New customers help Good Energy profits to soar
Revenues rise by 41 per cent to £90.4 million
Independent supplier Good Energy saw its profits soar by more than a third in 2016 as it continued to draw in new customers.
A vertically integrated business model and “prudent hedging strategy” helped to shield the company from volatility in the short-term power market towards the end of the year, the company said in its financial results.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) jumped 39 per cent year-on-year to £10.1 million, and revenues rose by 41 per cent to £90.4 million.
The supplier reported pre-tax profits of £1.4 million, up from £0.1 million in 2015.
Good Energy finished 2016 with nearly a quarter million customers in total – a 13 per cent increase on the previous year’s end. Electricity customer numbers were up 5 per cent at more than 71,000 and gas customer numbers grew by 14 per cent to more than 44,000.
Feed-in-tariff customer numbers increased by 18 per cent to around 133,000.
“By being a customer focussed organisation, Good Energy has created a business model that is delivering financial returns for our shareholders, allowing us to invest in our people and systems, and deliver on our purpose,” said chief executive Juliet Davenport.
The supplier undertook the first phase of a £1.7 million investment in a new customer service and billing system and a revamped website during 2016, which it plans to complete over the course of this year.
Davenport said this will allow the company to “grow its customer base, explore different marketing channels for growth, and provide a platform to launch new products and deliver economies of scale”.
“There are opportunities to deliver further efficiencies in both its costs to serve and in our overhead costs, by simplifying our processes and structures and this will be a strong focus for 2017,” she added.
Good Energy is committed to supplying its customers with 100 per cent renewable energy.
Output from its 52MW generation portfolio – 35MW of solar and 17MW of wind – increased by 5 per cent year-on-year to 80.7GWh. Unfavourable weather conditions meant wind production was down 16 per cent but the fall was more than offset by a 54 per cent increase in solar output which was attributed to the full-year output of sites connected during 2015.
Alongside the results, Davenport revealed that Good Energy has partnered with Dong Energy to supply its customers with power from the Danish firm's huge wind portfolio in the UK.
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