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They would have to announce to the market if they were making significant redundancies. I would imagine that both staff and investors are worried - so an update would be appreciated.
Morning all, Do you know think that they could be moving things around behind the scenes and relaunch under EIC and kill off Utilitywise, the brand is damaged in the industry.
Post on ADVFN forum says they've "heard" it will be bust before Xmas. Could be hearsay but the poster does have a decent track record.
The BD are in a difficult position. They have warned on multiple occasions over the last 7/8 months that the last 6 months accounting period will not meet expectations. They can't really come out and squash anything as the fact is there will be bad news with the next set of results. So what are they supposed to say to inspire confidence that they already haven't. They have nothing concrete so it would just be "yes the figures are poor but we've sorted it and it's getting better....wasn't out fault it was the old bunch"!
Why do this? Split out the business that isnt making any money and either sell or go bust?
mobile.twitter.com/EICinsights/status/1061965777568518144
I hope this evening the BOD are crafting an RNS to update the market. Surely, if confidence is there in the business it makes sense to do this, or it will continue to fall.
With the huge falls, founder selling out and son in competition with the business I would have thought that they should issue a statement to reassure investors.
Interesting to see that they’ve re-branded Corporate Division as Energy Intelligence Centre. EIC was the companybthat became Corporate Division when it was acquired 5 years ago (though it was Energy Information Centre back then).
They have a £25 million RCF with RBS due to mature in April 2019. They breached 2 covenants around earnings ratio with RBS that were waived. Upon renegotiating the covenants they breached a further covenant around capital expenditure, again RBS waived this. They have £15 million in debt. In terms of the next update it is incredibly unlikely good news will follow as they stated in July 2018;
"However, the significant delay in the completion of the 2017 year-end audit has had a somewhat destabilising effect on several key stakeholders of the Group, including colleagues in the short-term. Accordingly, the Board now expects the Enterprise division, in particular, to have a softer second half of the financial year, due to these short-term uncertainties."
They don't have a lot of headroom in terms of debt to RCF ratio, a further supplier claw back could easily send them over the top.
They are leaking cash everywhere £2.2 million in settlements/legal fees with competitors and customers. Restructuring costs £984k, a charge of £509k as result of dispute with competitor, staff settlement payments of £678k, additional audit costs £450k.....not an exhaustive list
Quite unbelievable how badly this place has/is being run.
Source; https://markets.ft.com/data/announce/detail?dockey=1323-13576600-5E30ANHN58ID7AUU8C1AELNQ9K
Article in the Business section of The Sunday Times. I suspect he has bigger investments to worry about than Utilitywise
Morning, read online that Woodford is selling a lot of shares from his portfolio due to clients removing their money from under his management, due to poor performance. I know he holds a big stake in Utilitywise and not seen anything about his selling his position but he could have and would help explain some of the sudden price declines.
I can’t see how they could possibly raise equity when it is glaringly obvious that the management appears to be absolutely clueless. Perhaps selling hot dogs will be their next inspired offering.
Huge debt in this business with Banks. The covenants will be under stress - can only see 2 outcomes for this company, either raise equity or administration.
If you believe what the board spouted on T.A.on the fourth of September.
You would believe the huge selling done by slippery Geoff was to crash this company. IMO.
I’m in for a loss of six g if they go belly up ,did trade well in the earlier days,they even paid dividends 🤩😂
I wrote my holding off quite a while ago when slippery got shown has a fraud. To late to run 🏃♀️ to the exit then though.
Will be interesting to see if BF tells porkies also 🤔
We won’t know until next announcements 🥴 GL all holders moaners or die hards 😭🙏🏼
Not sure what your point is. I have already stated that I held a few shares. I bought 200,000 at IPO and sold most at £2.00’ish. I retain a small number but I have written them off. I have shared my thoughts regarding the current strategy regarding trying to cross-sell other services. I have expressed my views regarding the potential value of the Client-base. The points regarding the special terms they had with certain Suppliers are well documented. The information around their revised accounting treatment is in the public domain so you haven’t told us anything new. I would love to know what your point is? Are you cheesed off because you’ve liost money? Are you desperately trying to ramp (good luck with that!).
I give up - you and flummoxed might be shareholders although I’m not sure but one things clear you are both totally biased and lack a real understanding of what really has happened/ is happening
I really do give up - goodbye and good luck
It’s well known in the industry that they had ‘special terms’ in place with at least 1 Supplier whereby they could place new (or renewal) contracts with that Supplier and receive 80% of the commission value shortly after contract signature. So without proper validation in place their sales staff were incentivised to nominate unrealistically high usage figures to generate huge commissions for UTW (and therefore themselves). By the time this was unearthed many had pocketed their money and jumped ship. Of course the Suppliers in question have to take responsibility for allowing this to happen.
What?! An auditor would impose a policy in which more revenue was recognised than the upfront cash the company received for those contracts (which in itself is risky) - come off it! that's just plain ridiculous!
IFRS15 simply changed the accounting policy to something more sensible, stopping practices like that.
Its clear the consumption levels are way below what was expected, further proving that this high risk strategy was utterly flawed (see post by others) and masked only by writing more and more poor business. Perhaps they weren't as expert in the industry as they made out, fundamentally not understanding that businesses would invest in efficiency & reduce usage over time, and hence (some may say) incompetent, as STILL they went after this frankly absurd revenue recognition policy to inflate the SP & failed to put in the controls they (and you) say are now there. Either that or they DID understand, and the implication is something quite different. I wont offer my opinion here for fear of being silenced.
