Un-audited Results for 12 months ended 31 Dec 2021

RNS Number : 3130G

Good Energy Group PLC

29 March 2022

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

Un-audited preliminary results for the 12 months ended 31 December 2021

Resilient financial performance and platform to accelerate strategy

Good Energy, the 100% renewable electricity supplier and innovative energy services provider, today announces its preliminary results for the twelve months ended 31 December 2021.

Financial highlights - continuing operations

· The Company is now substantially debt free with a strong cash position

· Sale of generation assets completed in January 2022 for total consideration of £21.2m. The company is now debt free on a net basis.

· Sale proceeds provide a balance of growth capital and buffer to volatile wholesale energy market. The Company navigated 2021 successfully where 60% of suppliers failed.

· A resilient financial performance, despite significant pressure from commodity markets and low wind levels

· Revenue increased 11.8% to £146.0m (FY 20: £130.6m) driven by significant price rises throughout the year in response to rising wholesale costs.

· Gross profit decreased by 8.6% to £27.0m (FY 2020: £29.6m) with a gross profit margin of 18.5% (FY 2020: 22.6%). This was driven by an unprecedented energy crisis and quadrupling of the wholesale market price. Cash generated from operations reduced 66% to £3.9m.

· Underlying profit before tax of £2.6m (FY 2020: profit £0.5m). Reported profit before tax of £1.8m included non-underlying income of £0.8m associated with generation debt restructuring.

· Reported loss for the period of £4.1m includes a £5.7m reduction in relation to discontinued activities and the sale of the generation assets. Driven by accounting treatment as a result of the disposal of generation portfolio assets in January 2022.

· Reported loss per share of 21.8p (FY 20: 0.9p). Basic earnings per share from continuing operations increased to 13.2p (FY 20: 0.9p).

· Given the generation assets sale and strong cash position, the Board has proposed a final dividend of 1.8p, leading to a full year dividend of 2.55p.

· Going forwards, the Company will shift its capital allocation towards growth and investment, whilst maintaining a strong balance sheet as a buffer to volatile wholesale energy markets.

Operational highlights

· Good Energy has delivered a resilient performance throughout 2021 with continued investment across the business supporting the journey to a zero-carbon Britain.

· Smart meter rollout progressing well, despite impact from COVID restrictions. Demand and installation numbers improved as lockdown restrictions eased and in line with expectations. Over 30,000 smart meters installed to date, with almost 22,000 installed in 2021 in line with expectations.

· Two market leading billing platforms integrated. Kraken and Ensek offer an enhanced digital service for customers, with 100% of customers now migrated successfully on both platforms.

· Resilient business practices offer stability in the face of wholesale market pressures. We remain well hedged for summer 2022 and plan to increase incrementally hedging for winter 2022.

· The Company's ongoing derogation from the domestic SVT price cap provides a degree of pricing flexibility to support the Company's 100% renewable stance.

· Zap-Map has continued to make strong progress with the development of several new commercial products. Ready to scale on completion of current funding round.

· Zap-Map registered users increased 125% to 350,000, reflecting strong growth in electric vehicle uptake in 2021. Mapping data includes 95% of the UK's public charging points on its network. Over 75% of the UK's EV drivers have downloaded Zap-Map.

· Zap-Pay rollout continuing at pace, with nine charge point operators and 25% of the rapid charging market signed to date.

· Subscription service launched in June 2021. Good levels of customer conversion experienced particularly from new EV drivers.

· Richard Bourne appointed CEO, leading the execution of Zap-Map's strategy, including the on-going development of its core products and international expansion.

· Fleet service EV fuel card with Fleetcor UK (Allstar Business solutions) launched in March 2022.

· Good Energy confirms its intention to participate in Zap Map's current Series A funding round, with process due to complete in the next quarter.

· Customer numbers increased in 2021 across all categories of the business.

· Overall Good Energy customer numbers increased by 2.1% to 277.3k.

