Preliminary Results

RNS Number : 8614B

Good Energy Group PLC

09 April 2013

 



9 April 2013

 

Good Energy Group plc ("Good Energy" or the "Company")

Preliminary Results

Good Energy Group plc ("Good Energy" or the "Company"), owner of Good Energy Limited, a leading UK 100% renewable electricity supplier, is pleased to announce its audited preliminary results for the year ended 31 December 2012.

Financial Highlights  

•     Revenue increased by 31% to £28.2m (2011: £21.6m)

•     Gross Profit increased by 10% to £9.6m (2011: £8.7m)

•     Profit Before Tax increased by 27% to £1.4m (2011: £1.1m)

•     Cash balance as at 31 December £9.5m (2011: £2.4m)

•     Basic earnings per share increased by 6% to 13.2p (2011: 12.4p)

•     Final dividend of 2p per share recommended, which would make a total dividend for the year of 3p per share (2011: 2.75p) an increase of 9%

Business Highlights

•     Electricity customers increased by 13% to over 32,000 (2011: 28,346)

•     Gas customers increased by 58% to over 8,500 (2011: 5,492)

•     FIT customers increased to over 46,000 (2011: 12,195)

•     Admission to AIM in July 2012, raising £4 million before expenses, introducing institutional investors to Good Energy

•     Development pipeline includes around 35MW of onshore wind and up to 200MW of solar

Juliet Davenport OBE, Chief Executive said:

"Good Energy has performed in line with expectations and we are successfully delivering on our plans. This year we achieved significant growth across all customer sites, improved our trading margins and our competitive positioning. This is the same year that we topped the Which? Customer satisfaction survey for electricity suppliers again, making it three out of the last four years.  All of these elements underpin our overall commitment to the continued development of a profitable renewable energy company, and a cleaner, green and more secure energy future for the UK."

John Maltby, Chairman said: "2012 was another encouraging and successful year for Good Energy. We have invested in building a solid foundation for the business and we look forward to continued progress in 2013. Good Energy is well placed to rise to the challenges and take advantage of the opportunities in the year ahead."

For further information, please contact:  

Good Energy Group plc    Juliet Davenport, Chief Executive	01249 766795
N+1 Singer (Nominated Adviser & Broker)  Andrew Craig, Ben Wright	020 7496 3000
Kreab Gavin Anderson (Financial PR)                             Chris Phillipsborn, Anna Schoeffler	020 7074 1800

Chairman's Statement

For the year ended 31 December 2012

I am delighted to have joined Good Energy at this exciting time in its development and look forward to helping the Company to continue to fulfil its potential. I am pleased to report that 2012 was another encouraging and successful year for Good Energy. Our business performance was in line with expectations and the Company delivered growth across the whole business generating strong profit growth. Our cash flow remains healthy and as a result of the strong performance and prospects the Board have recommended for approval, by shareholders at the AGM, a final dividend for the year ended 31st December 2012 of 2p per share, giving a full year dividend of 3p  (up 9% on 2011).

Renewable energy remains central to the Government's plans for the UK energy market, with wind energy alone now regularly providing over 5 per cent of UK electricity demand.  Whilst media and political commentary has increased, fundamental opportunities remain. Key policy decisions on financial support levels for renewable energy both now and in the future remain broadly favourable, and the UK Government retains a strong track record on maintaining support levels for existing sites.  A decarbonisation target for the power sector has widespread industry and business support, and its adoption would be a welcome addition to Government policy. At a time when ongoing concern about rising fossil fuel prices and the security of energy supply reflect the need for the UK to develop greater energy independence, it has never been more relevant to demonstrate how to achieve a more secure and sustainable energy future than it is today.

Customer confidence and trust in the large established energy providers continues to deteriorate.  This provides an opportunity for customer centric, values-based challenger companies to gain market share and increase profile. Good Energy is leading the way in this, through its strong values and ethics, and by its proven service proposition. We have topped the Which? customer satisfaction survey for electricity suppliers for three out of the last four years (2010, 2012 & 2013), and were the only supplier to be awarded the top five star rating for the energy efficiency advice we provide to our customers.

