Utilitywise Regulatory News (UTW)

5 July 2018

Utilitywise plc

("Utilitywise" or the "Company" or the "Group")

Strategy Update

Utilitywise plc (AIM: UTW), a leading independent utility cost management consultancy, announces an update to its Strategy for Growth.

Strategy for Growth

On 2 March 2017, the Group announced its Strategy for Growth 2021, which included the following targets, to be delivered by the year ended 31 July 2021 ("FY21"):

· Increase in share of SME market from 2% to 7%

· Increase in SME customer numbers from c. 30,000 to c. 130,000

· 5% share of the UK & Ireland corporate controls market

These strategic targets remain in place, notwithstanding the challenges the Company has had to overcome during the last 12 months. With the Group's 2017 audit process now complete, the Board has been focusing its efforts on the strategic initiatives required to deliver against its Strategy for Growth 2021.

Evolving the proposition channel strategy

As previously announced, the Group intends to significantly increase its market share of both the micro SME market and the larger corporate market, in addition to its historically core SME market. This will require the evolution of the Group's proposition and channel strategy in order to penetrate the volume opportunity provided by the micro SME market, predominantly by focusing on driving inbound sales channels and providing multiple utilities to its customers. 

The Group will focus on operational productivity to optimise its margin in its historically core SME market, via differentiated segment and channel propositions and process automation. In addition, the Group will serve larger corporate customers through its technology-led efficiency proposition, adopting a more consultative sales approach.

Committed to serving customers in the way in which they wish to purchase and engage, the Group will continue to invest in the development of a multi-channel "go to market" strategy. Operating outbound telesales, field sales and inbound teams, underpinned by a team adding value "in-life" via upsell and cross-sell, the direction of travel is toward a digital automated experience for transactional sales, and a face-to-face account managed proposition for customers demanding greater levels of service.

Enterprise Division

The Group's Enterprise Division Strategy comprises four key stages:

1. Optimise core proposition by improving efficiencies, optimising sales channels and focusing on margin targets

2. Grow a new inbound sales channel through a price comparison website, which already exists and is generating order book and revenue, albeit at a relatively modest scale, ahead of increased investment during the year ended 31 July 2019

3. Offer other utilities - customers utilise many different products and services to run their business and our model, skills and partnerships can extend to some of those markets that customers also find difficult to manage or understand. Following the addition of water and broadband to our core offering of electricity and gas, we will expect to add further utilities to our offering in the coming months

4. In-life cross sell - using our customer relationships carefully and intelligently, we aim to expose relevant products and services to customers and add value in-life. This creates greater lifetime value and customer retention than a transactional model.

Corporate Division

The key drivers for the Group's Corporate division are:

· The evolution of the internet of things ("IoT")

· Strategic partnerships

· Digital buildings

Further information on the key drivers was announced on 3 July 2018.

International

The Board believes there is a significant opportunity to develop its core business in other geographical markets over the medium term. However, the focus of the business during FY19 will be primarily on the UK market and the targets, set out above and below for FY21, are not dependent upon significant international growth.

Cash flow

The Board recognises the need to focus on driving the operating cash flow of the business in order to drive returns for shareholders. In addition to the reiteration of its strategic targets as noted above, the Group is therefore also introducing two new financial targets, as follows:

· Underlying Free Cash Flow(1) of the Group of at least £10m in FY21; and

· A Group net cash(2) position by 31 July 2021, with the path to that position being non-linear to allow for, in particular, investments during the year ended 31 July 2019

Brendan Flattery, Chief Executive Officer of Utilitywise, commented:

"Utilitywise is firmly focused on significantly increasing its market share by broadening its target market and the services it provides its customers, in order to drive returns for shareholders. That means the Company will have to evolve its proposition and channel strategy, as detailed above, while optimising operational productivity. The strategy update outlined today will enable Utilitywise to meet its two new financial targets, as well as maximising the medium term potential from the business."

(1) Underlying Free Cash flow is defined as operating cash flow, excluding exceptional items, less interest, corporate tax and capital expenditure

(2) Net cash means cash less bank and other borrowings

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

For further information

Utilitywise is a leading independent utility cost management consultancy, which has established trading relationships with a number of major UK and European energy suppliers and provides services to its customers designed to assist them in achieving better value out of their energy contracts, reduced energy consumption and lower carbon footprint.

Utilitywise is a UK company quoted on the AIM market of the London Stock Exchange. For more information, please visit www.utilitywise.com.