· Domestic customers increased 1.1% to 85.8k.

· Business customers increased 20.1% to 11.3k.

· Feed in tariff (FiT) customers increased 1.4% to 180.3k.

· Zap-Map total registered users increased 125% to 350,000 (Dec 21: 155.5k users).

Outlook Highlights

· Launching ambition to support one million homes and businesses to cut carbon from their energy use and transport by 2025.

· Following the sale of the generation assets in January 2022, the Company is well positioned to invest for future growth and to withstand current volatility wholesale energy markets.

· Substantially debt free with a strong cash position of £19.6m as at the end of February 2022.

· Continuing to invest for growth across the business by building a platform for energy services in decentralised energy. Further investment into Zap-Map planned, building out a strong mobility offering.

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

"In December, I called the high cost of energy a national crisis. This has been exacerbated by Russia's aggression against Ukraine. Whilst renewables should play a vital role in our long-term energy strategy, only the Government can bring short term respite. The response to date has been inadequate, and further support will undoubtedly be needed.

"In 2021, 28 energy supply companies failed, hitting customers' bills and their trust in the industry. This was the result of both poor business practices and the UK's continued reliance on volatile global fossil fuel markets. There has never been a greater need for clean energy products from a reliable, real renewable, trusted company.

"Today we announce our ambition to support one million homes and businesses cut carbon from their energy and transport use by 2025. We are making it simple to generate, share, store, use and travel by clean power by continuing to invest in products, services and businesses that help customers play an active role in the energy transition.

"Following the sale of our generation portfolio, we are now a substantially debt free business with a strong balance sheet. We will continue to invest for the future, including in Zap-Map to accelerate the transition to electric vehicles. Following a resilient performance in 2021 despite significant market challenges, we're focused on delivering on our exciting, new strategy - helping customers cut carbon, and supporting the growth of renewable generation at a time it has never been more needed."

Enquiries

Good Energy Group PLC Nigel Pocklington, Chief Executive Charlie Parry, Director of Corporate Strategy & Investor Relations Luke Bigwood, Director of External Affairs	Email: press@goodenergy.co.uk

SEC Newgate UK	Email: GoodEnergy@secnewgate.co.uk
Elisabeth Cowell / Molly Gretton	Tel: +44 (0)7900 248213

Investec Bank plc (Nominated Adviser and Joint Broker)
Sara Hale / Jeremy Ellis	Tel: +44 (0) 20 7597 5970

Canaccord Genuity Limited (Joint Broker) Henry Fitzgerald - O'Connor	Tel: +44 (0) 20 7523 4617

Analyst Briefing:

A briefing for Analysts will be held at 9:30am t oday at SEC Newgate, 14 Greville Street, London EC1N 8SB and via web conferencing. Analysts wishing to join should contact investor.relations@goodenergy.co.uk .

Investor Presentation

Nigel Pocklington, CEO, and Rupert Sanderson, CFO, will provide a live presentation via the Investor Meet Company platform on 29 March 2022 at 2:00pm GMT.

Investors can sign up to Investor Meet Company for free and add to meet GOOD ENERGY GROUP PLC via:

https://www.investormeetcompany.com/good-energy-group-plc/register-investor

Investors who already follow GOOD ENERGY GROUP PLC on the Investor Meet Company platform will automatically be invited.

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 1,900 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 support UK households and businesses generate, store and share clean power.

Good Energy is recognised as a leader in this market, through our green kite accreditation with the London Stock Exchange and as the only energy supplier with Gold Standard Uswitch Green Tariff Accreditation for all tariffs.

About Zap-Map www.zap-map.com .

Launched in June 2014, with a mission to accelerate the shift to electric vehicles (EV) and help the drive towards zero carbon mobility, Zap-Map is the UK's leading EV mapping service. The charging point map, available on desktop and iOS/Android apps, helps EV drivers to search for available charge points, plan longer journeys, pay for charging on participating networks and share updates with other drivers.