During the course of the year we saw a strengthening of the business foundation of the Company. Good Energy has invested in building the Company's infrastructure, capability and balance sheet to be the foundation for future profitable growth. Our AIM listing in July 2012 raised £4m and has provided improved liquidity for our shareholders, opened the Company to a larger investor market and helped provide additional working capital for the Group. 

The Group recognises the importance of good corporate governance in line with our listing on AIM, and we are adopting best practice where appropriate. We have established governance as a platform for a bigger business through adding two further committees which overview the business of Good Energy; the Audit Committee and the Remuneration Committee.

We have also invested in the Board, adding a wealth of experience that will be valuable for the development of the Company. I would like to thank Rick Squires for his service as Chairman and am delighted that he continues to be a member of the Board as a Non-Executive Director.  I am pleased to welcome Francesca Ecsery who was appointed Non-Executive Director in November.  Francesca brings extensive expertise in marketing and over 22 years of experience in senior director roles.

On behalf of the Board I would like to acknowledge the contribution of Juliet Davenport and her team, as well as all our Good Energy customers, generators and shareholders. We thank you for your ongoing support and assure you that your award-winning Company will continue to be a catalyst for change in the UK energy market by empowering individuals and businesses to switch their energy supply to renewable electricity and also to generate their own renewable power.

Looking ahead, Good Energy has a number of key strengths which will allow us to perform well and capitalise on the challenges that 2013 will bring. There are opportunities for further investment in generation and increasing customer numbers, building on the momentum achieved this year. Investment in core infrastructure capability and enhancing the team will further strengthen the Company and provide a solid platform for further progress and innovation. Good Energy is well placed to continue to grow profitably and deliver increasing amounts of renewable energy to the UK energy market.

Chief Executive's Operating and Financial Review (extracts)

For the year ended 31 December 2012

Strategic purpose

Good Energy has continued to perform well across all its businesses areas.  As set out in our 2012 strategy, we maintained and built on the growth established at the end of 2011. As a result of trading enhancements we were able to deliver improvements to our competitive positioning for both electricity and dual fuel.

We saw strong growth in the FIT administration business, which increased to over 46,000 FIT customers by 31 December 2012, becoming the 2nd largest FIT administrator in the UK. This played well with Good Energy's overall strategy of having a diverse source of power from many small renewable generators.

The admission to AIM in July 2012 and successful fund raise of £4 million before expenses, introduced new institutional investors to the business, providing capital to accelerate the growth of the business and to ensure the potential for future capital raises as the business requires support for its development.

We have made good progress on our target to develop 110MW of renewable generation capacity. There is growing momentum behind Good Energy's wind and solar portfolio, and we have built a team with the expertise and knowledge to enable us to deliver 50% of electrons from our own sites by 2016. Our development pipeline currently includes around 35MW of onshore wind and up to 200MW of solar. 

Electricity and Gas Market Positioning

Good Energy's core retail proposition continues to be 100% renewably sourced electricity to business and domestic customers, where the Company guarantees to match the electricity we supply to our customers with power generated from renewable sources over the course of a year. Good Energy continues to be the only Company in the UK who commits to this proposition in the long term.

The total number of customers using Good Energy's services has continued to grow and our electricity and gas supply customers are attracted by our competitive prices, strong customer service ethos and our commitment to renewable energy. Electricity customer numbers have increased by 13% to over 32,000 and gas has also had a strong year, growing 58% to end 2012 with over 8,500 customers.

The growth in MWh is higher than the growth in customers, at around 20%, partially due to an increase in sales to businesses, and partially due to an increase in sales due to the weather. 

Good Energy continues to offer market leading customer service, and came top of the recent Which? customer satisfaction survey.  This is despite the delays in the implementation of our new in-house customer service system, which we expect to become operational in 2013.  The delays have meant that we haven't seen the improvements in cost to serve as we would have liked in 2012, but we commend our operations team for maintaining the high customer service ranking and grade of service throughout the year. 

