Regulatory Story
Go to market news section View chart   Print
RNS
Inspired Energy PLC   -  INSE   

Half-year Report

Released 07:00 04-Sep-2019

RNS Number : 1164L
Inspired Energy PLC
04 September 2019
 

4 September 2019

Inspired Energy plc

("Inspired" or the "Group")

 

Results for the six months ended 30 June 2019

Robust start to the year

 

Inspired (AIM: INSE), a leading energy consultant to UK and Irish corporates, announces its consolidated, unaudited half year results for the six-month period ended 30 June 2019.

Financial Highlights

 

H1 2019

H1 2018

2019

% change

Revenue

£21.56m

£16.24m

+33%

Gross profit

£18.56m

£13.74m

+35%

Adjusted EBITDA*

£8.79m

£6.53m

+35%

Adjusted profit before tax**

£6.94m

£5.35m

+30%

Profit before tax

£3.23m

£2.09m

+55%

Cash generated from operations

£4.55m

£4.96m

-8%

Adjusted Diluted EPS***

0.80p

0.78p

+3%

Diluted Basic EPS

0.34p

0.27p

+26%

Net Debt

£25.09m

£19.88m

+26%

Corporate Order Book

£55.40m

£40.10m

+38%

Interim dividend per share

0.22p

0.19p

+16%

 

Operational Highlights

·   Record revenues delivered by the Corporate Division, growing 36% to £18.68m (H1 2018: £13.76m), contributing 87% of Group revenue for the period (H1 2018: 85%).

·     Continued organic revenue growth of 6% in the Corporate Division, in line with the Group's stated target.

·     Corporate Division contributed Adjusted EBITDA of £8.97m, an increase of 40% (H1 2018: £6.43m).

·     SME Division generated revenues of £2.88m (H1 2018: £2.48m), growing 16% organically in the period.

·    Corporate Order Book increased to £55.4m in the period (31 December 2018: £53.0m) with strong customer retention and robust performance from significant new customer wins.

·    The Corporate Order Book provides 12 months secured revenue of £28.4m (31 December 2018: £26.0m) for the Corporate Division.

·  Underlying cash generation was robust in the period, with cash generated from operations (excluding restructuring costs and the impact of deal fees) of £6.8m (2018: £5.8m), an increase of 17% over the prior period

·    Transaction fees of £1.0m, relating to the acquisition of Inprova Finance Limited ("Inprova") were accrued into 2018, but paid in the period, together with expected non-recurring restructuring costs resulting from its integration, contributed to an increase in net debt to £25.09m (FY 2018: £23.54m).

·    The capital investment programme identified at the start of the year is underway and progressing in line with management expectations, resulting in the increase in payments to acquire intangible assets to £1.05m in H1 2019 (FY 2018: £1.51m).

·     Interim dividend increased by 16% to 0.22 pence per share (H1 2018: 0.19 pence).

 

Post period end acquisitions

·     Completed the acquisition of an initial 40 per cent of the issued share capital of Ignite Energy LTD ("Ignite") on 2 August 2019 (the "Strategic Investment"), with an exclusive option, until 31 July 2021, to acquire the balancing interest of 60 per cent under the terms of an option agreement. The Board believes the Strategic Investment accelerates the Group's ability to deliver on the stated strategy to grow its market share within the third-party intermediary optimisation services market.

·     The Strategic Investment in Ignite was financed from the Group's existing facilities with Santander.

 

Commenting on the results, Mark Dickinson, CEO of Inspired, said: "Concluding 2018 with the Inprova acquisition was a significant strategic milestone for the Group. 2019 has continued at pace with the acceleration of our next growth phase, further complementary and value-enhancing acquisitions completed in parallel with sustained organic growth."

 

"The Group is well placed to deliver another set of record results as we continue to benefit from further organic growth and the net contribution of recent acquisitions. On behalf of the Board, I would like to thank all of the Inspired team for their continued hard work and commitment over the past six months."

 

* Adjusted EBITDA is earnings before interest, taxation, depreciation and amortisation, excluding exceptional items and share-based payments.

**Adjusted profit before tax is earnings before tax, amortisation of intangible assets (excluding internally generated amortisation related to computer software and customer databases), exceptional items, share-based payments, the change in fair value of contingent consideration and foreign exchange variances. (A reconciliation of this can be found in note 3 of the financial statements).

***Adjusted diluted earnings per share represents the diluted earnings per share, as adjusted to remove amortisation of intangible assets (excluding internally generated amortisation related to computer software and customer databases), exceptional items, share-based payments, the change in fair value of contingent consideration and foreign exchange variances.

