Utilitywise plc Half Yearly Report (7855K)

TIDMUTW

RNS Number : 7855K

Utilitywise plc

21 April 2015

Under embargo until 7am, 21 April 2015

Utilitywise plc

("Utilitywise" or the "Company")

Interim Results

for the six months ended 31 January 2015

Utilitywise, a leading independent utility cost management consultancy, is pleased to announce its financial results for the six months ended 31 January 2015.

Financial Highlights

   --     Revenue increased 42% to GBP29.9m (H1 2014: GBP21.0m) 
   --     Adjusted EBITDA* increased 42% to GBP7.7m (H1 2014: GBP5.4m) 
   --     Adjusted Pre-tax profit** increase of 49% to GBP7.3m ( H1 2014: GBP4.9m) 
   --     Adjusted fully diluted EPS*** increased 41% to 7.2p (H1 2014: 5.1p) 
   --     Proposed interim dividend increased 55% to 1.7p (H1 2014: 1.1p) 
   --     Net cash of GBP1.6m (H1 2014: (GBP0.1m)) 

*Adjusted for share based payments of GBP366k (H1 2014: adjusted for share based payments of GBP411k)

** Adjusted for share based payments of GBP366k and amortisation of IFRS3 intangibles of GBP531k (H1 2014: adjusted for share based payments of 411k and amortisation of IFRS3 intangibles of GBP452k)

*** Adjusted for share based payments of GBP366k (H1 2014: GBP411k), amortisation of IFRS3 intangibles of GBP531k (H1 2014: GBP452k) and the tax impact of those adjustments of (GBP162k) (H1 2014: GBP181k)

Corporate Highlights

   --     Successful move to new corporate headquarters 
   --     Energy consultants increased 29% to 449 (H1 2014: 347) 
   --     Total group headcount up 16% to 884 (H1 2014: 761) 

-- New initiatives such as ESOS and water de-regulation in Scotland resourced to drive new revenue opportunities

Post period highlights

   --     Energy consultants increased to 549 (22% increase post period end) 
   --     Total group headcount up 14% to 1,011 
   --     Secured revenue as at 31 March 2015 at GBP26m 
   --     Group customer numbers at 23,109 at 31 March 2015 
   --     Acquisition of T-mac announced today 

Geoff Thompson, Chief Executive of Utilitywise, commented:

"The Group has continued to make progress with impressive growth in both revenue and EBITDA. During the period, we both extended contracts for existing customers and continued to secure new customers, providing further validation of the strength of our proposition and the important differentiation we have achieved through the on-going development of our energy management products and services.

"The move to our new Head Office was completed on schedule and on budget in November 2014, enabling us to accelerate the recruitment of additional staff in order to drive future growth and the progress with this is in line with our plans. New customer acquisition remains an important priority and, in line with this, we are pleased to report that March 2015 represented the highest monthly customer acquisition performance for the Group in its history.

"A significant market opportunity exists for continued profitable growth and we look forward to a second half of continued positive momentum."

For further information:

 
 Utilitywise PLC                          0870 626 0559 
 Geoff Thompson, CEO 
 Andrew Richardson, Deputy CEO 
  Jon Kempster, CFO 
 
 finnCap (NOMAD and joint broker)         020 7220 0500 
 Matt Goode / Grant Bergman (Corporate 
  Finance) 
 Simon Johnson (Corporate Broking) 
 
 Liberum (Joint broker)                   020 3100 2000 
 Robert Morton / Steve Pearce 
 
  Redleaf PR                                020 7382 4730 
 Rebecca Sanders-Hewett / David 
  Ison 
 
 
 

About Utilitywise

Utilitywise is a leading independent utility cost management consultancy based in North Tyneside. The Group has established trading relationships with a number of major UK energy suppliers and provides services to its customers designed to assist them in achieving better value out of their energy contracts, reduced energy consumption and lower carbon footprint.

Businesses large and small rely on Utilitywise for their energy management needs. Clients range in size from high street shops to multinationals with thousands of sites and cover the whole of the UK. In total, Utilitywise has over 23,000 customers.

Utilitywise is a UK company quoted on the AIM market of the London Stock Exchange. For more information, please visit www.utilitywise.com.

