Inspired PLC sees surge in revenue driven by its Energy Optimisation division

Inspired PLC (AIM:INSE) said revenue for 2021 should be ahead of market expectations when the numbers are finally totted up.

The energy buying and usage consultancy said the outperformance was driven by the Energy Optimisation division gaining momentum through the second half of the year, delivering a record revenue quarter for the division in the final three months of the year.

Adjusted underlying earnings (EBITDA) are expected to be some 55% higher year-on-year, in line with the market consensus, with the group seeing ab improvement in margin in the second half of the year.

Group revenues are expected to be around 48% higher than in 2020, with like-for-like growth of around 38%.

Underlying cash generated from operations increased significantly in the second half of 2021 to roughly £7.0mln. Net debt at the year-end is expected to be in the region of £32.7mln, up from £30.2mln at the end of June.

The acceleration in Energy Optimisation project delivery drove an increase in trade receivables into the year-end. Management expects cash conversion ratios from now on to further improve, consistent with 2020 levels, as the Energy Optimisation division’s trading profile stabilises.

At the end of 2021, the corporate order book stood at £67.5mln, up from £63.0mln a year earlier.

Inspired said that record-high commodity prices are influencing the timing of contract renewals and the length of new contracts. Despite an absolute increase in the order book due to the contribution of the acquired order books, the impact of high energy prices has led to the underlying order book contracting during the year, which management believes is mainly a timing issue. Customer retention rates remained strong in 2021, it added.

“With the changing landscape, we are delighted to report on a period of strong growth at Inspired, both financially and operationally. The performance in 2021 reflects the continuing recovery in energy consumption, alongside a return to on-site access to client premises, accelerating the delivery and implementation of energy optimisation services,” said Mark Dickinson, the chief executive officer of Inspired.

“We are encouraged by the current execution of the business plan within the ESG Solutions division, which is gaining good traction and we expect further progress during 2022.

“The transition to Inspired PLC has enabled us to strengthen our market position as we help our clients respond to the Climate Emergency whilst controlling their costs. Looking ahead, the board remains confident in achieving its objective of evolving into the leading provider of services to help businesses respond to climate change and meet their net zero targets,” he added.

Shares in Inspired were up 2.6% at 19.5p in early deals.