 

For further information, please contact:  

Inspired Energy plc

www.inspiredplc.co.uk

Mark Dickinson, Chief Executive Officer

+44 (0) 1772 689 250    

Paul Connor, Finance Director

 

 

 

Shore Capital (Nomad and Joint Broker)

+44 (0) 20 7408 4090

Dru Danford

Edward Mansfield

James Thomas

 

 

Peel Hunt LLP (Joint Broker)

Mike Bell

Ed Allsopp

 

+44 (0) 20 7418 8900

Gable Communications

+44 (0) 20 7193 7463

Justine James

John Bick

+44 (0) 7525 324431

 

 

 

Chairman's Statement

I am pleased to present the Group's unaudited interim results for the six months ended 30 June 2019, a period in which the Group continued to deliver on all strategic fronts, achieving results in line with management's expectations.

The acquisition of Inprova in December 2018 was a significant milestone in the development of the Group, both strategically and financially, and the Board is pleased to report that its integration continues to progress well and to plan. During the first six months following completion of the acquisition, management restructured the Inprova senior management team, consolidated four operational offices into two, integrating and subsequently closing the Horsham office into the Burgess Hill office, and consolidating the Warrington office into the Group head office in Kirkham, whilst aligning central functions with Group.

The effectiveness of the integration of Inprova to date is testament to the investment made by the Group during 2017 and 2018 to develop its management bandwidth and platform to enable the realisation of operational leverage from acquisitions effectively and efficiently, without impacting service levels for clients.

 

It is important to note the Group sustained organic growth during the period in both the Corporate Division and the SME Division. The Group has a stated target for organic growth of 6% to 8% per annum and this has been achieved in the first half despite a non-repeat of the benefits of the extreme cold weather in the first half of 2018. We are confident that the strength of the Group's organic growth engine will enable us to sustain organic growth in line with our targets whilst we continue to execute the Group's acquisition strategy.

The Strategic Investment in Ignite post period end, a business which is highly complementary to Inspired's core Corporate Division, is further evidence of the Group delivering on its well-established and successful acquisition strategy. The Board believes that optimisation services represents a very significant future opportunity for the Group, leveraging its established market leading position in energy consultancy. The Strategic Investment accelerates the Group's ability to grow its market share within the third-party intermediary optimisation services market.

The Board is pleased to propose an interim dividend of 0.22 pence per share. This represents an increase of 16% over the interim dividend paid in 2018, being 0.19 pence per share.

We are delighted with the performance of the Group in the first half of 2019 and we enter the second half of 2019 with confidence. 

Michael Fletcher

Chairman

4 September 2019

 

 

 

CEO's Statement

Acquisition Strategy

·     Increased geographic footprint building our Units of Opportunity;

·  Increased number of meter points with which we have a commercial relationship, building our Units of Opportunity;

·     Additional technical and/or service capability increasing our Accessible Revenue;

·     Sector specialism and diversification increasing our Accessible Revenue; and

·     Significant opportunities for sales or cost synergies to generate further economies of scale.

 

Ignite

stated strategy to grow market share within the third-party intermediary ("TPI") optimisation services market, leveraging its established market leading position in energy consultancy.

Ignite has proven, over many years, to be capable of achieving material improvements in the energy efficiency of its clients. Inspired currently has over 500 clients within the estate and energy intensive segments who meet the Ignite customer profile and could benefit from the services that Ignite provides.

The UK optimisation services market remains relatively immature and service delivery models in this area, which are typically project based rather than recurring, will evolve over time as both customer understanding and technology develop. Against this backdrop, the Board believes that it is important the Company remains flexible and able to adapt its offering in this area in line with market developments, which complements its growing optimisation services capabilities.

The Strategic Investment is structured to enable Inspired to accelerate its own optimisation service offering to the Inspired customer base, drawing on the skills and experience of the Ignite team, whilst enabling Ignite to broaden and dilute its existing customer concentration through access to and servicing of the Inspired customer base. The Strategic Investment aligns the interests of Ignite's management with those of the Group, as the Option Consideration would capture the benefits if they are able to accelerate growth over the next two years. From the Group's perspective, the Option Agreement enables Inspired to secure ownership of Ignite at an attractive valuation, whilst retaining operational and capital flexibility.

The market for energy advisory services is a £1.2bn market opportunity. The Group provides consultancy services to clients in managing their entire energy cost equation, including both price and consumption sides of the client's energy cost equation. Procurement and energy accounting services support the client in managing the price side of the client's energy cost equation. For these services, three in four Corporate customers (defined by the Group as customers with energy consumption in excess of 0.5 Gwh per annum) in the UK use a TPI to assist them in these areas.

However, only one in six Corporate customers engage with third party intermediaries on the consumption side of the energy cost equation. This illustrates the significant market opportunity within optimisation services for the Group and Ignite will help to accelerate further growth in this area.

