30th Sep 2014 13:01
LONDON (Alliance News) - Good Energy Group PLC Tuesday reported lower profit in the first half of 2014, saying business investments which drove strong customer growth and revenue in the period also dragged on its profitability.
The AIM-quoted renewable electricity supplier posted a pretax profit of only GBP319,000 for the six months to June 30, down from GBP1.2 million in the first half of 2013.
It said profit fell due to continued investment in customer service improvements, increased marketing activity, and investments in infrastructure. The company held prices until April 2014, in what it called the "winter price freeze".
"This reflects the impact of the price freeze and operational investments to provide a foundation for future growth," the company said of its interim results in a statement.
Revenue, however, increased 22% to GBP22.2 million from GBP18.2 million in the same period a year before, driven by strong customer growth, and market share gains across electricity and gas supply, and feed-in tariff administration sites. The company said this was against a backdrop of reduced energy usage by customers due to the UK's mild 2013-14 winter.
The reduced profit had been signalled previously by the Good Energy. Last month, the group warned that further business investments it had made would hit its half-year results, but said it was expecting its full-year results for 2014 to be in line with expectations, dependant on a number of conditions.
Those conditions included making a certain level of profit through the sale of its megawatt solar farm in West Raynham, Suffolk, as well as continued customer growth and no further reduction in energy usage after demand for energy was hit by the mild winter in the first-half.
In its statement Tuesday, Good Energy said that, consistent with its earlier guidance, important investments made in the first half will enable it to continue to deliver strong growth momentum, and it expects to make further progress in the second half of the year.
"Gas and electricity customer numbers are up 35% and 82%, respectively, reflective of our attractive customer proposition, and we are on track to deliver half of our electricity from our own renewable generation assets by 2016," said Chief Executive Juliet Davenport in Tuesday's statement.
It said electricity customer numbers increased 35% to around 46,000, while gas customer numbers rose 82% to more than 20,000.
The company left its interim dividend unchanged at 1 pence per share.
Good Energy shares were trading 2.7% lower Tuesday afternoon at 215.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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