 June 2016 Six months ended 30 June 2015
Corporate SME PLC costs Total Corporate SME PLC costs Total
GBP GBP GBP GBP GBP GBP GBP GBP
Revenue 7,497,760 2,605,533 60,105 10,163,398 4,354,337 2,109,633 60,049 6,524,019
Cost of sales (907,040) (1,305,287) - (2,212,327) (609,505) (1,016,284) - (1,625,789)
--------------- ----------- ----------- ------------ ----------- ----------- ----------- ------------- -----------
Gross profit 6,590,720 1,300,246 60,105 7,951,071 3,744,832 1,093,349 60,049 4,898,230
--------------- ----------- ----------- ------------ ----------- ----------- ----------- ------------- -----------
Administration
expenses (3,621,167) (646,309) (1,506,831) (5,774,307) (1,758,964) (669,220) (617,518) (3,045,702)
--------------- ----------- ----------- ------------ ----------- ----------- ----------- ------------- -----------
Operating
profit 2,969,553 653,937 (1,446,726) 2,176,764 1,985,868 424,129 (557,469) 1,852,528
--------------- ----------- ----------- ------------ ----------- ----------- ----------- ------------- -----------
Analysed as:
EBITDA 3,234,045 867,678 (354,981) 3,746,742 2,118,313 579,434 (238,394) 2,459,353
Depreciation (182,540) (14,850) - (197,390) (62,287) (7,431) (634) (70,352)
Amortisation (81,952) (198,891) (784,400) (1,065,243) (70,158) (147,874) - (218,032)
Share-based
payments - - (156,460) (156,460) - - (149,867) (149,867)
Exceptional
costs - - (150,885) (150,885) - - (168,573) (168,574)
----------- ----------- ------------ ----------- ----------- ----------- ------------- -----------
2,969,553 653,937 (1,446,726) 2,176,764 1,985,868 424,129 (557,468) 1,852,528
--------------- ----------- ----------- ------------ ----------- ----------- ----------- ------------- -----------
3. Earnings Per Share
The earnings per share is based on the net profit for the period attributable to ordinary equity holders divided by the weighted average number of ordinary shares outstanding during the period.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP GBP GBP
------------------------------ -------------- -------------- --------------
Profit attributable
to equity holders of
the Group 1,572,352 1,360,018 2,843,249
Amortisation of computer
software and customer
databases 608,993 173,210 388,430
Amortisation of other
intangible assets acquired 456,250 44,822 398,275
Deferred tax in respect
of amortisation - - (62,703)
Fees associated with
acquisition/listing 52,993 - 480,128
Share based payments
costs 156,460 149,867 312,919
Exceptional items 97,892 168,574 -
Adjusted profit attributable
to equity holders of
the Group 2,944,940 1,896,491 4,360,298
-------------- -------------- --------------
Weighted average number
of ordinary shares
in issue 474,850,659 425,245,485 434,844,094
Diluted weighted average
number of ordinary
shares in issue 501,835,399 448,529,786 458,849,929
Basic earnings per
share (pence) 0.33 0.32 0.65
Diluted earnings per
share (pence) 0.31 0.30 0.62
Adjusted basic earnings
per share (pence) 0.62 0.45 1.00
Adjusted diluted earnings
per share (pence) 0.59 0.42 0.95
Alternate adjusted
diluted earnings per
share (pence) 0.49 0.40 0.91
Alternate adjusted
diluted earnings per
share (pence) 0.47 0.38 0.87
The weighted average number of shares in issue for the adjusted diluted earnings per share include the dilutive effect of the 26,984,740 share options in issue to senior staff of Inspired Energy plc.
Adjusted earnings per share represents the earnings per share, as adjusted to remove the effect of the fees associated with acquisition/listing, amortisation of intangible assets, share based payments and exceptional items which have been expensed to the income statement in the period.
Alternate adjusted earnings per share represents the earnings per share, as adjusted to remove the effect of the fees associated with acquisition/listing, amortisation of intangible assets (excluding amortisation related to computer software and customer databases), share based payments and exceptional items which have been expensed to the income statement in the period.