 

 Other Investments

I am pleased to report, post period end, the Group completed the acquisition of Waterwatch UK Limited ("Waterwatch") for a consideration of up to £0.50m, of which £0.25m was paid on completion. Waterwatch supports its clients in all areas of water cost management and has over 20 years' experience in water audit and cost recovery. The Waterwatch team will become part of the Group's Optimisation Services division, further expanding our expertise and knowledge in this area to support existing and potential new customers.

Integration of Inprova

The Board is pleased to report that the integration of Inprova continues to progress well and to plan. During the first six months, following completion of the acquisition, the Inprova operation has consolidated from four operational offices in England and Wales, to two, maintaining the Caerphilly operation, integrating and subsequently closing the Horsham office into the Burgess Hill office, and consolidating the Warrington office into the Group head office in Kirkham.

 

During the period, the Inprova Senior Management Team was restructured and support functions including Finance, I.T, Marketing, Risk and Trading team were also re-aligned into Group.  

 

This demonstrates the Group's platform to deliver operational leverage from acquisitions effectively and efficiently, without impacting the service levels for clients.

Exceptional costs

Exceptional costs of £1.2m (H1 2018: £0.9m) have been incurred in the period, which primarily relate to restructuring costs of £0.9m associated with the integration of Inprova, including the restructuring of the senior management team, consolidation of four operational offices to two, and the re-alignment of central support functions into Group.  

 

Deal fees of £1.0m relating to the acquisition of Inprova accrued in 2018, were paid in the period, driving the reduction in Trade and Other Payables.

 

Strategy

1.   Procurement: supporting clients with the selection of the best energy supply contracts

2.   Energy Accounting: supporting clients with the validation of their energy invoices and accounting processes

3.  Compliance: supporting clients with their compliance obligations with respect to energy and environmental reporting

4.   Optimisation Services: supporting clients to increase the effectiveness of their energy consumption

1.   Units of Opportunity: The number of meters in the market place, owned by clients with whom we have a transactional relationship, increased from c.350,000 to c.370,000 during H1 2019 (6% increase)

2.   Meters Under Management: the number of meters (Unit of Opportunity) covered by our core services of Energy Procurement and Energy Accounting in the UK increased from c.129,000 to c.149,000 during H1 2019 (16% increase)

3.   White Space Bank: the quantified value of cross selling our broader Compliance and Optimisation Services to existing Meters Under Management clients has increased from c.£13m to c.£50m (385%), the majority of which is attributable to the Ignite acquisition.

Corporate Division

 

Overview

·      Energy intensive

·      Commercial/estate intensive

·      Public services

·      Corporate

Optimisation Services: Expansion of our Optimisation Services Division to match client needs which are becoming increasingly sophisticated with respect to monitoring, targeting and efficiency.

 

Software Solutions: Further developing the Software Services Division to provide software solutions across the energy value chain. SystemsLink, acquired in March 2018, is central to the development of the Group's software solutions.

 

Research and Development: Continuing to develop the 'Inspired Incubator' to allow Inspired to support early stage energy and utility solutions which have the potential to add value to energy consumers in the future.

 

Corporate Division Financial Highlights

Highlights in the period include:

·      Revenue increased 36% to £18.7m (H1 2018: £13.8m), including 6% organic revenue growth (2018: 8%).

·      The Corporate Division generated adjusted EBITDA of £9.0m (H1 2018: £6.4m), a 40% year on year increase.

·      Corporate Order Book increased by 38% to £55.4m (H1 2018: £40.1m).

 

SME Division

 

Highlights in the period include:

·     SME Division returned to growth, with revenue increasing 16% organically to £2.9m (H1 2018: £2.5m which was a 19% reduction from H1 2017).

·      The division generated Adjusted EBITDA of £1.0m (H1 2018: £0.9m).

The Board continues to explore the opportunity to provide complementary services that add value to SME consumers including proof of concept expansion into Merchant Services, Insurance and Telecoms.

PLC Costs

PLC costs increased in the period by £0.3m, reflecting further investment made to increase the talent within the central functions of the enlarged Group.

Cash generation

Cash generated from operations was £4.6m, (H1 2018: £5.0m) with the reduction in the period largely reflecting the impact of the acquisition of Inprova at the end of 2018. Excluding non-recurring restructuring costs in relation to the Inprova integration and the payment of deal fees of £1.0m, which had been accrued at 31 December 2018, but paid in the period, cash generated from operations was £6.8m (2018: £5.8m), an increase of 17% over the prior period.

 

Alternative performance measures

Acquisition activity can significantly distort underlying financial performance from IFRS measures and therefore the Board deems it appropriate to report adjusted metrics as well as IFRS measures for the benefit of primary users of the Group financial statements.

