Utilitywise Regulatory News (UTW)

Utilitywise plc

("Utilitywise" or the "Group")

Trading Update

Utilitywise plc (AIM:UTW), the leading independent utility cost management consultancy, today provides an update on trading for its financial year ended 31 July 2015.

The Board is pleased to announce that revenue for the period is expected to be slightly ahead of market expectations at approximately £69m, representing growth of c.42 per cent. against the prior year.

During the second half of the financial period ("H2") the Group:

· significantly increased the new energy consultant headcount in the Enterprise Division

· accelerated the investment in our multi-channel strategy which included further growth in our field sales team

· invested in our marketing function, specifically the initiation of our ecommerce capability

· continued the investment in our Trusted Advisor position through the development of our 'Utility Management Plan' and the deployment of a new Customer Engagement Team

· continued to invest in our European trials in key geographies and in creating our TPI model in each

· continued to strengthen the Group's management team

As a result, EBITDA is expected to be slightly below market expectations.

The Group net debt at 31 July 2015 was approximately £7.5m. The second half of the financial period saw a level of extension business which was similar in proportion to the first half whilst the new increased headcount has built momentum in acquiring new customers. A combination of the increased costs and the continuation of the extension business at these levels is reflected in the above Group net debt.

Enterprise Division

In the Enterprise Division, which focuses on small, medium and multi-site opportunities, the levels of new business in H2, and in particular in Q4, have been strong measured in terms of both contract extensions and, more importantly, new customer acquisitions. In Q4 the Group generated an increase in the levels of business secured from new customers.

The Group also benefited from a continuation of revenue from existing customer contract extensions in the second half whilst the additional headcount started to contribute to revenue and the new customer acquisition focus gained momentum. As a result, the Enterprise Division customer retention rate remained in excess of 80 per cent. at 31 July 2015.

Whilst revenue from contract extensions remained a significant feature of H2, the Board anticipates that new business will be the primary driver of growth in the Enterprise Division going forward. 

June and July saw record levels of business, with in excess of £16m of gross revenue secured in aggregate across the two months. This momentum provides the Board with confidence in its expectations of continued significant revenue growth in the new financial period.

Following the focus in the second half on the recruitment of new Energy Consultants and the further investment in, and development of, our multi-channel route to market, the Group's revenue pipeline, representing revenue secured but yet to be recognised, stood at £26.2 million at 31 July 2015 as compared to £23.5 million as at 31 January 2015. This reflects a broadly consistent mix of new business and existing customer contract extension revenue secured when compared to H1 2015.

Energy Consultant headcount at the year end was 610, an increase of 36 per cent. from 449 at 31 January 2015 and, importantly, a significant 68 per cent. increase from 31 July 2014, when it stood at 363. As previously disclosed, the increased headcount is very focused on new customer acquisitions and customer numbers, excluding European customers, have increased to c.26,000, up from 22,048 at 31 January 2015 and 20,826 at 31 July 2014; the latter representing a year on year increase of c.25 per cent.

The Enterprise Division continues to perform well in a fragmented market that offers substantial headroom for further growth. We have managed a significant amount of positive change in the year with headcount across the Group growing from 1,021 at last year end to 1,518 this year end.

Corporate Division

The Corporate Division, which consists of a broad array of products and services designed to assist companies with greater energy needs to manage their energy consumption, performed well in the second half. Alongside the strong procurement activity, we continue to capitalise on revenue opportunities from the EU's mandatory ESOS (Energy Savings Opportunity Scheme) initiative together with other adjacent revenue streams including our recently announced RBS Mentor scheme.

t-mac Technologies Update

The integration of t-mac Technologies is progressing well and we are pleased with its revenue momentum going in to the new financial year. Whilst the immediate opportunity for t-mac's technology is within the Corporate Division, there is scope to expand its use across the Enterprise Division's customer base in the medium term.

Geoff Thompson, Chief Executive of Utilitywise, commented: 

"This was a period of further progress and significant expansion for the Group. We have increased our investment in order to support our growth plans and, as a result, we are in a strong position to continue the Group's growth momentum. Despite the physical constraint on headcount we had until the office move, we have successfully remained on track with our growth agenda through the subsequent recruitment phase, the strengthening of the management team and the acquisition of t-mac Technologies.

"Fuelling and sustaining our growth is key and, as such, we now have significantly more Energy Consultants acquiring new customers than at any time in the Group's history and, importantly, the internal infrastructure sufficiently bolstered to support them. At the same time, we are continuing to build out our multi-channel route to market and drive innovation through the introduction of new products such as controls technology into the smaller and medium size business segments, which we believe is integral to building our reputation as a trusted advisor."

Notice of Results

Utilitywise expects to announce its full year results to 31 July 2015, in the fourth week of October.

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About Utilitywise

Utilitywise is a leading independent utility cost management consultancy based in North Tyneside. The Group has established trading relationships with a number of major UK 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.

Businesses large and small rely on Utilitywise for their energy management needs. Clients range in size from single site SME's to multinationals with thousands of sites and cover the whole of the UK. In total, Utilitywise has c.26,000 UK & I customers.