Inspired Regulatory News (INSE)

30 January 2020

Inspired Energy plc

("Inspired Energy" or the "Group")

Trading Update and Notice of Results

Inspired Energy (AIM: INSE), a leading UK energy consultant to UK and Irish corporates, is pleased to provide a trading update for the financial year ended 31 December 2019.

Group Trading Performance

The Board is pleased to report that Inspired Energy expects to announce another strong set of results, delivering solid growth in revenue, profits and cash generated from operations.

·; Group revenues are expected to be approximately 50% ahead of 2018 (FY18: £32.69m).

·; The core Corporate Division delivered an excellent performance in the year:

o Revenue growth approximately 58% ahead of 2018;

o Contributed approximately 89% of Group revenues in 2019 (2018: 84%); and

o Sustained 7% organic growth in the period (2018: 8%).

·; During H2 the Board took the decision to accelerate investment in the platform and talent to leverage the optimisation services opportunity and step up growth for FY20 and beyond.

·; Group Adjusted EBITDA* is expected to be approximately 39% ahead of 2018 (FY18: £13.75m).

·; Year-end Corporate Order Book stood at £57.5m (2018: £53.0m).

·; Cash generated from operations (excluding restructuring costs and the impact of deal fees) is expected to be approximately £14.5m (2018: £12.3m)

·; Net debt is expected to be approximately £33.0m at the year end, following the acquisition of Independent Utilities Limited and costs associated with the new £60.0m banking facility.

·; Trading remained strong throughout the year and this trend has accelerated in the opening weeks of 2020, underpinned by the order book.

 * Adjusted EBITDA is earnings before interest, taxation, depreciation and amortisation, excluding exceptional items and share-based payments.

2019 Acquisition Highlights

Completion of three acquisitions in 2019, further enhancing growth opportunities and the service offering for clients:

Ignite Energy LTD ("Ignite")

·; In August 2019, the Group completed the strategically important acquisition of an initial 40% of the issued share capital of Ignite. The optimisation services specialist expanded the Group's offering and provides significant cross selling opportunities, substantially increasing the Group's white space bank.

·; Inspired Energy retains an exclusive option, until 31 July 2021, to acquire the balancing interest of 60% at a fixed valuation.

·; Ignite's integration within the enlarged Group has started well, and in line with management expectations, with cross selling opportunities gaining traction.

·; The Board sees potential for material and sustainable revenue growth within this service offering and have stepped up its investment accordingly.

Waterwatch UK Limited ("Waterwatch")

·; In September 2019, the Group completed the acquisition of Waterwatch, which supports its clients in all areas of water cost management and brings over 20 years' experience in water audit and cost recovery. The Waterwatch team has been integrated into of the Group's Optimisation Services division.

Independent Utilities Limited ("IU Energy")

·; In December 2019, the Group completed the bolt-on acquisition of IU Energy for a consideration of up to £2.0m, of which £1.0m was paid on completion. The acquisition was financed from the Group's new banking facilities.

·; IU Energy provides energy consultancy and optimisation services, including renewable and energy efficient technology consultancy, installation and subsequent servicing and maintenance.

The three acquisitions further expand our expertise and knowledge in optimisation services to support existing and potential new customers, and integration is progressing well. We continue to see significant scope to consolidate our markets and expand the offering through bolt-on acquisitions. There remains a healthy pipeline of opportunities that we are assessing, subject to our strict investment criteria

New £60.0 million banking facility

·; In October 2019, the Group entered into a new £60.0m facility agreement with Santander UK PLC and The Governor and Company of the Bank of Ireland in order to refinance its existing borrowings and to provide further headroom to support the continued acceleration of the Group's growth and acquisition strategy.

Mark Dickinson, CEO of Inspired Energy, commented: "2019 has seen the acceleration of growth for the Group, with successful integration of the 2018 acquisitions including Inprova Finance Limited, completion of the strategically important investment into Ignite and delivery of further complementary and value-enhancing acquisitions. In addition, the Group has continued to deliver sustained organic growth.

"We remain focused on delivering our core financial, operational and strategic objectives, in parallel with broadening the service offering for our clients, to help them to optimise the value of every pound spent on utilities.

"In 2019, we increased investment in our internal infrastructure and talent in order to leverage the optimisation services opportunity and create a platform to support the expected acceleration of growth in 2020 and beyond. In addition, the Group's new banking facility provides us with greater headroom and flexibility to conclude further acquisitions in 2020. This combined with integration of acquisitions, provides the Board with great confidence that 2020 will be another year of significant progress for the Group."

Notice of Final Results

Inspired Energy expects to announce its full year results for the year ended 31 December 2019 on 31 March 2020.

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