Turnover growth fails to blow green energy firm into profit
By Andrew Merrell | 25th February 2020
An increasing number of business customers boarding Ecotricity to sign up to its promise of greener power has led to a "significant year of growth in turnover".
In the choppy waters of the energy market, made challenging by ever present competition, the Stroud-based firm continues to chart its own course.
Gross profit for the group has also grown, less dramatically than it would have hoped.
"The turnover of the group has shown significant improvements year on year, much more than the small increase in customer numbers and the external factors impacting wind power generation would suggest as described above, rising to £201,424,000 (£175,739,000).
"The increase is mainly due to strong trading performance in the electricity and supply business and a continued change in customer mix to higher usage business customers
"Despite strong volume growth in the year, gross profit has grown at a slower rate to £55,782,000 (£55,018,000) due to the rising industry costs and the change in customer mix to include more lower margin business customers, which has led to a drop in gross margin from 31.3 to 27.7 per cent.
"Total pre-tax loss was £4,812,000 (2018: £3,924,000 loss). 2018 pre-tax loss was negatively impacted by the adverse movement in the share price of the group's listed investment being £5,034,000.
"Without this the underlying group made a £740,000 profit before tax. This movement of £5,552,000 to a pre-tax loss in 2019 has been principally driven by the increase in administration costs of £4,793,000. This increase in administration costs was driven by an increase in bad debt write-offs.
"The financial position of the group remains strong with net assets at £54,447,000 (2018: £58,911,000) and cash equivalents of £8,494,000 (2018: £11,004,000)."
For its supply business, the Renewable Energy Company limited, "2019 has been a year of significant growth in the turnover. During 2019, turnover in the REC grew by 16.9 per cent to £193,340,000 (2018: £165,319,000).
"In aggregate, business and domestic customer numbers were up year-on-year by 1.4 per cent (2018 - minus three per cent down)."
The firm leads its annual accounts for the year ending April 30 2019 by swearing allegiance to its battle plan - "to promote sustainability in all walks of life, but principally in the sectors of energy, transport and food in pursuit of its vision of a Green Britain".
Its main focus is "the supply of green energy - electricity and gas to homes and businesses" and "the generation of power through the group's wind and solar park portfolio".
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