Inspired Energy PLC – 2018 Preliminary Results

Inspired Energy PLC – 2018 Preliminary Results

Inspired (AIM: INSE), a leading UK energy procurement consultant to UK and Irish corporates, announces record preliminary results for the year ended 31 December 2018.

HIGHLIGHTS                                                                                                                                         

Financial Highlights

2018

2017
Restated1

Movement

Revenue

£32.69m

£26.36m

24%

Gross Profit

£27.67m

£21.76m

27%

Adjusted EBITDA2

£13.75m

£10.44m

32%

Adjusted Profit Before Tax3

£11.38m

£8.40m

35%

Profit Before Tax

£4.20m

£2.99m

40%

Cash Generated From Operations

£10.01m

£6.45m

55%

Adjusted Diluted EPS4

1.61p

1.29p

25%

Diluted Basic EPS

0.53p

0.37p

43%

Net Debt

£23.54m

£14.79m

59%

Full Year Dividend Per Share

0.65p

0.55p

18%

Corporate Order Book

£53.00m

£39.00m

36%

Operational Highlights

  • Record revenues delivered by the Corporate Division, growing 34% to £27.3m (2017: £20.4m), contributing 84% of Group revenue for the period (2017: 77%). 8% of the Corporate Division revenue growth in the year was organic (2017: 6%).
  • Corporate Division contributed Adjusted EBITDA of £13.8m, an increase of 43% (2017: £9.6m).
  • Corporate Order Book increased 36% to £53.0m (2017: £39.0m) with strong customer retention and robust performance from significant new customer wins.
  • The Corporate Order Book provides 12 months secured revenue of £26.0m (2017: £18.6m) for the Corporate Division entering 2019.
  • Excellent cash performance with cash generated from operations up 55% to £10.0m (2017: £6.5m), further enhancing cash conversion metrics of the Group.
  • SME Division generated EBITDA of £2.4m (2017: £2.5m) with EBITDA margins increasing to 45% (2017: 41%) following streamlining of the division.
  • Completed the restructuring of the Corporate service offering by client category under a unified “Inspired” brand, which the Board believes creates a more streamlined platform to deliver organic and acquisitive growth.
  • Launch of three-year capital investment programme to raise the level of digitisation in the energy markets to ensure clients services and solutions evolve to meet future market needs over the next 3 to 5 years

Acquisition Highlights

Completion of five strategic acquisitions in 2018, further enhancing growth opportunities and client service offering:

  • Acquisition of Inprova Finance Limited (“Inprova”) for a consideration of £19.5m, funded by a £19.0m placing, completed in December 2018. In the financial year ended 30 June 2018 (being the accounting period prior to acquisition), Inprova generated revenues of £7.8m and EBITDA of £2.9m.
  • Acquisition of Inprova increased the Corporate Order Book and will provide a material contribution to Group revenues from the Corporate Division in 2019, increasing the Corporate market share and significantly strengthening the Group’s position as market leader in the UK.
  • Integration of Inprova has started well and is in line with management’s expectations.
  • Integration of Squareone Limited and Professional Cost Management Group Limited, acquired in August and September 2018 respectively, is progressing well.
  • SystemsLink 2000 Limited (“SystemsLink”) and Energy Cost Management Limited, both acquired in March 2018, are now fully integrated into the Group.

Board Transition

  • Matthew Thornton today steps down as Non-Executive Director and has entered into an orderly market agreement in relation to his holding expiring 31 March 2020.
  • The Board is now composed of two Executive Directors, supported by a Non-Executive Chairman and two Independent Non-Executive Directors.

Mark Dickinson, CEO of Inspired, commented on the results: “We are delighted to deliver such a strong set of results for 2018. We accelerated our next growth phase with five complementary and value-enhancing acquisitions, whilst continuing to deliver sustained organic growth in the Corporate Division.

Our acquisitions have further broadened our service offering and materially increased the level of the Group’s client meters under management. We continue to systematically engage with clients to quantify cross-selling opportunities and increase the accessible revenue at each meter point.

“Ensuring we continue to evolve our services for our clients is a key focus for the business, simultaneously broadening the service offering we provide and optimising the value of every pound our clients spend on utilities, so that they can focus on running their businesses.

“Following an excellent 2018, we have had an encouraging start to 2019 and I am confident that the team will deliver another year of significant growth.” 

Notes:
1.     The Group’s 2017 comparative financials restated to revise the date from which Horizon Energy Group Limited (“Horizon”) was consolidated. This timing adjustment does not change the cash position of the Group, the 2018 results or future forecasts of the Group. See Updates to Accounting Policies within the Chief Executive Officer’s Statement.
2.     Adjusted EBITDA is earnings before interest, taxation, depreciation and amortisation, excluding exceptional items and share-based payments.
3.     Adjusted profit before tax is earnings before tax, amortisation of intangible assets (excluding internally generated amortisation related to computer software and customer databases), exceptional items, share-based payments, the unwinding of contingent consideration and foreign exchange variances (a reconciliation of this can be found in note 6 of the preliminary statements).
4.     Adjusted diluted earnings per share represents the diluted earnings per share, as adjusted to remove amortisation of intangible assets (excluding internally generated amortisation related to computer software and customer databases), exceptional items, share-based payments, the unwinding of contingent consideration and foreign exchange variances.

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