In order to improve the market awareness of the Good Energy brand and encourage new customers to sign up to Good Energy, we have forged new partnerships in 2012 with other like-minded organisations, including the National Trust and The Soil Association.  This is part of a wider strategy on growth that will see the Company invest further in business sales growth, online developments, and new tariffs to support the use of electricity in both the heat and the transport markets.

Trading Systems

A key part of our financial and competitive performance is based on our trading capabilities.  Over the past three years the Company has invested in more sophisticated trading strategies and improvements in forecasting of wind, hydro and most recently solar power.  This has seen a year on year improvement in trading performance throughout 2010-2012.  In 2012 we recognised that the contract with our trading aggregator had reached a point at which further improvements in our trading activity would require direct access to the market.  Throughout 2012 we have been establishing the systems and contractual arrangements to provide the Company with a more responsive trading platform, which affords us a greater flexibility that compliments the dynamic nature of the renewables market. These changes were implemented on 1 March 2013 as planned and we are now trading our own position. We expect this to deliver value in the latter half of 2013 due to the improved granularity and flexibility in trading systems.

Feed-in Tariff administration

Good Energy has maintained its position as one of the largest FIT administrators in the UK, with 14% of the market share in 2012 over the year. Growth was driven by strong demand for FIT administration services for individuals and investment portfolios, as well as the various government deadlines taking place throughout the year. 

FIT administration continues to be an integral part of our electricity supply business, with a total of 46,000 generators being administered at the end of December 2012. We do not expect to see the same level of growth in 2013 due to changes in the schemes. In addition, we have seen substantive reductions in the FIT administration payment by OFGEM since 2010. We plan to address these challenges by improving our customer service, and exploring other opportunities to leverage the existing knowledge and systems.

Generation

Our plans to target a portfolio of 110MW of wind, solar and possibly small hydro generation assets by 2016 are progressing well. This target supports the aspiration to deliver 50% of electricity from our own generation assets. Delabole, our existing 9.2 MW wind farm in north Cornwall, performed well in 2012 and generated just over 24,000 MWh of electricity, amounting to around 16% of our renewable electricity requirement for our supply base.

During 2012 we worked on various opportunities to purchase wind sites with planning permission, allowing us to maintain momentum behind the development portfolio.  In January 2013, we agreed the purchase of a 8.2 MW site with planning in Yorkshire, and we expect development of this site to start in 2013. This will produce around 20,000 MWh of electricity per annum, almost doubling the amount of power that we will be able to purchase from our own sites.

We have successfully launched the Delabole Local Tariff as part of our commitment to the local community. The tariff has been well received and we propose to commit to a similar tariff at all our wind sites which are over 4 MW.

Our development portfolio has made significant advances, we have two small sites in planning, although we are seeing some delays with planning applications in Scotland. We have pre-planning consultations started on a further 32MW of wind and up to 200MW of solar.  As with any portfolio, we don't expect to progress with all of these sites, and during the next stage we expect these to reduce, as we decide which sites to submit to planning in Q2 and Q3 2013. We have a dedicated team of 12 working across project planning, construction delivery & stakeholder engagement.

Financial Review

Highlights of the Financial Information of Good Energy Group PLC for the year ended 31 December 2012 is set out below, together with explanatory notes and comparisons with previous years where appropriate.

Revenue and Gross Profit

Revenue for the year, at £28.2m, was 31% higher than 2011 (£21.6m).  Of this £6.6m increase, revenue from electricity supply and FIT administration combined was up £4.9m on 2011 and revenue from gas has increased £1.6m on 2011.

Gross profit increased by 10% on 2011 which is lower than the growth in revenues in the year.  The gross margin reduced by 6 percentage points due to the strategic decision to delay the electricity retail price increase as long as possible and also to reduce our gas pricing for dual-fuel customers in order to improve our competitive position in the marketplace. In addition the reduced outturn price of Renewable Obligation Certificates (ROC's) compared to 2011 put upward pressure on our power purchase costs.

