eEnergy Group Regulatory News (EAAS)

13 July 2021

eEnergy Group plc

("eEnergy" or "the Group")

Trading update for the year ended 30 June 2021

eEnergy (AIM: EAAS), a leading Energy Efficiency-as-a-Service ("EEaaS") business in the UK and Ireland, is pleased to provide an update on trading for the financial year ended 30 June 2021.

Operational Highlights

· Transformational year in which the Group has demonstrated strong organic growth, entered the energy management market and delivered its maiden profit(1) in line with market expectations, despite challenges of global pandemic

· 69% increase in eLight projects completed (FY21: 211, FY20: 125) and average revenue per project increased by 52%

· Renewable Solutions Lighting ("RSL"), acquired in July 2020, fully integrated and strengthened Group's leading Lighting as a Service ("LaaS") position in Multi Academy Trusts and State Schools

· Beond, the top 20 energy management business, acquired in December 2020, integrated into eEnergy with advanced discussions with a number of Beond's clients for Group's eLight LaaS solution

· Launched MyZeERO, the smart metering and intelligent data analytics platform

· Group delivered first combined LaaS and smart metering & analytics project in June 2021

FY21 Group Trading and Financial Highlights

· Trading for the year in line with market expectations

· Full year revenue of £13.5 million, 200% growth on FY20 revenue of £4.5 million, despite impacts of the COVID pandemic, including unexpected lockdowns

· Organic revenue growth of 75% in the core eLight business, generating revenues of £7.9 million

· Adjusted EBITDA(1) of £0.7 million (FY20 - Loss of £1.5 million)

· All core business units profitable on EBITDA basis for FY21

· Profit before and after tax and before exceptional items(1) of £0.1 million (2020 - loss £1.9 million),

· Cash balance at 30 June 2021 of £3.2 million (30 June 2020 - £1.5 million)

· Net cash (including £0.6 million of IFRS 16 lease liabilities) at 30 June 2021 was £0.7 million (30 June 2020 - net debt of £0.5 million, including £0.5 million of lease liabilities).

Energy Efficiency Division

· Full year revenue of £11.4 million (FY20 - £4.5 million), representing growth of over 150% and organic growth of 75%

· Gross margin before commissions increased 260 bps to 38.1% in FY21 from 35.5% in FY20

· Gross margin after commissions increased 350 bps to 34.4% in FY21 from 30.9% in FY20

· 211 projects installed in FY21, 69% up on 125 installed in FY20

· Average value of each installed project was £52,232 in FY21, 52% higher than the average value in FY20 of £34,320

The Group's Energy Efficiency as a Service ("EEaaS") division is anchored in the core eLight business. The primary focus during FY21 in both the UK and Ireland has been on the education sector, which has accounted for approximately 85% of revenue in FY21. The focus on education has stood the business in good stead in the face of the challenges of COVID-19. However, in the fourth quarter, the Group started to see the benefits of renewed appetite from the commercial sector and secured its largest retail contract with a leading UK health food chain.

Further, the Group secured its first integrated contract for a leading recycling business, to provide its LaaS offering with the Group's new MyZeERO smart metering & intelligent data analytics solution.

The strategic partnership with Venture Lighting, which provides the Group with eLight branded technology, signed in November 2020, has supported pricing to the Group's clients as well as contributed to improved gross margin.

Energy Management

The Group's Energy Management business, Beond, was acquired on 15 December 2020 and offers Zero Carbon procurement through eEnergy's proprietary reverse auction platform, ESG reporting and risk management and bureau services.

· Revenue of £2.2 million (since the acquisition), ahead of the Board's expectation at the time of acquisition

· Over 30,000 meters under management, an increase of 9% since acquisition

· 82% of all electricity meters transacted since 1 January have been from a renewable source

· We are in advanced discussions with a number of major clients who are interested in deploying the Group's LaaS and MyZeERO solutions

Integration continues to be on plan, with sales, marketing and finance teams integrated and common data platform delivered.

MyZeERO

As announced in April 2021, the Group established a presence in smart metering & intelligent data analytics, by making an initial investment into a newly incorporated company, called eEnergy Insights Limited ("EIL") which acquired the trade and assets (including all IP) from the administrators of Measure My Energy, a UK based developer of intelligent energy metering and analytical solutions. In June, the Group confirmed plans to make a further investment in EIL to acquire 51%, in addition to pre agreed steps with the potential to increase the Group's equity stake to 100% over time. 