Updates to Accounting Policies

IFRS 16 - Leases

The H1 2019 results herein adopt IFRS 16, the impact of which is a £0.3m increase in EBITDA and £0.3m increase in depreciation in the period, and an immaterial impact to Adjusted and Basic EPS. As outlined in the 2018 preliminary results statement, the adoption of IFRS 16 has not had a significant impact on the Group's financial statements, and therefore future forecasts of the Group remain unchanged.

 

Dividends

The Board is delighted to propose an interim dividend of 0.22 pence per share. This represents an increase of 16% over the interim dividend paid in 2018, being 0.19 pence per share.

The ex-dividend date is 24 October 2019 with a record date of 25 October 2019. The dividend will be paid to shareholders on 12 December 2019.

 

 

Outlook

Our excellent performance in the first half of 2019, underpinned by strong organic growth, provides a strong operational and financial platform for the full year. The Group is well placed to deliver another set of record results, as we continue to benefit from further organic growth and contribution from the 2018 and 2019 acquisitions.  

The Group's established acquisition strategy has delivered strong results, as demonstrated by the success achieved from the value enhancing acquisitions made in 2018, and 2019 year to date. In addition to our continued focus on delivering organic growth, we continue to evaluate varied acquisition opportunities in the sector which provides an attractive opportunity for market consolidation.

On behalf of the Board, I would like to thank all of the Inspired team for the hard work over the past six months, as we look forward to completing another exciting year of growth and development of the business.

 

Mark Dickinson

Chief Executive Officer

4 September 2019

 

 

 

 

 

Group Statement of Comprehensive Income

For the six months ended 30 June 2019

 

Note

Six months ended 30 June 2019 (unaudited)

£000

 

Six months ended 30 June 2018 (unaudited)

£000

 

Year ended 31 December 2018

(audited)

£000

 

 

 

 

 

 

 

 

 

Revenue

 

21,559

 

16,241

 

32,692

 

 

 

 

 

 

 

 

 

Cost of sales

 

(2,998)

 

(2,500)

 

(5,018)

 

 

 

 

 

 

 

 

 

Gross profit

 

18,561

 

13,741

 

27,674

 

 

 

 

 

 

 

 

 

Administrative expenses

 

(14,679)

 

(11,013)

 

(22,171)

 

 

 

 

 

 

 

 

 

Operating profit

 

3,882

 

2,728

 

5,503

 

 

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

 

Earnings before exceptional costs, depreciation, amortisation and share-based payment costs

 

8,786

 

6,528

 

13,752

 

Fees associated with acquisition

 

(269)

 

(312)

 

(2,345)

 

Restructuring costs

 

(901)

 

(568)

 

(935)

 

Change in fair value of contingent consideration

 

(51)

 

(185)

 

576

 

Depreciation

 

(598)

 

(269)

 

(569)

 

Amortisation of acquired intangible assets

 

(2,304)

 

(1,801)

 

(3,749)

 

Amortisation of internally generated intangible assets

 

(545)

 

(369)

 

(756)

 

Share-based payment costs

 

(236)

 

(296)

 

(471)

 

 

 

3,882

 

2,728

 

5,503

 

 

 

 

 

 

 

 

 

Finance expenditure

 

(650)

 

(639)

 

(1,380)

 

Other financial items

 

-

 

-

 

76

 

 

 

 

 

 

 

 

 

Profit before income tax

 

3,232

 

2,089

 

4,199

 

 

 

 

 

 

 

 

 

Income tax expense

 

(679)

 

(460)

 

(960)

 

 

 

 

 

 

 

 

 

Profit for the period

 

2,553

 

1,629

 

3,239

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

(25)

 

(37)

 

112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period and total comprehensive income

 

2,528

 

1,592

 

3,351

 

 

 

 

 

 

 

 

 

Attributable to:

Note

 

 

 

 

 

 

Equity owners of the Company

 

2,528

 

1,592

 

3,351

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to the equity holders of the Company (pence)

3

0.34

 

0.27

 

0.53

 

Adjusted diluted earnings per share attributable to the equity holders of the Company (pence)

3

0.80

 

0.78

 

1.61

 

 

 

 

Group Statement of Financial Position

At 30 June 2019

 

Note

Six months ended 30 June 2019 (unaudited)

£

 

Six months ended 30 June 2018 (unaudited)

£

 

Year ended 31 December 2018 (audited-restated)

£

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Investments

 

632

 

-

 

-

 

Intangible assets

5

58,034

 

38,813

 

59,847

 

Property, plant and equipment

4

5,694

 

1,522

 

2,083

 

 

 

64,360

 

40,335

 

61,930

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Trade and other receivables

 

23,263

 

17,481

 

21,906

 

Cash and cash equivalents

 

2,459

 

3,663

 

2,190

 

 

 

25,722

 

21,144

 

24,096

 

 

 

 

 

 

 

 

 

Total assets

 

90,082

 

61,479

 