Administrative Expenses

At £7.5m, administrative costs across the group have increased from 2011's £6.9m by 9%.  Additional resources were required in 2012 in order to register FIT customers before government deadlines, to work on our new CRM systems and to help identify and scope out new sites for potential generation assets. These increased costs were partially offset by the fact that the amortisation of the new CRM systems will commence once it goes live and is fully operational in 2013 and also that all the costs of the previous operating system were fully written off in 2011.

Profit before tax

Profit before tax of £1.4m, has increased by 27% on 2011.  This represents 4.9% of consolidated revenue (2011: 4.9%). 

Financial Position and Financing

The Consolidated Statement of Financial Position is set out below.  This shows a Shareholders' Equity of £11,052,244 (2011: £6,703,593).  This is equivalent to 88.3p per ordinary share (2011: 85.8p).

This statement is drawn up on an historic cost basis and therefore excludes the inherent value of certain intangible assets.

In July 2012, the Group was admitted to the AIM market of the London Stock Exchange and raised £4m before expenses by way of placing 4.7m ordinary shares. We very much welcome the addition of a number of major institutional shareholders giving a more balanced shareholder base.

These funds are included in the cash balance of £9.5m (2011: £2.4m), with the additional £3.1m increase in the Group's aggregate cash balance arising mainly from an improvement in cash from operating activities, up £2.3m on 2011.

The Group has an outstanding long-term loan for financing the wind farm at Delabole, with a balance of £8.9m at the end of 2012 (2011: £9.3m).  The majority of debt interest payable in 2012 is attributable to this loan. 

Dividend

Following on from our interim dividend payment in 2012 of 1.00p per share, and as part of our ongoing policy to recognise the success of the business and the support of our shareholders, the Directors are pleased to recommend for declaration by the Company at the Annual General Meeting a final dividend of 2.00p per share to give a full dividend payment for 2012 of 3.00p per share (2011: 2.75p).

Board

The Board of Directors saw several changes in 2012. John Maltby was appointed Non-Executive Chairman on 15 October 2012, taking over from Rick Squires, who had been acting as Chairman for an interim period. John Maltby joins the Company with a wealth of experience from the financial services sector, having held senior executive roles with Lloyds Banking Group, Natwest Group PLC, Barclays and Abbey National.  Rick Squires retains his position on the Board as a Non-Executive Director.

The Board was further strengthened with the appointment of Francesca Ecsery as Non-Executive Director on 15 November 2012.  Francesca's extensive experience in creating and delivering innovative marketing initiatives across a broad range of consumer-facing companies will be invaluable in helping the Company to grow its customer base.

Market and political framework

Good Energy operates in the UK electricity and gas market which are highly regulated, and changes in policy can impact the development of the renewable energy market.  As a result we have an internal team that specifically monitor the impact of policies both on the Good Energy business, and the wider renewable and decentralised energy marketplaces.  Where possible Good Energy tries to use its knowledge to influence how policy is developed to ensure a well formed marketplace for the future.

Current proposals under the Electricity Market Reform (EMR) will have an impact on the renewable energy marketplace, and potentially favour those businesses with some form of vertical integration.

As a well-established renewable electricity supplier, we are confident that we are well placed to manage the transition to the new market regime.

However we have a number of concerns related to the impact of EMR on small and medium sized renewable generators. We believe that for these generators the FIT CFD should be replaced by a simple FIT. Good Energy is active in various groups to try and ensure that the reforms are fit for purpose for the smaller generators (sub 20MW) and those opportunities to provide services in this sector are not compromised.

Renewable energy can provide greater energy security, more stable energy bills and reduced carbon emissions, but it is important to ensure that the public's role in delivering the required infrastructure is recognised. Good Energy's Development Charter is designed to ensure that members of the public and our customers hold us to the high standards we aspire to, particularly around positive community engagement and ensuring that renewable energy projects benefit the communities that host them.

