Release Date: September 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Good Energy Group PLC (LSE:GOOD, Financial) reported a strong profit for the first half of the year, only 23% shy of the full-year profit from last year.
- The company maintains a robust balance sheet with GBP40 million in cash, transitioning to an asset-light business model.
- The Board announced a 10% increase in the interim dividend to 1.1p.
- Good Energy Group PLC (LSE:GOOD) acquired JPS, expanding its footprint in heat, solar, and storage installations across southern England.
- The company is now an accredited B Corp, the only domestic supplier in the UK to achieve this certification, highlighting its strong environmental credentials.
Negative Points
- The energy market remains volatile, with a 10% increase in the off GEM price cap driven by fluctuating gas costs.
- The electric vehicle market has shown signs of slowing growth in registrations, creating some uncertainty.
- Despite positive interim results, the company had previously swung into a loss in the second half of last year due to the reversal of the energy crisis effects.
- The integration of newly acquired businesses, such as JPS, is still ongoing and may present operational challenges.
- The company faces external pressures from international market price movements, which could impact future profitability.
Q & A Highlights
Q: Can you elaborate on the financial performance for the first half of the year and how it compares to last year?
A: Nigel Pocklington, CEO: The first half of this year showed a strong profit, which is 23% shy of the full-year profit from last year. This is notable given that last year's first half was marked by abnormal profitability due to the energy crisis. This year, the market has been more stable, leading to a more normal business pattern. The Board has reiterated guidance on our full-year outlook.
Q: What are the key changes in the Services division, and how is it performing?
A: Nigel Pocklington, CEO: We are moving towards reporting the Services division as a separate segment by the full year. The Services division is growing, with revenue increasing. We acquired JPS in the first half of the year, enhancing our capabilities in heat, solar, and storage installations across the south of England.
Q: How is the company's cash position, and what are the implications for shareholders?
A: Nigel Pocklington, CEO: We have GBP40 million of cash on the balance sheet, which is crucial for our transformation into an asset-light business with a strong balance sheet. This cash position, combined with our profit performance, has allowed the Board to announce a 10% increase in the interim dividend to 1.1p.
Q: Can you discuss the recent regulatory developments and their impact on Good Energy?
A: Nigel Pocklington, CEO: Ofgem reviewed and approved our derogation from the price cap, confirming that our business model supports UK small generators and links consumers with renewable generation. We are also one of the few suppliers offering an hourly matching product in the business energy market, appealing to large corporates focused on carbon reporting.
Q: What is the significance of Good Energy becoming a B Corp?
A: Nigel Pocklington, CEO: We are now an accredited B Corp, the only domestic supplier in the UK to achieve this status. This certification underscores our strong environmental credentials and purpose-driven business model.
Q: How is the company addressing the volatility in energy tariffs?
A: Nigel Pocklington, CEO: The recent 10% increase in the Ofgem price cap is driven by gas cost volatility. We agree with the government's view that embracing renewable power is the long-term solution, as it is the only energy source that the UK can be self-sufficient in and not subject to international price movements.
Q: What are the company's strategic priorities in the context of the new government's energy policies?
A: Nigel Pocklington, CEO: The new government's policy agenda is favorable, with changes to planning reforms and a focus on community energy and rooftop solar. These align with Good Energy's core purpose and position us well for the next phase of the energy transition.
Q: Are there any plans for further acquisitions in the Services division?
A: Nigel Pocklington, CEO: Yes, we are looking to invest further in acquisitions to expand our national footprint and benefit from additional scale. We see strong demand for solar installations, particularly on the commercial side.
Q: How is the electric vehicle market performing, and what is Good Energy's role in it?
A: Nigel Pocklington, CEO: The electric vehicle market had a slow start this year, but recent numbers are more positive. Our Zap-Map platform continues to perform well, with over 1.6 million downloads and nearly 1 million registered users. The annualized revenue run rate is above GBP2 million, and subscriber numbers are growing.
Q: What is the outlook for Good Energy in the near future?
A: Nigel Pocklington, CEO: The outlook is very positive, driven by favorable government policies and strong demand for our services. We expect further growth and potential acquisitions, particularly in the south of England, to enhance our market position and scale.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