86,026

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

5,237

 

2,942

 

7,037

 

Lease liabilities

 

695

 

-

 

-

 

Bank borrowings

 

3,892

 

2,810

 

3,047

 

Current tax liability

 

2,422

 

2,008

 

2,857

 

Contingent consideration

 

544

 

2,877

 

1,982

 

 

 

12,790

 

10,637

 

14,923

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Bank borrowings

 

23,658

 

20,484

 

22,393

 

Trade and other payables

 

141

 

18

 

92

 

Lease liabilities

 

2,226

 

-

 

-

 

Contingent consideration

 

1,211

 

863

 

1,379

 

Deferred tax liability

 

1,841

 

1,511

 

1,856

 

Interest rate swap

 

136

 

146

 

68

 

 

 

29,213

 

23,022

 

25,788

 

 

 

 

 

 

 

 

 

Total liabilities

 

42,003

 

33,659

 

40,711

 

 

 

 

 

 

 

 

 

Net assets

 

48,079

 

27,820

 

45,315

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Share capital

 

892

 

747

 

892

 

Share premium account

 

37,422

 

19,101

 

37,422

 

Merger relief reserve

 

15,535

 

14,914

 

15,535

 

Retained earnings

 

10,461

 

9,561

 

7,908

 

Share based payments reserves

 

1,597

 

1,449

 

1,361

 

Investment on own shares

 

(6,742)

 

(6,742)

 

(6,742)

 

Translation reserve

 

297

 

173

 

322

 

Reverse acquisition reserve

 

(11,383)

 

(11,383)

 

(11,383)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

48,079

 

27,820

 

45,315

 

 

Group Statement of Cash Flows

For the six months ended 30 June 2019

 

Note

Six months ended 30 June 2019 (unaudited)

£

 

Six months ended 30 June 2018 (unaudited)

£

 

Year ended 31 December 2018 (audited)

£

 

Cash flows from operating activities

 

 

 

 

 

 

 

Profit before income tax

 

3,232

 

2,089

 

4,199

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Depreciation

 

598

 

269

 

569

 

Amortisation

 

2,849

 

2,170

 

4,505

 

Share based payment costs

 

236

 

296

 

471

 

Finance expenditure

 

650

 

639

 

1,304

 

Exchange rate variances

 

(75)

 

41

 

(248)

 

Other financial items

 

51

 

185

 

(577)

 

 

 

 

 

 

 

 

 

Cash flows before changes in working capital

 

7,541

 

5,689

 

10,223

 

 

 

 

 

 

 

 

 

Movement in working capital

 

 

 

 

 

 

 

Increase in trade and other receivables

 

(1,043)

 

(696)

 

(1,689)

 

(Decrease)/increase in trade and other payables

 

(1,945)

 

(34)

 

1,479

 

Cash generated from operations

 

4,553

 

4,959

 

10,013

 

 

 

 

 

 

 

 

 

Income taxes paid

 

(1,394)

 

(1,606)

 

(1,853)

 

 

 

 

 

 

 

 

 

Net cash flows from operating activities

 

3,159

 

3,353

 

8,160

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

(819)

 

(332)

 

(869)

 

Payments to acquire intangible assets

 

(1,057)

 

(636)

 

(1,509)

 

Contingent consideration paid

 

(1,656)

 

(2,275)

 

(3,625)

 

Acquisition of subsidiary, net of cash

 

(600)

 

(4,525)

 

(25,479)

 

 

 

(4,132)

 

(7,768)

 

(31,482)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

New bank loans

 

2,850

 

4,000

 

7,400

 

Repayment of bank loans

 

(690)

 

(630)

 

(2,044)

 

Finance expenses

 

(599)

 

(639)

 

(1,049)

 

Net proceeds of equity

 

-

 

185

 

19,272

 

Repayment of lease liabilities

 

(371)

 

-

 

-

 

Dividends paid

 

-

 

-

 

(3,248)

 

 

 

1,190

 

2,916

 

20,331

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

217

 

(1,500)

 

(2,991)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents brought forward

 

2,190

 

5,183

 

5,183

 

Exchange differences on cash and cash equivalents

 

52

 

(20)

 

(2)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents carried forward

 

2,459

 

3,663

 

2,190

 

 

Group Statement of Changes in Equity

For the six months ended 30 June 2019

 

Share capital

£

 

Share premium account

£

 

Merger relief reserve

£

 

Share-based payment reserve

£

 

Retained earnings

£

 

 

Investment in own shares

£

 

 

Translation reserve

£

 

Reverse acquisition reserve

£

 

Total shareholders' equity

£

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2018

711

 

14,203

 

14,914

 

1,231

 

7,354

 

(2,618)

 

210

 

(11,383)

 

24,622

Profit and total comprehensive income for the period

-

 

