Trading and COVID-19 update

RNS Number : 8122I

eEnergy Group PLC

06 April 2020

 

6 April 2020

eEnergy Group plc

("eEnergy" or "the Group")

Trading and COVID-19 update

eEnergy Group plc (AIM: EAAS), the leading "Energy Efficiency-as-a-Service" (EEaaS) business in the UK and Ireland, today issues its third-quarter trading update for the period from 1 January 2020 to 31 March 2020 and provides an update on the impact of COVID-19 on the Group.

Trading update

The Group, through its eLight subsidiary, provides "Light-as-a-Service" (LaaS) to businesses and schools to help them switch to LED lighting for a fixed monthly service fee, avoiding any upfront payments. 

From 1 January 2020 to 3 April 2020, eEnergy signed 48 new contracts which include 21 schools in the UK and Ireland. Combined, eEnergy expects to save these 21 schools over £360,000 in energy costs and 618 tonnes in carbon emissions each year. These new contracts include some of the UK's leading independent schools such as Marlborough College in Wiltshire and Wycliffe College in Gloucestershire. Other notable contracts in the UK are the Group's first project with a Multi-Academy Trust and with some state primary schools.

The high number of contracts reflects the success of the Group's sales operation, which has generated €12.5m of new proposals in the same period. The Company is currently seeing a strong sales cycle in the education sector, with 40% of proposals to UK schools being converted to signed contracts. The time taken to convert each proposal into a signed contract has been reduced by 25% to 35 days. eEnergy is actively engaged with over 150 school proposals. 

Despite the spread of COVID-19, no signed projects have been cancelled, although some school installations have been delayed to the summer holidays.

COVID-19 update

The health and safety of eEnergy's employees and customers are of paramount importance. All 32 employees are working remotely, and the Group's installation partners are observing all social distancing precautions when it is appropriate to work.

While the tragic impact of the Coronavirus in the UK and Ireland cannot be underestimated, the Group's experience is that organisations are already planning for life after COVID-19. The decision by the UK and Irish Governments to close schools for the foreseeable future has led to a spike in interest in eLight's LaaS proposition.  Many schools are looking to complete maintenance and upgrade projects, including switching to LED lighting, in what may be an extended period with either no or reduced numbers of pupils on site.

To help support businesses and schools, eEnergy is offering new LaaS clients a three-month payment rebate as an incentive to accelerate their transition to LED lighting. This incentive is being combined with a deep hygiene clean to reduce the risk of future COVID-19 infections.

 The Board believes that the education sector represents a huge opportunity for eEnergy.  As it stands, around 80% of schools have not transitioned to energy-efficient lighting.  In Ireland, the sales strategy is being rebalanced away from the Commercial SME sector, which has been hit hardest by COVID-19, towards public sector schools in Ireland and Northern Ireland. The Board expects these will reopen for the Group to work with, before the Commercial SME sector.

Outlook

In each month in the quarter, the Group secured contracts worth approximately €1 million, which is 2.5 times that for the same period of the prior year and is in line with market expectations.

Based on the estimated pipeline, the Board anticipates maintaining the average level of contract order intake through to the end of the calendar year, despite the impact of COVID-19.

However, the impact of some installations being delayed until the Summer means that revenues will be generated later than expected. This will push back the Group's operating profit breakeven point to the second half of 2020. This shift will have a negative impact on revenues and earnings for the financial year ending 30 June 2020. 

The Group has a strong balance sheet with cash of €1.4m as at 31 March 2020.

Harvey Sinclair, CEO, eEnergy Group plc, said:  "eEnergy has had a successful start to life on AIM. We are pleased with the momentum we have achieved driven by a large number of contract wins. Like all businesses, we are working hard to meet the challenge presented by COVID-19.  I am delighted with how our employees have adapted to what are difficult circumstances.

"With cashflow expected to become an even greater concern for organisations, there is a clear opportunity for us as we help schools and businesses reduce energy spend and free up cash. One potential outcome of the current situation may be the acceleration of the switch to LED lighting and other energy-efficient technologies. eEnergy is well placed to meet this demand."

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This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Contacts:

eEnergy Group plc	Tel: [phone]
Harvey Sinclair, Chief Executive Officer	[e-mail]; www.eenergyplc.com
Cairn Financial Advisers (Nominated Adviser)	Tel: [phone]
Sandy Jamieson / James Caithie
Turner Pope Investments (Broker)	Tel: [phone]
Andy Thacker / Zoe Alexander	[e-mail]
Newgate Communications	Tel: [phone]
Giles Croot / Robin Tozer	[e-mail]

About eEnergy Group plc

eEnergy is an established "Energy Efficiency-as-a-Service" (EEaaS) business currently focused on providing "Light-as-a-Service" to commercial customers through eLight. eLight helps businesses and schools switch to LED lighting for a fixed monthly service fee, avoiding any upfront payments. For customers, the energy savings are greater than the monthly service fee, allowing them to unlock free cash-flow from day one as well as to improve the quality of their lighting and reduce carbon emissions.  eLight procures, funds, installs and maintains the LED lighting, meaning the customer has no risk.

eEnergy was admitted to AIM in January 2020. The Board's strategy is to develop eEnergy as a broader energy services company and acquire other businesses in the energy management sector. The market in the EU for energy efficiency services was approximately €25 billion in 2017 and is expected to double by 2025. 

eEnergy has been awarded The Green Economy Mark by the London Stock Exchange, which recognises a company's work on sustainability. 

https://eenergyplc.com/  

 

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