Acquisition of Wessex EcoEnergy Limited

Good Energy Group PLC

22 June 2023

 

          22 June 2023

Good Energy Group PLC

("Good Energy" or "the Company")

Acquisition of Wessex EcoEnergy Limited

Good Energy Group PLC (AIM: GOOD), the 100% renewable electricity and energy services provider, is pleased to announce that it has acquired the entire issued share capital of Wessex EcoEnergy Limited ("Wessex"), an established UK based solar installation business (the "Acquisition"), on a debt free, cash free basis for an initial consideration of £2.5 million.

Building on its acquisition of Igloo Works in December 2022, the Acquisition represents a further milestone in delivering on Good Energy's strategy to expand its capability in decentralised energy services, complementing its established energy supply business and heat pump installation capability. It also supports Good Energy's ambition to help one million customers cut carbon by 2025.

Strategic highlights

·      Continued progress against Good Energy's ambition to be the UK's leading provider of green energy services, with the ability to install green energy infrastructure and provide the best tariffs for the energy produced by its customers.

·      Having established itself as a solar installer since acquiring Igloo Works, this transaction takes Good Energy's solar installation capabilities to the next level. The Company is positioned to offer premium solar installs, benefiting from the ongoing rapid growth in demand for solar power. The UK solar market has seen near record levels of growth through 2022 as energy prices remained high.

·      Installs increased over 125% to 132,000 and this trend has continued in 2023.

·      Domestic installs accounted for 88% of the volumes in 2022, as people looked to shield themselves from elevated energy costs.

·      We anticipate this market is to grow by 9.9% CAGR to 2030.

·      Wessex will report under Good Energy services division and continue to operate under its own brand. Wessex will benefit from now being able to offer a full energy service package including solar, storage, heat and export tariffs for its customers. Services will be marketed to both Good Energy's existing 270,000 customers and new prospects focused in the South West of England.

·      Wessex is a registered MCS, RECC and Tesla Energy Certified solar installer and service provider, based in Dorchester, for domestic and commercial customers with an established team of engineers, technicians, and operations specialists. It has a strong brand predominantly covering the South West of England and a proven track record of high-quality installs with a 5* Google review rating. It completed 155 installs in 2022 and following the acquisition will be targeting 600 panel installations per month within 18 months.

·      The Acquisition builds on Good Energy's existing energy service offering across other product areas including heat, storage and electric vehicles. Good Energy will seek to accelerate growth in these areas through further bolt-on acquisitions.

Transaction highlights

·      Good Energy has acquired 100% of Wessex's issued share capital for an initial consideration of £2.5 million, payable in cash on completion (the "Initial Consideration"). Deferred consideration of up to £1.5m is payable in cash by Good Energy dependent on the achievement of certain financial and non-financial milestones, over an 18-month transition period to 31 December 2024. These are split broadly equally across service quality, management transition, increased installation capacity and earnings run rate. 

·      Day 1 Initial Consideration price at a less than six times EBITDA multiple based on forecast 2023 earnings. Revenue for the year to 31 October 2023 remains on track to exceed £4m.

·      For the financial year ended 31 October 2022, Wessex reported sales of £2.2 million and a net profit of £0.3m. Gross assets as at 31 October 2022 were £0.8m.

·      The new business plan will see the balance of 2023 and the first half of 2024 as a period of investment as we look to double the installation capacity of Wessex. Elevated installation capacity is expected to drive material earnings accretion from 2025, leveraging corporate overheads to deliver effective customer acquisition and cost to serve.

·      Working capital will be required over the coming 12 months to accelerate investment in people and marketing to allow the business to scale. Good Energy expects to invest £0.5m in working capital to reach this point.

·      The Initial Consideration, rest of the working capital and any future pay-outs will be funded through the Company's existing cash resources.

·      The Acquisition is expected to be marginally EPS accretive in the first full year of ownership and materially accretive in the year ending 31 December 2025.

·      Wessex EcoEnergy was founded in 2014 by Daniel Cole and Martin Hawkins, who are the majority shareholders. Both will remain with the business on completion. Daniel has over 24 years' experience in sales and senior management roles in telecoms, internet, SAAS and solar energy sectors. Martin is a Chartered Engineer specialising in Naval Architecture and an experienced Project Manager, Martin has a proven track record of delivering multi-million pound engineering projects. Martin has a passion and skill for property renovation as well as cutting-edge ecological technology.

Nigel Pocklington, Chief Executive Officer of Good Energy, said:

"Good Energy is fast becoming the UK's go-to all-in-one solar service company. We have the second largest solar generating customer base, paid out a record amount for solar power last year and have launched market leading smart export tariffs. Bringing Wessex into the business accelerates our solar and storage installations business, as the solar surge which saw installs grow 125% in 2022 continues.

"Not only does Wessex ECOEnergy's purpose align with Good Energy's, its premium, trusted positioning in the South West aligns with Good Energy too.

"There is a £5 to £10 billion growth opportunity in clean energy technology installations among climate conscious consumers. With our trusted legacy and green-motivated existing customer base we are positioned to be a major player in this, and are already kitting out homes with heat pumps, solar and batteries. Now we're supercharging our solar services."

Enquiries

Good Energy Group PLC Nigel Pocklington, Chief Executive Charlie Parry, Director of Corporate Strategy & Investor Relations Ian McKee, Head of Communications	Email: [e-mail]
SEC Newgate UK	Email: [e-mail]
Elisabeth Cowell / Molly Gretton	Tel: [phone]
Investec Bank plc (Nominated Adviser and Joint Broker)
Henry Reast / James Rudd	Tel: [phone]
Canaccord Genuity Limited (Joint Broker) Henry Fitzgerald - O'Connor / Harry Rees	Tel: [phone]

About Good Energy www.goodenergy.co.uk

Good Energy is a supplier of 100% renewable power and an innovator in energy services. It has long term power purchase agreements with a community of 1,700 independent UK generators.

Since it was founded 20 years ago, the Company has been at the forefront of the charge towards a cleaner, distributed energy system. Its mission is to power a cleaner, greener world and make it simple to generate, share, store, use and travel by clean power.  Its ambition is to support one million homes and businesses to cut carbon from their energy and transport used by 2025.

Good Energy is recognised as a leader in this market, through green kite accreditation with the London Stock Exchange, Which? Eco Provider status and Gold Standard Uswitch Green Tariff Accreditation for all tariffs.

 

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