I'm still with you on the value of the base book however. If this business is profit making, and if its customers are genuinely there, then the current SP WAY undervalues this. Surely someone will come in post results and snap this up. As much as I've lost, I'm actually considering putting more in. Even if it were taken private, the SP offer would be above what it is now.
Interesting on the services offered in the Management Plan. Why would they abandon them if they could help differentiate and drive margin? Would seem a very poor move on the face of it
The historic revenue recognition policy was thoroughly communicated to all of us as shareholders and indeed was imposed by BDO the last auditors. IFRS15 demanded a new policy so there was no management plot to deceive at all.
Also contract consumption estimates were tested for years and proven to be within the 15% provision we were all told about so again nobody was misled.
One supplier allowed nominated AQs and both they and UTW were caught out and new controls established.
All other leakage is due to competition who arrange often illegal/fraudulent COTS - a practise UTW I believe now control and seek to prevent.sadly the live book was attracted however leading to higher leakage/ lower actual as contracts simply did not run their full term consumption.
Finally UTW used to promote their Utility MNagement Plan that has a whole host of services that added real value - sadly they seem to have abandoned them leaving no differentiation and a margin squeeze. All IMO.
My account was suspended for potentially libellous posts, and my posts (some of them) were deleted. Looks like I irked someone by posting enough truth for it to hurt.
I made the mistake of implying mis-selling in the past at UTW. I will state for the record I retract that.; what i meant to express (but chose words poorly however) is the fact that commissions were overpaid for inflated contracts written in the period the previous CEO was in charge, and were clawed back by one angry supplier in 2017. I doubt that is only issue UTW are facing of this sort, but just the only one that has been announced. My bet is that the new team walked into a nightmare and have been unable to get out of it as its still going on. They wont have the resources to invest in growth.
The reason we are entitled to express an opinion ProudNElad is because people like kevver and me have invested heavily into a business that has IMO deceived its shareholders with overly aggressive accounting and a valuation based on inflated contract values. People can draw their own conclusion about who knew what was going on.
No-one is crucifying the defenceless, we’re merely pointing out the infuriating fact that the ex CEO has not had to answer for this, and instead ditches his remaining shares (having had millions lets not forget) in one go dragging the SP still lower, (which is his prerogative of course) but then has the audacity to be supporting a new company that looks like its attacking the old one.
Lastly Energy Audits are ten a penny, and not differentiation. They are offered by every tom dick and harry broker to 'justify' broker fees - is this what you mean by protecting margin?? I don't know what wise life is, but if its another audit type service the same point applies.
I do agree with you however that the current base and renewal potential has real value, but Handofjohnson makes a good point about the market being vastly different now so those renewals will be harder to do, and customers are much much wiser, and are sick of having been called relentlessly for years.
In sum, and IMO the previous team got lucky with market timing & no competition, but got greedy and inflated the books selling us a beautiful story that was rotten inside. The new team bought the same as we did and unless they can make it work wont last as someone will see value taking the base off their hands.
Not our best of days today... both the SP and the comments are ****.... imho ... of course.... please put us out of our misery and issue some numbers on Tuesday.... for the love of g o d .....
I agree that BF couldn't really have picked a worse time to join, having said that he has done nothing/little to prevent the on going issues. His appointments have been very disappointing. With no experience of the industry himself, he recognised there were leadership changes required, however he just bought in people from Sage & Northgate who he had worked with before who also had little/No industry experience. Although I'm being critical of the diversification - something I believe should have been done incrementally, years ago - there is little other option. The cash flow issue can't be rectified without doing so as there is no way of speeding up supplier payments from their core business. The gravy train of upfront payments ended in 2014, at that point costs should have been drastically streamlined and a new business model implemented. A further issue that BF could not have foreseen is large increases to wholesale prices, which significantly effects the margin UW can apply to new and existing customers when re-contracting. The average commission per client was around £1500, this was with a wholesale power price of around 10p per unit. This allowed UW to input a 'decent' margin for themselves and not 'rip off' (in an obvious sense) the client. The wholesale price is now around 14p - if an existing customer enters into a conversation around renewing their contract and is informed of a +50% increase, they will shop around. UW was one of the first large broker consultancies, however competition has grown massively within this sector. There are now over 3000 brokers offering identical services, with most not having to contend with the inflated costs of UW's infrastructure. There are also now cost comparison websites for business consumers that were previously not available, and far more new and aggressive suppliers looking for their stake in the market.
Just to play devil's advocate, he can't have had a clue what he was walking into when he took the role. On paper (and purely on the basis of past results) he can't have known what horrors would emerge. Remember, their accounts were independently audited twice per year. And what about the non-Exec' Directors? Where were they in all of this? I bet Jeremy Middleton is wishing he'd asked more questions? He's about £7m out of pocket from what I can tell. Back to BF, I don't know what he could (can) possibly do to reverse this slide. Cost-cutting is important. Trying to cross-sell other (lower margin) services is all very well if the customer-base is growing but there are no signs that this is happening. Trying to sell these services to existing customers will be slow and hard.
A agree. BF doesn’t seem to understand the business and has been/is trying to convert it from and energy consultancy (with a suite of products that allowed differentiation) to a largely digital switching ‘me too’ provider. UTW can’t possibly succeed here as they don’t have the budget nor skill set.
I don’t understand why the board and shareholders aren’t calling for his head?
The only option is to announce a ‘strategic review’ and hoist the for sale sign.
The client bank, value of retention and renewals has real value and well above the current narket cap!
I completely agree with your latter comments. These new products/ services, as you state, are low margin as UTW staff add no value.
Sadly many products and services that did add value and protect margin have been abandoned eg wise life, energy audits etc etc and as a result UTW is less able to differentiate. With much higher fixed costs and extortionate overheads the business is under real pressure IMO