-

 

-

 

-

 

3,239

 

-

 

112

 

-

 

3,351

Prior year IFRS 15 impact

-

 

-

 

-

 

-

 

222

 

-

 

-

 

-

 

222

Shares issued

(22 March 2018)

4

 

-

 

621

 

-

 

-

 

-

 

-

 

-

 

625

Shares issued

(29 March 2018)

2

 

145

 

-

 

-

 

-

 

-

 

-

 

-

 

147

Shares issued

(24 May 2018)

29

 

4,095

 

-

 

-

 

-

 

-

 

-

 

-

 

4,124

Shares issued

(7 June 2018)

1

 

37

 

-

 

-

 

-

 

-

 

-

 

-

 

38

Shares issued

(7 September 2018)

1

 

86

 

-

 

-

 

-

 

-

 

-

 

-

 

87

Shares issued

(31 December 2018)

144

 

18,856

 

-

 

-

 

-

 

-

 

-

 

-

 

19,000

Share-based payment cost

-

 

-

 

-

 

471

 

-

 

-

 

-

 

-

 

 

471

Share options exercised

-

 

-

 

-

 

(341)

 

341

 

-

 

-

 

-

 

-

Purchase of own shares

-

 

-

 

-

 

-

 

-

 

(4,124)

 

-

 

-

 

 

(4,124)

Dividends paid

-

 

-

 

-

 

-

 

(3,248)

 

-

 

-

 

-

 

(3,248)

Total transactions with owners

181

 

23,219

 

621

 

130

 

554

 

(4,124)

 

112

 

-

 

20,693

Balance at 31 December 2018

892

 

37,422

 

15,535

 

1,361

 

7,908

 

(6,742)

 

322

 

(11,383)

 

45,315

Profit and total comprehensive income for the period

-

 

-

 

-

 

-

 

2,553

 

-

 

(25)

 

-

 

2,528

Share-based payment costs

-

 

-

 

-

 

236

 

-

 

-

 

-

 

-

 

236

Balance at 30 June 2019

892

 

37,422

 

15,535

 

1,597

 

10,461

 

(6,742)

 

297

 

(11,383)

 

48,079

 

 

1.     Accounting Policies

Basis of preparation

The financial information set out in this announcement does not constitute the statutory accounts of the Group for the period ended 30 June 2019. Whilst the financial information included in this interim announcement has been computed in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). They have been prepared on an accrual basis and under the historical cost convention except for certain financial instruments measured at fair value. This announcement in itself does not contain sufficient information to comply with IFRS.

Details of the accounting policies are those set out in the annual report for the year ended 31 December 2018. The accounting policies in this announcement are consistent with those set out in the annual report for the year ended 31 December 2018 apart from the adoption of IFRS 16 Leases.  IFRS 16 is effective from periods beginning on or after 1 January 2019 and removes the operation and finance lease classification in IAS 17 Leases and replaces them with the concept of right of use assets and associated financial liabilities.

Going Concern

The Group's forecasts, which have been prepared for the period to 31 December 2021 after taking into account the contracted order book, future sales performance, expected overheads, capital expenditure and debt service costs, show that the Group should be able to operate profitably and within the current financial resources available to the Group.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group financial statements.

The preparation of financial statements, in conformity with Generally Accepted Accounting Principles under IFRSs, requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates.

 

2. Segmental information

 

Revenue and segmental reporting

The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group's Executive Directors. Operating segments for the period to 30 June 2019 were determined on the basis of the reporting presented at regular Board meetings of the Group which is by nature of customer and level of procurement advice provided. The segments comprise:

The Corporate Division ("Corporate")

 

This sector comprises the operations of Inspired Energy Solutions Limited, Direct Energy Purchasing Limited, Wholesale Power UK Limited, STC Energy and Carbon Holdings Limited, Informed Business Solutions Limited, Flexible Energy Management Limited, Churchcom Limited, Horizon Energy Group Limited, Energy Cost Management Limited, SystemsLink 2000 Limited, Professional Cost Management Group Limited, Squareone Enterprises Limited and Inprova Finance Limited. Corporate's core services are primarily in the review, analysis and negotiation of gas and electricity contracts on behalf of Corporate clients. Additional services provided include energy review and benchmarking, negotiation and bill validation. The Group's Corporate Division benefits from a market-leading trading team, who actively focus on high volume customers, providing more complex, long-term energy frameworks based on agreed risk management strategies.

The SME division ("SME")

 

This sector comprises the operations of Energisave Online Limited, KWH Consulting Limited and Simply Business Energy Limited. Within the SME Division, the Group's energy consultants contact prospective SME clients to offer reduced tariffs and contracts based on the unique situation of the customer. Leads are generated and managed by the Group's internally generated, bespoke CRM and case management IT system. Tariffs are offered from a range of suppliers and the Group is actively working with new suppliers to increase the range of products available to SME clients.