Recent tariff reform proposals under the Retail Market Reform are in general welcome to promote further competition in the market, and prevent the large suppliers from being able to offer cross subsidised tariffs.  There has been some concern over the impact on allowing innovation, however DECC and OFGEM are keen to avoid this.

Smart metering implementation is still due to start in 2013, with a final delivery date of smart metering in all homes by 2019. There seems to be delivery risks around this programme across the industry and potential cost increases in the future, but wider efficiencies around metering for decentralised generation. It also potentially creates new opportunities around tariff innovation.

Prospects for 2013 and beyond

2012 has been a year of significant progress for Good Energy. We have focused on delivering improvements to our core infrastructure in terms of trading systems and we developed our FIT administration and generation business. The Company intends to continue to develop and grow all these areas in 2013, in particular we are:

•     Positioning the Company as an increasingly vertically integrated player in the renewable energy space; with the aim of purchasing 50% of electrons from 110MW from our own developments by 2016, to support the long term financial and physical hedging strategy and maximising the margins for both businesses through synergies across a range of renewable technologies; 

•     Currently concentrating on onshore wind and solar, with a view to investigating new technologies from 2015 and beyond once EMR is clarified including the further development of community engagement and benefit strategies to support this;

•     Innovating the service offering and delivery of a local tariff for communities living close to our renewable development opportunities, plus the development of Heat Pump and Electric Vehicle tariffs to deliver services to new sub-sectors of energy demand in the electricity market;

•     Delivering improved trading margins through improvement in granularity of trading allowing our retail offerings to improve competitive positioning and ensure that margins are protected;

•     Developing options around FIT to improve cost to serve, investigating enhanced services and the potential to grow the current portfolio including continuing to improve our ability to purchase power from smaller generators and increase the value of this portfolio; and

•     Continuing to grow the core electricity customer base through competitive positioning, marketing and business development activity and improved brand awareness, with close attention to our communication strategy.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

	2012 (£)	2011 (£)
		(re-presented)
Revenue	28,202,198	21,577,469
Cost of sales	(18,652,651)	(12,885,246)
GROSS PROFIT	9,549,547	8,692,223
Administrative expenses	(7,524,694)	(6,905,484)
OPERATING PROFIT	2,024,853	1,786,739
Finance income	38,547	6,482
Finance costs	(687,872)	(737,316)
PROFIT BEFORE TAX	1,375,528	1,055,905
Taxation	(191,353)	(204,463)
PROFIT FOR THE YEAR	1,184,175	851,442
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY	1,184,175	851,442
Earnings per share:      Basic	13.2p	12.4p
Diluted	12.6p	12.1p

Consolidated Statement of Financial Position

As at 31 December 2012                            

	2012 (£)	2011 (£)
		(re-presented)
Non-current assets
Property, plant and equipment	11,011,568	11,295,142
Intangible assets	2,938,372	2,226,896
Investments	58	58
Total non-current assets	13,949,998	13,522,096
Current assets
Inventories	2,676,601	3,305,196
Current tax receivable	-	45,668
Trade and other receivables	3,812,989	3,567,935
Cash and cash equivalents	9,535,320	2,369,721
Total current assets	16,024,910	9,288,520
TOTAL ASSETS	29,974,908	22,810,616
Equity and liabilities
Capital and reserves
Called up share capital	626,132	390,838
Share premium account	6,728,666	3,536,421
EBT shares	(469,652)	(537,011)
Retained earnings	4,167,098	3,313,345
Total equity	11,052,244	6,703,593
Non-current liabilities
Deferred taxation	643,531	396,024
Borrowings	8,658,632	9,201,557
Total Non-current liabilities	9,302,163	9,597,581
Current liabilities
Borrowings	542,925	511,366
Trade and other payables	9,001,412	5,998,076
Current tax payable	76,164	-
Total current liabilities	9,620,501	6,509,442
TOTAL LIABILITIES	18,922,664	16,107,023
TOTAL EQUITY AND LIABILITIES	29,974,908	22,810,616