Zap-Map currently has more than 350,000 registered users and over 95% of the UK's public points on its network, with around 70% being updated with live availability status data. More than 200,000 EV drivers use Zap-Map each month out of an EV parc of 410,000 (SMMT Jan 2022).

Chair's review

Overview

I opened my statement in our 2020 Annual Report by remarking on the historically tumultuous prior year we had witnessed. 2021 certainly sustained that theme, with the continuation of a global pandemic and national lockdowns leading into major disruption for energy.

Geopolitical tensions, including the unfolding and tragic Russian aggression against Ukraine, sent global gas market prices surging upwards to record high levels, taking power prices with them. In late 2021 this was exacerbated by a perfect storm of conditions, ironically including low wind speeds, alongside nuclear outages, which followed on to multiple energy supplier failures.

It was a storm Good Energy did well to weather successfully, due to our prudent hedging and buying power well in advance from our renewable generators - our decentralised model.

Despite these extraordinarily challenging market conditions, we had a good operational performance in 2021 and continued the delivery of our strategy hitting several key milestones. We were able to make tangible investments into that strategy - making it simple for all to generate, share, store, use and travel with clean power.

Towards the end of the year we announced the sale of our generation portfolio. This transformational sale has now completed, leaving Good Energy a substantially debt free company.

Market challenges

The scale of the energy crisis in 2021 was unprecedented. Wholesale power prices quadrupled, and we saw 28 energy suppliers exit the market.

It is a crisis that is not abating soon, stoked further by Russia's appalling actions in Ukraine. Coupled with inflation, which was at a 30 year high at the end of the year, as well as rising food and fuel costs, we are now firmly in the midst of a full scale cost of living crisis.

The UK government has announced a suite of actions to address rising energy bills, and it is inarguable that intervention is required at this time.

Ultimately however, this can only provide relief in the short-term. The long-term solution remains investment in renewable technologies and a shift to a greener energy system. With fewer suppliers in the market, this leaves greater scope for prudent operators like Good Energy to continue driving innovation across the sector.

Strategic developments

Our decision to sell our generation portfolio allows us to redeploy capital from our past to invest in our future and leaves us in a strong cash position despite continued market volatility.

Looking ahead, our first focus will be on decentralised energy. Always a core part of Good Energy's business, we will be giving it renewed focus, building new propositions for customers to generate their own clean power in their homes and businesses.

Hand in hand with this is mobility. EVs are expected to see 47% annual growth through to 2026. Good Energy's subsidiary Zap-Map enjoys a leading position with over 70% share of a rapidly growing EV driver market in the UK. 2021 saw several strategic developments here too, with the launch of paid subscriptions, several key payment platform partners and a partnership with leading fleet operator Fleetcor. We intend to invest further in the business's future.

All of this must be underpinned by strong digital services and operations. Nigel Pocklington, who became Good Energy's new CEO in May 2021, was appointed for this reason. His previous leadership positions with digital platform businesses including Moneysupermarket Group and Expedia positions him perfectly to develop and execute our strategy.

Good Energy Bonds

Following the successful restructuring of the financing on our renewable generation asset portfolio, we were in a strong cash position to repay 70% of the second Good Energy Bond which took place in June 2021. We will consider all relevant funding sources when appropriate for further repayment.

Dividend and capital allocation policy

Alongside our ongoing investments, we aim to deliver a dividend where appropriate, as part of our growth strategy and revised capital allocation policy. The policy has the objective of investing both organically and inorganically across the business and paying a dividend when appropriate to provide an overall return to shareholders. We remain mindful of maintaining and balancing the ability to invest in long term growth opportunities.

Following a good operational performance in 2021, the sale of the generation portfolio and reflecting our confidence in the ongoing business, the Board recommend a final dividend for 2021 of 1.8p per ordinary share, taking our full year dividend to 2.55p.