4. Property, plant and equipment
Motor Leasehold
Fixtures and fittings vehicles Computer equipment improvements Total
GBP GBP GBP GBP GBP
Cost
As at 1 January 2015 315,873 38,326 263,071 183,796 801,066
Acquisitions through
business combinations 30,802 13,100 724,349 - 768,251
Additions 101,768 - 109,460 34,863 246,091
Disposals - (38,326) - - (38,326)
At 31 December 2015 448,443 13,100 1,096,880 218,659 1,777,082
Additions 96,203 - 82,589 8,776 187,568
At 30 June 2016 544,646 13,100 1,179,469 227,435 1,964,650
--------------------- --------- ------------------ --------------------- ---------
Depreciation
As at 1 January 2015 98,086 12,478 111,673 18,599 240,836
Charge for the year 68,876 8,213 96,950 20,319 194,358
Disposals - (18,415) - - (18,415)
At 31 December 2015 166,962 2,276 208,623 38,918 416,779
Charge for the year 39,290 728 145,988 11,384 197,390
At 30 June 2016 206,252 3,004 354,611 50,302 614,169
--------------------- --------- ------------------ --------------------- ---------
Net Book Value
At 30 June 2016 338,394 10,096 824,858 177,133 1,350,481
--------------------- --------- ------------------ --------------------- ---------
At 31 December 2015 281,481 10,824 888,257 179,741 1,360,303
--------------------- --------- ------------------ --------------------- ---------
5. Intangible assets and goodwill
Computer Trade name Customer Customer Customer
software GBP databases contracts relationships Goodwill Total
GBP GBP GBP GBP GBP GBP
Cost
At 1 January
2015 954,903 - 516,015 1,835,850 - 2,075,739 5,382,507
Additions 101,487 - 428,285 - - - 529,772
Acquisitions
through
business
combinations 3,009,000 115,000 - 1,638,000 1,989,000 7,325,095 14,076,095
At 31
December
2015 4,065,390 115,000 944,300 3,473,850 1,989,000 9,400,834 19,988,374
Additions 56,659 - 169,200 - - - 225,859
At 30 June
2016 4,122,049 115,000 1,113,500 3,473,850 1,989,000 9,400,834 20,214,233
------------ ------------ ----------- ------------ ------------- --------- ----------
Amortisation
As at 1
January 2015 210,035 - 217,044 1,835,850 - - 2,262,929
Charge for
the year 259,570 677 339,018 128,860 58,580 - 786,705
At 31
December
2015 469,605 677 556,062 1,964,710 58,580 - 3,049,634
Charge for
the year 410,102 2,875 198,891 204,750 248,625 - 1,065,243
------------ ------------ ----------- ------------ ------------- --------- ----------
At 30 June
2016 879,707 3,552 754,953 2,169,460 307,205 - 4,114,877
------------ ------------ ----------- ------------ ------------- --------- ----------
Net Book
Value
At 30 June
2016 3,242,342 111,448 358,547 1,304,390 1,681,795 9,400,834 16,099,356
------------ ------------ ----------- ------------ ------------- --------- ----------
At 31
December
2015 3,595,785 114,323 388,238 1,509,140 1,930,420 9,400,834 16,938,740
------------ ------------ ----------- ------------ ------------- --------- ----------
Computer software is a combination of assets internally generated and assets acquired through business combinations. Amortisation charged in the period to 30 June 2016 associated with computer software acquired through business combinations is GBP328,150. The additional GBP81,952 charged in the period relates to the amortisation of internally generated computer software. Amortisation of customer databases of GBP198,891 is also in relation to internally generated intangible assets.
6. Availability of this announcement
This announcement together with the financial statements herein and a presentation in respect of the interim financial results are available on the Group's website, www.inspiredplc.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BCGDIDUDBGLC
(END) Dow Jones Newswires
August 30, 2016 02:01 ET (06:01 GMT)
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