Utilitywise plc Trading Update (6359Z)

TIDMUTW

RNS Number : 6359Z

Utilitywise plc

04 September 2018

4 September 2018

Utilitywise plc

("Utilitywise" or the "Company" or the "Group")

Trading update

Utilitywise, a leading independent utility cost management consultancy, today provides an update on trading for the financial year ended 31 July 2018 ("FY18").

Enterprise division

As previously announced in the FY18 interim results, the order book delivery of the Enterprise division has been impacted by a number of internal and external factors, including inter alia:

   --     Further strengthening of internal controls; 
   --     Commercial decisions taken by management to improve the quality of business: 

o Discontinuance of trading with uneconomic sub-brokers in its partner channel;

o Discontinuance of the practice of seeking significant additional same supplier renewal contracts in the final month of each six-month accounting period, with focus changed to maintenance of a more "normalised" level;

   --     Commencement of a new inbound channel, in line with the Group's "Strategy for Growth"; 

-- The significant adverse impact on the business during the second half of FY18, as a result of the delay in announcement of the Group's results for the year ended 31 July 2017 ("FY17") and temporary suspension of the Company's shares from trading. The operational and commercial impact was greater and more far-reaching than the Board had expected and, as a result:

o Order book delivery in the year, on a like-for-like basis at the expected "go-live" rate (see below), was GBP55.6m, a 16% reduction compared to prior year (FY17: GBP66.1m).

o Closing gross order book(1) at 31 July 2018 was GBP54.7m, a 17% reduction compared to GBP66.0m at 31 July 2017.

Notwithstanding the challenges the business faced during the period, there were a number of positive key performance indicators:

-- Observed "go-live" rate of customer new utility contracts of 80.3%, compared to 76.2% in FY17, leading to an increase in the expected proportion of delivered contracts that subsequently become revenue for the Group, as a result of improved controls and quality of business;

-- Order book delivery from the newly launched inbound channel of GBP1.5m in the year (FY17: GBPnil); and

-- Enterprise customer numbers of 42,200, an increase of 3% compared to 41,100 at 31 July 2017, including the impact of the new inbound channel.

As previously announced, the Group appointed PricewaterhouseCoopers LLP to be its external auditors in June 2018. The Group is reviewing its revenue estimation methodology as part of its FY18 year-end audit process, in light of the adoption of the accounting standard IFRS 15 (Revenue from Contracts with Customers) on 1 August 2017. A further update will be provided in due course, once the review is complete.

Corporate division

FY18 saw continued progress in the Corporate division, with an increase in Underlying EBITDA(2) of 252% compared to FY17.

As previously announced in July 2018, the Group is collaborating with Vodafone and Dell EMC to launch an innovative Internet of Things offering to the marketplace. FY18 revenues from the Group's "intelligent buildings" proposition were 25% higher than FY17 and further traction in these commercial relationships is expected during the new financial year.

Group net debt

Group net debt at 31 July 2018 of GBP17.5m, a reduction of 8% compared to net debt of GBP19.0m at 31 July 2017 and a reduction of 10% excluding non-cash changes in net debt. The net debt as at 31 July 2018 includes net bank debt of GBP14.3m, which is funded by the Group's GBP25m revolving credit facility.

Brendan Flattery, Utilitywise CEO, said:

"The second half of the financial year was challenging, for reasons that were well-publicised, as the Group continued to deal with a number of legacy issues. However, we have also remained focused on delivering our Strategy for Growth 2021 and have already taken some significant steps to capture the considerable growth opportunities we see in both the Enterprise and Corporate divisions.

We expect the new financial year to be key as we see increased progress in the execution of our strategy. In the Enterprise division, this will mean continued improvements to efficiency and profitability as well as the optimisation of our channel mix, including growth from our new inbound channel. In the Corporate division, we expect further revenue growth from our Internet of Things proposition, with which we are delighted to collaborate with Vodafone and Dell.

Despite the issues we have faced, the opportunities available for growth mean that we remain excited about the long-term prospects for Utilitywise and delivering value to shareholders."

(1) Closing order book stated on 100% basis, before allowance for go-live rates and projected under-consumption

(2) Underlying EBITDA is earnings before interest, taxation depreciation and amortisation, stated before exceptional items

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

For further information

 
 Utilitywise plc                                    0330 303 0233 
 Brendan Flattery (CEO) 
 Richard Laker (CFO) 
 
 
 finnCap (NOMAD and broker)                         020 7220 0500 
 Matt Goode / James Thompson (Corporate Finance) 
 Andrew Burdis (Corporate Broking) 
 
  Liberum (Joint broker)                              020 3100 2000 
 Robert Morton / Steve Pearce 
 Redleaf Communications                             020 3757 6865 
 Robin Tozer / Elisabeth Cowell                     [e-mail] 
 

Utilitywise is a leading independent utility cost management consultancy, which has established trading relationships with a number of major UK and European 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.

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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September 04, 2018 02:00 ET (06:00 GMT)