LONDON (Alliance News) - Utilitywise PLC Tuesday reported a rise in pretax profit for the first-half of the financial year after revenue from its core Enterprise division experienced a significant rise, prompting the company to raise its interim dividend.
The independent utility cost management consultancy also said it has agreed to acquire cloud-based technology provider, t-mac Technologies, for up to a total of GBP22 million.
In the six months ended January 31, the company reported a pretax profit of GBP6.4 million compared to GBP4.0 million a year earlier. The company generated GBP29.9 million in revenue, up from GBP21.0 million a year earlier, as revenue from its Enterprise division experienced a 47% rise in the period.
The results led the company to raise its interim dividend to 1.7 pence per share compared to the 1.1 pence per share paid a year earlier.
The Enterprise division, which focuses on small, medium and multi-site opportunities generated GBP24.3 million in revenue in the period, compared to GBP16.5 million a year earlier, after the company recruited more energy consultants. Utilitywise said it has 449 energy consultants at the end of January, increasing to 549 consultants at the end of March.
Utilitywise said revenue also benefited from more existing customers extending their contracts which "both strengthened customer relationships whilst securing revenue, profit and cash flow over the longer term for the company," it said. The company said customer contract renewals and extensions accounted for 42% of the division's revenue in the first half compared to only 32% a year earlier.
"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," Utilitywise said.
The company's total customer base increased to 22,048 in the period from 17,903 a year earlier, which generated 58% of the division's total revenue. Utilitywise added that it has secured a further 1,061 customers between the end of January and the end of March.
The Corporate division, which provides products to assist companies with greater energy needs to manage their energy consumption, saw revenue rise to GBP6.1 million from GBP4.5 million after securing new medium-sized business customers.
Utilitywise said its total group secured revenue pipeline stands at GBP26 million at the end of March.
"We are still at an early stage in terms of the growth potential in this sector and, with the reputation and resources we have built, firmly believe that Utilitywise is now ideally positioned to capitalise on it," said the company.
"We are confident about the future prospects of the business and we have started the second half well, in particular in meeting our targets to increase consultant headcount and to acquire new customers. Our second half performance will be predicated on the continuation of this momentum," it added.
In a separate statement, the company said it has agreed to acquire t-mac Technologies, which provides business energy management systems to enable clients to monitor and reduce their utility consumption, make savings and helping them comply with government legislation.
Utilitywise will pay an initial GBP10 million, consisting of GBP6.25 million in cash and the issue of 1.8 million shares at 210.4 pence per share. The company also will pay up to a further GBP12 million in cash and shares once earn out accounts have been finalised. Of the additional GBP12 million, around GBP8.4 million will be paid in cash with the balance paid in shares.
At the open Tuesday, Utilitywise shares were quoted at 218.25p, up 4.9%.
The initial GBP10 million consideration will be paid using Utilitywise's new GBP25 million revolving credit facility with the Royal Bank of Scotland PLC.
T-mac reported revenue of GBP3.6 million and earnings before interest, tax, depreciation and amortization of GBP300,000 in the year ended March 31.
"We know that our customers are increasingly looking for rapid impact, cost-effective services that provide them with more control over their electricity, gas and water usage, to help drive their business efficiency agenda as well as mitigate against future price volatility. This acquisition continues to expand our broad range of services that address the breadth of our customers' energy needs," said Chief Executive Geoff Thompson.
In a third statement, Utilitywise also said it has appointed Liberum Capital Ltd as its joint broker and nominated adviser.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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