Consolidated Statement of Changes in Equity

For the year ended 31 December 2012

	Share Capital (£) (re-presented)	Share Premium (£) (re-presented)	EBT shares(£)   (re-presented)	Retained Earnings (£)	Total (£)
At 1 January 2011	390,838	3,536,421	(537,011)	2,461,903	5,852,151
Profit for the year	-	-	-	851,442	851,442
Total comprehensive income for the year	-	-	-	851,422	851,442
At 31 December 2011	390,838	3,536,421	(537,011)	3,313,345	6,703,593
At January 2012	390,838	3,536,421	(537,011)	3,313,345	6,703,593
Profit for the year	-	-	-	1,184,175	1,184,175
Total comprehensive income for the year	-	-	-	1,184,175	1,184,175
Shares issued in year	235,294	3,764,706	-	-	4,000,000
Cost of shares issued in the year	-	(572,461)	-	-	(572,461)
Purchase of shares by EBT	-	-	(49,500)	-	(49,500)
Sale of shares by EBT	-	-	116,859	(19,351)	97,508
Dividend Paid	-	-		(311,071)	(311,071)
Total contributions by and distributions to owners of the parent, recognised directly in equity	235,294	3,192,245	67,359	(330,422)	3,164,476
As 31 December 2012	626,132	6,728,666	(469,652)	4,167,098	11,052,244

Consolidated statement of Cash Flows
For the year ended 31 December 2012

	2012 (£)	2011 (£) (re-presented)
Cash flows from operating activities
Operating cash flow	6,045,215	4,006,176
Finance income	38,547	6,482
Finance costs	(687,872)	(737,316)
Income tax received/(paid)	177,986	(34,269)
Net cash flows from operating activities	5,573,876	3,241,073
Cash flows from investing activities
Acquisitions of property, plant and equipment	(275,288)	(2,088,250)
Acquisitions of intangible fixed assets	(786,099)	(85,760)
Net cash flows used in investing activities	(1,061,387)	(2,174,010)
Cash flows from financing activities
Payments of dividends	(311,071)	-
Bank financing repaid	(368,841)	(298,374)
Capital repayments of finance leases	(142,525)	(34,073)
Proceeds from issue of shares	3,427,539	-
Purchase of own shares	(49,500)	-
Sale of own shares	97,508	-
Bank financing advanced	-	1,804,945
Net cash flows from financing activities	2,653,110	1,472,498
Net increase in cash and cash equivalents	7,165,599	2,539,561
Cash and cash equivalents at beginning of year	2,369,721	(169,840)
Cash and cash equivalents at end of year	9,535,320	2,369,721

Notes to the financial information

1. General Information
Good Energy Group PLC is listed on the Alternative Investment Market of the London Stock Exchange and is incorporated and domiciled in the United Kingdom.

The Company's registered office is 2 Temple Back East, Temple Quay, Bristol, BS1 6EG and its principal place of business is Monkton Reach, Monkton Hill, Chippenham, Wiltshire, SN15 1EE. The Company's registered number is 04000623.

2. Basis of preparation of Financial Information
This announcement is an extract from the consolidated financial statements of the Company for the year ended 31 December 2012 and comprises the Company and its subsidiaries.  The consolidated financial statements were authorised for issuance on 8 April 2013. These financial results do not comprise statutory accounts for the year ended 31 December 2012 within the meaning of Section 434 of the Companies Act 2006. The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2012 within the meaning of Section 434 of the Companies Act 2006, but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the Company's Annual General Meeting. The auditors' reports on the statutory accounts for the years ended 31 December 2011 and 31 December 2012 were unqualified and do not contain statements under s498(2) or (3) Companies Act 2006.

This Financial Information has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The Financial Information has been prepared on a going concern basis and under the historical cost convention.