By embedding the monitoring and analytics of the MyZeERO platform into its energy efficiency solutions, the Group intends to offer measured savings contracts to its clients using the certified International Performance Measurement and Verification Protocol (IPMVP) methodology to evidence the savings delivered by efficiency measures. The Board believes this will differentiate the Group's solutions from its competitors in the market.

Strategy update

eEnergy is an integrated energy services company, enabling organisations to transition to 'Net Zero' through "Energy as a Service". The Group offers:

· Energy Management as a Service; providing energy measurement, monitoring and analytics on top of core "Zero Carbon" procurement services;

· Energy Efficiency as a Service; zero upfront capital, energy reduction solutions through measured savings contracts; and

· An enhanced customer value proposition through data gathered and analysed with its proprietary MyZeERO platform.

The Group's platforms provide strong organic growth. The strategy is to complement these by acquisition of adjacent businesses in the energy services sector. The previously announced appointments of Rob van Leeuwen as Chief Operating Officer, Crispin Goldsmith as Chief Strategy Officer and Gary Worby as a Non Executive Director all provide the Group with the additional expertise and experience to effectively integrate businesses as they are brought into the eEnergy Group through acquisition.

As the Group starts to deliver measured savings contracts, it will see an increased share of our revenues come from contracted monthly recurring revenues which, in turn, will improve visibility of future revenues and lead to higher quality earnings.

Outlook

The Board is very pleased with the steps the Group has taken over the past year to deliver on its stated strategy, including the strong level of organic growth, despite the impact of the COVID pandemic on the wider market. The Group's performance in FY21 provides a strong platform for continued material revenue and profit growth across the core businesses of energy efficiency and energy management, whilst allowing the Group to invest in MyZeERO and its broader capabilities to deliver on its integrated offerings to clients. 

The Group's pipeline of opportunities continues to grow, including a number of cross and up-sell opportunities, and the Board remains highly confident that the fundamentals of the market and associated regulatory drivers provide a significant opportunity for growth in the medium term.

Whilst early in the current financial year, the Board expects revenue and profit before and after tax and before exceptional items for FY22 to be materially ahead of FY21. 

The Board has identified opportunities to accelerate revenue growth in FY22 and beyond. It has therefore brought forward investment in group management capability alongside investing in the development of MyZeERO, as well as committing to additional sales and marketing expense (including additional headcount) in both Energy Efficiency and Energy Management to support that revenue growth. 

As a result, the Board now expects revenue for FY22 to be materially ahead of current market expectations, but for profit before tax and exceptional items(1) for FY22 to be approximately 10% below current market expectations.

The Group will continue to assess strategic and accretive acquisition opportunities that will enable it to accelerate the rate of growth across the business.

Harvey Sinclair, Group CEO, commented "Whilst the last year has been tough for all businesses, I am very pleased with the significant progress we have made during our first full year as a public company. I am proud that we have been able to post our maiden full year profit(1) and deliver organic growth of 75%. We have grown our management team and executed on our strategy of acquiring and integrating value enhancing businesses which has moved eEnergy into the exciting wider energy services market. This provides an excellent platform for continued material growth in revenue and profit over the medium term." 

(1) Profit and adjusted EBITDA (Earnings before interest, tax, depreciation and amortisation) are stated before exceptional items, which are defined as transaction related costs and share based payment related costs.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. The person responsible for arranging for the release of this announcement on behalf of eEnergy is Ric Williams, Chief Financial Officer. 

Contacts:

About eEnergy Group plc

eEnergy Group plc is an integrated energy services company, enabling organisations to transition to 'Net Zero' through "Energy as a Service". The Group offers:

· Energy Management as a Service; providing energy measurement, monitoring and analytics on top of core "Zero Carbon" procurement services;

· Energy Efficiency as a Service; zero upfront capital, energy reduction solutions through measured savings contracts including its eLight and RSL LED businesses; and

· Enhanced customer value proposition through data gathered and analysed with its proprietary MyZeERO platform

eEnergy was admitted to AIM in January 2020. The Board's strategy is to use its market leading eLight LED business as the foundation to expand eEnergy as a broader energy services company via a 'buy and build' strategy in the energy management sector. The market in the EU for energy efficiency services was approximately €25 billion in 2017 and is expected to double by 2025.

eEnergy has been awarded The Green Economy Mark by the London Stock Exchange, which recognises a company's work on sustainability.

https://eenergyplc.com/