PLC costs

 

This comprises the costs of running the PLC, incorporating the cost of the Board, listing costs and other professional service costs such as audit, tax, legal and Group insurance.

 

 

 

Six months ended 30 June 2019

 

Six months ended 30 June 2018

 

 

 

Corporate

£

 

SME

£

PLC costs

£

 

Total

£

Corporate

£

 

SME

£

PLC costs

£

 

Total

£

 

 

Revenue

18,676

 

2,883

-

 

21,559

13,760

 

2,481

-

 

16,241

 

 

Cost of sales

(1,319)

 

(1,679)

-

 

(2,998)

(1,082)

 

(1,418)

-

 

(2,500)

 

 

Gross profit

17,357

 

1,204

-

 

18,561

12,678

 

1,063

-

 

13,741

 

 

Administration expenses

(10,339)

 

(353)

(3,987)

 

(14,679)

(7,355)

 

(348)

(3,310)

 

(11,013)

 

 

Operating profit

7,018

 

851

(3,987)

 

3,882

5,323

 

715

(3,310)

 

2,728

 

 

Analysed as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

8,966

 

970

(1,150)

 

8,786

6,432

 

944

(848)

 

6,528

 

 

Depreciation

(555)

 

(41)

(2)

 

(598)

(247)

 

(22)

-

 

(269)

 

 

Amortisation

(477)

 

(68)

(2,304)

 

(2,849)

(281)

 

(87)

(1,802)

 

(2,170)

 

 

Share-based payments

-

 

-

(236)

 

(236)

(139)

 

(7)

(150)

 

(296)

 

 

Exceptional costs

(916)

 

(10)

(295)

 

(1,221)

(442)

 

(113)

(510)

 

(1,065)

 

 

 

7,018

 

851

(3,987)

 

3,882

5,323

 

715

(3,310)

 

2,728

 

                                 

 

3.     Earnings Per Share

The earnings per share is based on the net profit for the period attributable to ordinary equity holders divided by the weighted average number of ordinary shares outstanding during the period.

 

Six months ended 30 June 2019 (unaudited)

£

 

Six months ended 30 June 2018 (unaudited)

£

 

Year ended 31 December 2018

(audited)

£

 

 

 

 

 

 

 

 

Profit attributable to equity holders of the Group

2,553

 

1,629

 

3,239

 

Amortisation of acquired intangible assets

2,304

 

1,801

 

3,749

 

Deferred tax in respect of amortisation

(252)

 

(198)

 

(536)

 

Changes in fair value of contingent consideration

51

 

185

 

(576)

 

Foreign exchange variation

(51)

 

96

 

254

 

Fees associated with acquisition

269

 

312

 

2,345

 

Share-based payments costs

236

 

296

 

            471

 

Restructuring costs

901

 

568

 

935

 

 

 

 

 

 

 

 

Adjusted profit attributable to equity holders of the Group

6,011

 

4,689

 

9,881

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares in issue

713,973

 

576,500

 

587,602

 

Diluted weighted average number of ordinary shares in issue

 

755,302

 

 

604,123

 

 

27,679

 

 

 

 

 

 

 

 

Basic earnings per share (pence)

0.36

 

0.28

 

0.55

 

Diluted earnings per share (pence)

0.34

 

0.27

 

0.53

 

Adjusted basic earnings per share (pence)

0.84

 

0.81

 

1.68

 

Adjusted diluted earnings per share (pence)

0.80

 

0.78

 

1.61

 

 

The weighted average number of shares in issue for the adjusted diluted earnings per share include the dilutive effect of the share options in issue to senior staff of Inspired.

Adjusted earnings per share represents the earnings per share, as adjusted to remove the effect of the fees associated with acquisition, amortisation of intangible assets (excluding amortisation related to computer software and customer databases), share-based payments and exceptional items which have been expensed to the income statement in the period. Adjusted profit before tax is calculated as follows:

 

Six months ended 30 June 2019 (unaudited)

£

 

Six months ended 30 June 2018 (unaudited)

£

 

Year ended 31 December 2018

(audited)

£

 

 

 

 

 

 

 

 

Profit before tax

3,232

 

2,089

 

4,199

 

Share-based payments costs

236

 

296

 

             471

 

Amortisation of acquired intangible assets

2,304

 

1,801

 

3,749

 

Foreign exchange variation

(51)

 

96

 

254

 

Exceptional costs/(items):

 

 

 

 

 

 

 Fees associated with acquisition

269

 

312

 

2,345

 

 Restructuring costs

901

 

568

 

935

 

 Change in fair value of contingent consideration

51

 

185

 

(576)

 

 

 

 

 

 

 

 