Certain statements in this announcement constitute forward-looking statements. Any statement in this announcement that is not a statement of historical fact including, without limitation, those regarding the Company's future expectations operations, financial performance, financial condition and business is a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, amongst other factors, changing economic, financial, business, regulatory or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this announcement and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this announcement should be construed as a profit forecast.

Re-presentation of Comparative Amounts

During the course of the preparation and admission of the Company to AIM and the subsequent preparation of the 2012 Annual Report, the Directors performed a comprehensive update and review of the disclosures required in the Annual Report and Financial Statements of the Company.

As a consequence the information for the year ended 31 December 2012 has been prepared reflecting the following presentational changes, together with re-presented figures for the year ended 31 December 2011 where necessary. There is no impact on the overall results for these periods.

·     The depreciation charge in respect of the wind farm at Delabole has been reclassified as a cost of sale. In the year ended 31 December 2011 a charge of £0.49m was included in administration expenses and has been restated in this financial information. There is no impact on operating profit or profit before tax as a result of this change.

·     In respect of the year ended 31 December 2011, the cash outflow for the purchase of plant and machinery for Delabole has been increased by £2.04m and a corresponding adjustment has been made to the movement in trade creditors. There is no impact on the overall reported cash flow for the year.

·     In respect of the year ended 31 December 2011 the cash outflow for the purchase of software has increased by £0.45m and a corresponding adjustment has been made to the drawdown of finance lease funds.

·     The diluted earnings per share (EPS) calculations for the year ended 31 December 2011 has been restated in accordance with IAS 33. For the year ended 31 December 2011, the diluted EPS has increased from 10.9p to 12.1p.

·     In respect of the year ended 31 December 2011, ordinary shares of the Company of £0.54m which are held by the Good Energy Employee Benefits Trust have been reclassified from share capital and share premium to a separate equity reserve.

·     In respect of the year ended 31 December 2011, the prepaid expenses balance of £0.13m held by Good Energy Generation Limited in respect of costs incurred for ongoing projects to secure development rights and planning permission to establish power generation units on a number of different sites has been reclassified as inventory.

·     In respect of the year ended 31 December 2011, the inventory balance of £0.36m held by Delabole in respect of  Renewable Obligation Certificates (ROC's) not yet issued has been reclassified as accrued income.

·     In respect of the year ended 31 December 2011, operating cash flows in the parent company cash flow statement have been increased by £0.45m for movements on intercompany loan balances which have been reclassified as cash flows from financing activities.

3. Segmental analysis

The chief operating decision-maker has been identified as the Board of Directors (the 'Board'). The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.

The Board considers the business from a business class perspective, with each of the main trading subsidiaries accounting for each of the business classes. The main segments are:-

-Energy supply and FIT administration

-Gas supply

-Electricity generation

-Holding companies, being the activity of Good Energy Group PLC and the development of new electricity generation sites

The Board assesses the performance of the operating segments based primarily on summary Financial Statements, extracts of which are reproduced below.

An analysis of profit and loss, assets and liabilities and additions to non-current asset, by class of business, with a reconciliation of segmental analysis to reported results follows:

Year ended 31 December 2012	Electricity supply and FIT administration (£)	Gas supply(£)	Electricity Generation (£)	Holding Companies (£)	Consolidation Adjustments(£)	Total (£)
Revenue
Revenue from external customers	23,099,959	3,998,106	1,085,667	18,466	-	28,202,198
Inter-segment revenue			1,208,186		(1,208,186)	-
Total Revenue	23,099,959	3,998,106	2,293,853	18,466	(1,208,186)	28,202,198
Expenditure
Cost of sales	(15,809,516)	(3,134,317)	(917,004)	-	1,208,186	(18,652,651)
Administrative expenses	(4,883,843)	(651,435)	(118,679)	(1,729,116)	-	(7,383,073)
Depreciation & amortisation	(136,919)	-	-	(4,702)	-	(141,621)
Operating profit/(loss)	2,269,681	212,354	1,258,170	(1,715,352)	-	2,024,853
Net finance (costs)/income	3,821	6,286	(657,344)	(2,088)	-	(649,325)
Profit before tax	2,273,502	218,640	600,826	(1,717,440)	-	1,375,528
Taxation	(426,704)	(44,567)	(143,358)	423,276	-	(191,353)
Net profit/(loss) for year	1,846,798	174,073	457,468	(1,294,164)	-	1,184,175
Segments assets & liabilities
Segment assets	14,753,317	1,256,760	13,303,292	8,311,610	(7,650,071)	29,974,908
Segment liabilities	(11,002,086)	(864,903)	(10,159,957)	(746,403)	3,850,685	(18,922,664)
Net assets	3,751,231	391,857	3,143,335	7,565,207	(3,799,386)	11,052,244
Additions to non-current assets	1,048,390	-	4,041	3,098,957	(3,090,001)	1,061,387

Segmental analysis continued

Year ended 31 December 2011	Electricity supply and FIT administration (£)	Gas supply(£)	Electricity Generation (£) (re-presented)	Holding Companies  (£)	Consolidation Adjustments     (£)	Total (£)
Revenue
Revenue from external customers	18,199,428	2,391,879	986,162	-		21,577,469
Inter-segment revenue	-		1,254,829	-	(1,254,829)	-
Total Revenue	18,199,428	2,391,879	2,240,991	-	(1,254,829)	21,577,469
Expenditure
Cost of sales	(11,707,748)	(1,737,347)	(694,980)	-	1,254,829	(12,885,246)
Administrative expenses	(4,811,337)	(503,317)	(263,157)	(784,382)	-	(6,362,193)
Depreciation & amortisation	(485,847)	(45,175)	-	(12,269)	-	(543,291)
Operating profit/(loss)	1,194,496	106,040	1,282,854	(796,651)	-	1,786,739
Net finance (costs)/income	(16,630)	9,016	(711,452)	(11,768)	-	(730,834)
Profit before tax	1,177,866	115,056	571,402	(808,419)	-	1,055,905
Taxation	(238,052)	(30,491)	(105,259)	169,339	-	(204,463)
Net profit/(loss) for year	939,814	84,565	466,143	(639,080)	-	851,442
Segments assets & liabilities
Segment assets	8,111,336	930,281	13,609,597	5,690,415	(5,531,013)	22,810,616
Segment liabilities	(5,206,901)	(512,498)	(10,908,855)	(1,195,519)	1,716,750	(16,107,023)
Net assets	2,904,435	417,783	2,700,742	4,494,896	(3,814,263)	6,703,593
Additions to non-current assets	582,786	-	-	1,500	-	584,286

4. Earnings per Ordinary Share

The calculation of basic earnings per share at 31 December 2012 was based on the net profit attributable to owners of the parent of £1,184,175 (2011: £851,442) and a weighted average number of ordinary shares outstanding during the year ended 31 December 2012 of 8,991,576 (2011: 6,871,337) after excluding the shares owned by Clarke Willmott Trust Corporation Limited in trust of the Good Energy Group Employee Share Option Scheme.

The calculation of diluted earnings per share at 31 December 2012 was based on the net profit attributable to owners of the parent of £1,184,175 (2011: £851,442) and a weighted average number of ordinary shares outstanding during the year ended 31 December 2012 of 9,375,514 (2011: 7,064,275), calculated as follows:

	Consolidated
	2012 (number)	2011(number) (Re-presented)
Basic weighted average number of ordinary shares	8,991,576	6,871,337
Dilutive potential Ordinary Shares:	383,938	192,938
Weighted average number of Ordinary Shares (diluted)	9,375,514	7,064,275

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares. The Company has one category of dilutive potential ordinary shares, share options. For the share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to the outstanding share options. The number of shares calculated in this way is compared with the number of shares that would have been issued assuming exercise of the share options.

-ends-

 

END

 

 

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