Robin Hood Energy needs to “get a grip” of its performance after reporting a £23 million loss for the 2018-19 year, a Nottingham City Councillor has said.
The council-backed energy firm, which supplies a number of other retailers through white label agreements, blamed a “particularly complex” energy market reliant on wholesale prices, regulatory changes such as the price cap and its own operational performance. It added that it was undergoing a strategic review to “consider all options for the supplier” following the heavy losses.
Speaking to Utility Week Andrew Rule, a Conservative councillor for the city’s Clifton West ward, said: “I think the political leadership have got to get a grip on it, I think they have not given it the scrutiny that they should have done.”
He further expressed concern that Robin Hood director and former chair Steve Battlemuch and Audra Wynter, who is also a director, both sit as chair and vice chair respectively of Nottingham City Council’s audit committee.
“The chair of the audit committee needs to be much more arm’s length, it doesn’t look particularly transparent or effective”, he added.
One industry chief, who did not wish to be named, described the situation at Robin Hood as an “absolute travesty”.
They said: “It’s a complete misuse of council funds if you ask me. How much were the two directors paid off while the company lost £23 million? They may as well have given everyone in Nottingham £100 and gone home.”
Despite the company’s losses, it did report a £29 million increase to its revenue, which stood at £98 million. Furthermore, it saw an increase in the number of customers it served – reporting an increase of more than 50,000 meter points to 220,000.
Responding to the results, which were published almost three months later than the initial December deadline, interim chief executive Jeff Whittingham said a strategic review of the business was started in January this year and reiterated the company’s core mission.
He said: “Robin Hood Energy was set up to look after vulnerable customers and the fuel poor, that is the incredibly important mission and a mission that I, the management team, and the people in the business, very much believe in.
“We believe that energy should be affordable for people, people should be able to pay to heat their homes and that energy should be used responsibly. Robin Hood Energy will continue to operate in this market place and we as a team will make this business more financially viable.”
Whittingham added that the company has already identified a number of cost-saving initiatives and is in the process of implementing them.
“The key objectives now are to find further efficiencies in our processes, ensuring we continue to provide a great customer experience, rebuild confidence in our business, and deliver for our shareholder and most importantly the people of Nottingham”, he added.
A spokesperson for Robin Hood said the investigation following the suspension of Scholes and Bain had yet to be concluded and that it would be inappropriate to comment further and declined to comment how much the pair had been paid during this period.
Last year it was revealed that Robin Hood Energy was one of four suppliers that had failed to pay its renewables obligation (RO) to Ofgem. Nottingham City Council loaned the company £9.4 million to pay off the debt. Furthermore, the financial report says an additional loan of £2.7 million was borrowed in February to assist with cashflows through the end of winter.
A company spokesperson confirmed that the loan for the RO had yet to be paid back to the council and that the terms of repayment had been renegotiated in order to help the business through the winter months.