Adjusted profit before tax

6,942

 

5,347

 

11,377

 

 

 

 

 

 

 

 

4.     Property, Plant and Equipment

 

 

 

 

 

 

 

 

 

 

Right of Use Assets

 

Total

£

 

Fixtures and fittings

£

 

Motor

vehicles

£

 

Computer equipment

£

 

Leasehold improvements

£

 

 

Motor

vehicles

£

 

 

Leasehold improvements

£

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 1 January 2018

743

 

69

 

1,472

 

441

 

-

 

-

 

2,725

Acquisitions through business combinations

156

 

15

 

228

 

12

 

-

 

-

 

411

Additions

62

 

88

 

460

 

258

 

-

 

-

 

868

Disposals

-

 

(40)

 

1

 

-

 

-

 

-

 

(39)

Foreign exchange variations

-

 

1

 

1

 

-

 

-

 

-

 

2

At 31 December 2018

961

 

133

 

2,162

 

711

 

-

 

-

 

3,967

Additions

94

 

-

 

551

 

279

 

-

 

-

 

924

On application of IFRS 16

-

 

-

 

-

 

-

 

170

 

3,116

 

3,286

Foreign exchange variations

-

 

(1)

 

-

 

-

 

-

 

-

 

(1)

At 30 June 2019

1,055

 

132

 

2,713

 

990

 

170

 

3,116

 

8,176

Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 1 January 2018

373

 

2

 

841

 

102

 

-

 

-

 

1,318

Charge for the year

121

 

26

 

370

 

52

 

-

 

-

 

569

Disposals

-

 

(3)

 

-

 

-

 

-

 

-

 

(3)

At 31 December 2018

494

 

25

 

1,211

 

154

 

-

 

-

 

1,884

Charge for the period

98

 

12

 

158

 

49

 

56

 

225

 

598

At 30 June 2019

592

 

37

 

1,369

 

203

 

56

 

225

 

2,482

Net Book Value

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 June 2019

463

 

95

 

1,344

 

787

 

114

 

2,891

 

5,694

At 31 December 2018

467

 

108

 

951

 

557

 

-

 

-

 

2,083

 

Property, plant and equipment includes right of use assets following the adoption of IFRS 16, which is effective from periods beginning on or after 1 January 2019. The adoption has resulted in the recognition of right of use assets (along with associated lease liabilities) of £3,286,000 with depreciation of £281,000 recognised in the period.

 

5.     Intangible assets and goodwill

 

Computer software

£

 

Trade name        £

 

Customer databases

£

 

Customer contracts

£

 

Customer relationships £

 

Goodwill

£

 

Total

£

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2018

5,805

 

115

 

1,498

 

10,751

 

1,989

 

22,190

 

42,348

Additions

1,411

 

-

 

98

 

-

 

-

 

-

 

1,509

Foreign exchange variances

-

 

-

 

-

 

88

 

-

 

36

 

124

Acquisitions through business combinations

2,134

 

-

 

-

 

3,848

 

242

 

22,643

 

28,867

At 31 December 2018 (restated)

9,350

 

115

 

1,596

 

14,687

 

2,231

 

44,869

 

72,848

Additions

1,019

 

-

 

38

 

-

 

-

 

-

 

1,057

Foreign exchange variances

-

 

-

 

-

 

(35)

 

-

 

14

 

(21)

At 30 June 2019

10,369

 

115

 

1,634

 

14,652

 

2,231

 

44,883

 

73,884

Amortisation

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 1 January 2018

2,273

 

12

 

1,317

 

3,841

 

1,053

 

-

 

8,496

Charge for the period

1,589

 

6

 

120

 

2,246

 

544

 

-

 

4,505

At 31 December 2018

3,862

 

18

 

1,437

 

6,087

 

1,597

 

-

 

13,001

Charge for the year

996

 

3

 

68

 

1,503

 

279

 

-

 

2,849

At 30 June 2019

4,858

 

21

 

1,505

 

7,590

 

1,876

 

-

 

15,850

Net Book Value

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 June 2019

5,511

 

94

 

129

 

7,062

 

355

 

44,883

 

58,034

At 31 December 2018 (restated)

5,488

 

97

 

159

 

8,600

 

634

 

44,869

 

59,847

 

Computer software is a combination of assets internally generated and assets acquired through business combinations. Amortisation charged in the period to 30 June 2019 associated with computer software acquired through business combinations is £477,000. The additional £519,000 charged in the period relates to the amortisation of internally generated computer software. Amortisation of customer databases of £68,000 is also in relation to internally generated intangible assets.

 

6.     Availability of this announcement

This announcement together with the financial statements herein and a presentation in respect of the interim financial results are available on the Group's website, www.inspiredplc.co.uk

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR KXLFBKKFEBBQ
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Half-year Report - RNS