Chief Executive's Statement

I am pleased to report on the continued strong performance of the Group delivering another period of impressive revenue and profit growth and making good progress on a number of strategic goals whilst driving growth in all of our KPIs.

Alongside driving our financial and operational performance, we ensure that we do not lose sight of continued quality assurance for our customers. Our focus on operational excellence has continued with our Trusted Advisor strategy being deployed, a strong positive Net Promoter Score which is independently managed, and a continued focus on the customer journey.

KPIs

 
                                 Six months    Six months 
                                  to January    to January 
                                     2015          2014      Change 
 
 Energy consultants at period 
  end                                449           347        +29% 
 Secured pipeline (gross 
  secured future unrecognised 
  revenue) at period end          GBP23.5m      GBP23.8m      (1)% 
 Total Group customers             22,048        17,903       +23% 
 

We also regard the main financial indicators such as revenue, gross profit and EBITDA as important measures and these are disclosed as such throughout.

Progress by division

During the period the Group operated from two distinct divisions. The performance of both divisions is reported separately and as such we have chosen to discuss our Enterprise and Corporate divisions in turn below.

Enterprise

Our Enterprise division is the foundation of the Utilitywise business, focusing on small, medium and multi-site opportunities. We have well established trading relationships with a number of major UK energy suppliers and provide services to our customers designed to assist them in achieving better value from their energy contracts. Utilitywise negotiates rates with energy suppliers on behalf of business customers and provides an account care service.

Revenue in the division grew 47% to GBP24.3m (H1 2014: GBP16.5m) with gross profit increasing 51% to GBP10.6m (H1 2014: GBP7.0m). This growth was despite operating from a similar revenue generating average headcount as the increase in Energy Consultants was made after we moved offices and towards the end of the reporting period. EBITDA increased 37% to GBP5.8m (H1 2014: GBP4.2m). In addition, we have seen a consistent renewal rate above 80% by meter volume for our Enterprise customers.

During the period, recruitment plans are in line with expectations with the number of Energy Consultants increasing to 449 as at 31 January 2015, and 549 as at 31 March 2015.

The longer term growth in our Enterprise Division is supported by the continued development of our multi-channel approach to the market ensuring we give the business customer the choice of how to engage with us when assisting them on a variety of utility management needs.

Extensions

A feature of the first half was an increase in revenue from extensions compared to the first half last year. As detailed in the 13 February 2015 trading update, following the introduction of new, longer term energy supply contracts by several energy suppliers, Utilitywise focused on extending and renewing energy contracts for its existing customers during the period. We successfully extended contracts for existing customers which both strengthened customer relationships whilst securing revenue, profit and cash flow over the longer term for the Company. These extensions both secured further price certainty for customers and generated revenue for the Group in the period. Renewal and extension revenue represented approximately 42% of Enterprise revenue in the period up from 32% in H1 2014.

With this type of contract, 85% of revenue is recognised when the contract is renewed or extended. These contracts are not included in the Company's secured pipeline.

Although extensions will continue to be a feature going forward, post period end we have increased our efforts towards the acquisition of new customers, which we have been successful in converting.

New customer acquisition

We continued to increase our contracted customers during the period, increasing the total customer base to 22,048 as at 31 January 2015 (H1 2014: 17,903). This represents an increase of 23% when compared to 31 January 2014. 58% of revenues in the period came from new customers.

The value of the Company's new contracts are added to its secured pipeline once the contract is signed, and on its go live date, 85% of the value of the contract is recognised as revenue and up to 80% of the cash associated with the contract is due.

New customer acquisition has continued to be an important priority for the Group. I am pleased to report that as at the 31 March 2015 we have secured 1,061 new customers since the period end. March represented the highest monthly customer acquisition performance for the Group in its history.

Corporate

The Corporate division consists of a broad array of products and services designed to assist companies with greater energy needs to manage their energy consumption.

During the period, the Corporate division enjoyed good revenue growth with revenue in the division increasing 37% to GBP6.1m (H1 2014: GBP4.5m) and gross profit increasing 43% to GBP2.9m (H1 2014: GBP2.0m). This growth was supported by significant customer wins in the medium sized business space. EBITDA increased 61% to GBP1.9m (H1 2014: GBP1.2m). The renewal rate by meter volume increased to 98%.

Group

Investment