The Board of Good Energy Group PLC (AIM: GOOD), the 100% renewable electricity supplier and innovative energy services provider, announces its trading update for the 9-month period to the end of September 2021.
The Board is pleased to confirm that, despite the ongoing volatility in the UK energy sector and low wind speeds in Q3 2021 impacting performance, there is no change to Good Energy's full year expectations.
The Company is taking a very cautious stance in the current environment and implementing a prudent approach to risk management. In line with prior years, the Company follows a clear hedging strategy and has also continued to meet all recent regulatory obligations and payments.
The Company is over 90% hedged for the next 12 months, weighted to this coming winter, which limits exposure to the current price volatility in the UK domestic energy market. However, the business, like the sector at large given recent supplier exits, remains subject to a higher level of market risk.
The business has recently implemented material price increases in both domestic and business supply segments reflecting the rapidly changing current market conditions, effectively leveraging the flexibility of the new billing systems implemented over the last 12 months.
While we have made positive strides in addressing the changing nature to our industry, we remain vigilant to the speed of changes and volatility in supply markets. Customer billing and collections remain a core short term focus to minimise working capital stress and maintain a cash buffer over the winter.
We have a vertically integrated business model with a strong and competitive core business; a mature wind and solar generation portfolio; and an increasing focus on small businesses and electric mobility which helps us stand out in a crowded marketplace. Our 47.5MW generation portfolio powers approximately 15% of our customer base and we continue to steer clear of the price war in the domestic supply market, with limited reliance on price comparison sites.
Significant market opportunity
September 2021 saw record breaking growth in the UK electric vehicle market (EV). One in seven of all cars sold was a battery EV, representing a 49.4% increase from September 2020. Over three times as many battery EV's were sold compared to diesel cars. These positive trends reinforce the scale of opportunity within the UK EV market, where EVs in use are expected to grow at ~47% CAGR through to 2026, as UK EV sales ramp-up prior to an anticipated 2030 ICE ban. Overall power demand from EVs is set to grow dramatically at a rate of 52% CAGR 2020-26, linked to EV parc growth, reaching nearly 14TWh of annual demand by 2026. Good Energy is perfectly placed to capitalise, through our investment in Zap-Map and EV services and products.
Zap-Map, the UK's leading EV mapping platform continues to perform strongly with positive trends on recurring revenue subscriptions, further rollout of Zap-Pay with key chargepoint operators and a pipeline of products for the remainder of 2021. Good Energy has reinforced its desire to partake in upcoming fundraising activities for Zap-Map to build on the market opportunity and accelerate growth ambitions.
The Board of Good Energy Group PLC is pleased to re-start the dividend and to announce an interim dividend of 0.75p per ordinary share for the period to 30 June 2021, as set out in the Company's interim results released on 14 September 2021. The dividend is payable on 29 November 2021 to shareholders whose names are on the register at close of business on 22 October 2021. The shares will trade ex-dividend from 21 October 2021.
The Directors have decided to continue to offer shareholders the opportunity to receive dividends in the form of new shares in the Company as an alternative to a cash dividend payment. *
Despite the short-term volatility in UK energy markets, the long-term growth drivers, particularly in the EV market, remain buoyant. We continue to expect a full-year financial performance in line with the Board's expectations, assuming normalised consumption and weather for the remainder of the year, representing another year of good financial progress and delivery of our core strategic goals.
Nigel Pocklington, Chief Executive Officer of Good Energy, said:
"Despite the recent volatility in wholesale energy prices, we remain positive on the long-term opportunity in our chosen markets. Recent electric vehicle sales data proves the acceleration of adoption and reinforces the scale of opportunity for Good Energy in this market.
"Zap-Map continues to have an exciting future as the leading EV mapping platform. We look forward to continuing to invest in the EV market and supporting Zap on the next stage of its journey.
"The challenges within the UK energy sector have been well documented, but - with 20 years' experience - we remain differentiated through strong governance, a prudent approach to risk management and a genuinely differentiated green product.
"Now that Ecotricity's cash offer has lapsed, I am pleased to be re-starting the dividend for our loyal shareholders. We reiterated our intention to resume the dividend this year and intend to maintain a progressive dividend policy. This evidences our continued commitment to all our stakeholders and progress in delivering Good Energy's strategy."