Inspired PLC taking steps to mitigate possible Gazprom UK failure

Inspired PLC (AIM:INSE), the energy consultant, said that it has already started to take mitigating action in the event Russian state-owned group Gazprom shuts down in the UK.

“We have proactively considered the impact of this event in its entirety and are already focused on the mitigating actions we can take,” said Mark Dickinson, Inspired’s chief executive.

Reports over the weekend suggested Gazprom UK, which is based in Manchester, is facing possible collapse due to an exodus of customers following the imposition of sanctions after the Ukraine invasion and has put itself up for sale.

If Gazprom UK were to close, Inspired said that it would affect 5% of customers with contracts directly with the Russian group and indirectly through their supply chains.

“Should Gazprom cease trading and the disruption arising from this not be possible to mitigate in the short term, then the board believes that the potential impact could be up to c.£3mln to its expected FY2022 EBITDA,” said Inspired in a statement. 

Preston-based Inspired added it believes that would be an extreme scenario, but if it occurs, the company would still comfortably be able to meet its banking covenant and liquidity tests. 

“More widely, the group continues to take every opportunity to help all customers mitigate the cost of energy and manage their energy consumption during this energy crisis,” Dickinson added. 

 “Whilst the potential impact on the financial performance of the group should Gazprom cease to trade in the UK would be disappointing, these factors are unfortunately outside of the group’s control.”

Gazprom UK does not sell Russian gas directly but resells from other suppliers, including those based in the North Sea. The weekend reports said it supplies around a fifth of UK businesses.

House broker Shore Capital added that outside of the Ukraine situation and potential impacts to revenues and profitability, it remains confident on the direction of travel across the  Inspired group.

“Strong underlying progress is still expected, being driven by ESG considerations with clients.

“Customers contracted with Gazprom for energy will also need to replace this supplier with alternative arrangements, notes Shore Cap, to which it anticipates Inspired to have an ongoing role.”

Shares improved during the day to be 9% lower at 15p.

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