Inspired Energy PLC confident of long-term prospects for energy optimisation services

() has said it expects its continuing operations to report underlying earnings for 2020 in line with the market consensus.

The company, which in December sold off the division that provides price comparison and contract arrangement services for small-to-medium enterprises (SME) consumers to focus on providing energy procurement, utility cost optimisation and legislative compliance services, said its performance in the final quarter of 2020 remained resilient, despite the continued disruption caused by the coronavirus (COVID-19) pandemic.

The average energy consumption reduction by customers for the April to December period (i.e. after the first UK lockdown) is expected to be around 18{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} better than the 25{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} reduction modelled in the board’s coronavirus downside case.

The group’s Energy Optimisation Services businesses typically require access to customer sites, so naturally, the business has been hit by lockdown restrictions. October saw the start of a recovery for the Optimisation Services business but the lockdowns during November again restricted site access and caused the deferral of some projects into the current financial year.

Underlying cash generated from continuing operations (excluding restructuring costs and the impact of deal fees) is expected to be around £10.0mln, compared to £13.7mln in 2019.

Net debt substantially reduced in 2020 to about £18mln from £33.4mln a year earlier.

The corporate order book increased to £63,0mln from £57.5mln at the end of 2019, with strong customer retention and significant new customer wins.

The board expects the group’s Energy Assurance Service business to perform robustly against management’s expectations for the current year.

The group’s Energy Optimisation Services continue to experience further deferrals to projects related to the latest lockdown. To date, the overall impact of Assurance and Optimisation Services is expected to be neutral over the full-year against the board’s expectations.

“The impact on the financial performance of the group for FY2020 [the fiscal year of 2020] is a consequence of the challenges caused by the pandemic, which are outside our control. The board is pleased with the continued outperformance of the group’s Corporate Energy Assurance Service lines and is confident that Energy Optimisation Services will regain strong momentum once restrictions on movement are lifted,” said Mark Dickinson, the chief executive officer of Inspired Energy in a statement.

“The group remained cash generative and has a strong balance sheet as we look to continue to execute on our successful acquisition strategy. The board remains confident there is a strong and growing demand for optimisation services as ESG [environmental, social and governance] becomes a higher priority for corporates,” he added,

Shares in Inspired Energy were up 1.8{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} at 14p in early trading.