Good Energy's scrip dividend scheme continues to operate, and the Board will confirm the payment timetable and final dividend in the coming weeks, alongside circulating the Notice of AGM.

Looking ahead

It is difficult to overstate the volatility of the energy market currently. However, Good Energy is well positioned both from a shorter-term balance sheet perspective, but also from a longer-term strategic growth perspective. The climate crisis already provided urgency to transition to a clean energy system. The current turmoil provides geopolitical urgency to achieve greater energy independence, too.

This, coupled with a substantially different looking energy supplier market, leaves Good Energy with a more powerful role than ever to play in accelerating the transition to renewables.

Will Whitehorn

Chairman

CEO review

Overview

Good Energy's mission has always been linked to a crisis - climate change. We now find ourselves in the forefront of a second one, the cost of energy. Well before Russia's attack on Ukraine, we had already seen the impact of sharply rising gas prices, causing first supplier failure and then unprecedented increases in costs to the consumer.

In September, my summary of the first half of 2021 was that the business had made a strong start to the year, both financially, and in delivering against some key strategic objectives. Our financial performance showed very clear recovery from the comparable period - which was heavily hit by the first COVID lockdown. That performance, along with the balance sheet improvements we announced at our full year results earlier in the year meant that we announced a resumption of the dividend.

In terms of strategy, I was able to point to several significant milestones passed in our development of mobility and energy as a service - marrying digital platforms to help consumers and businesses adopt green energy and consume it intelligently. We also spoke about the growth of Zap Map, new tariffs for EV drivers, progress in rolling out smart meters - a key enabler, and about our plans for our customers who generate as well as consume power.

In the second half of the year, we've seen largely unprecedented and structural changes to the UK energy landscape. However, I am proud of the way our business has reacted to these events.

Despite rising wholesale prices, a raft of suppliers exiting the market and significant operational changes we have continued to operate successfully. We had a challenging December, with record low wind levels and record highs in wholesale electricity and gas prices. Throughout the crisis we have used our flexibility to set appropriate prices, and improved cash collection capabilities and systems, to mitigate the impact on our business and our management of working capital.

We have since seen some measures announced by Government for the protection of customers' bills, including its £200 Energy Bills Rebate scheme. In the Chancellor's most recent Spring Statement we also saw VAT scrapped for energy efficiency measures such as solar panels, heat pumps or insulation. Whilst not likely to help the most vulnerable customers in the short term, this is a welcome move which aligns well with Good Energy's strategy.

Having announced our intention to sell our generations assets, we completed this transformational transaction in January 2022. This was a landmark moment for Good Energy. Whilst we celebrate our history and impact on growing renewable energy in the UK, we are moving forwards. We are using the proceeds from our past to invest in our future.

Navigating the crisis and making progress on our strategy has only been possible with the support of Good Energy's dedicated and professional team, and the patience of our customers, many of whom have been with the business for several years. I am very aware of the impact of high energy costs on society and the economy, and we will look to reduce this where we can, as soon as we are able. The longer term need these events have exposed - for a resilient, renewable and secure energy strategy for the UK, is of course, at the very heart of our mission as a company.

Shareholder support

I would like to place on record my sincere thanks to Good Energy's shareholders for their consistent support both through the energy market crisis and the unwanted and hostile takeover bid we saw in the first months of my tenure.

As a listed business, we routinely provide detailed levels of disclosure on a wide range of topics. As a purpose driven business, transparency and trust is even more important. The strong support we received in recent shareholder actions, really demonstrate to me that we have an engaged, loyal and supportive shareholder base. I'm excited about the future of this business and look forward to delivering on our exciting digital first strategy as part of the next wave of the energy market transition.

Green accreditation

We continue to raise awareness for customers to make a clean energy choice, enabling direct impact on the transition to a zero-carbon future.

In March 2021, we became the first energy supplier to have all of our standard variable and fixed tariffs accredited as Uswitch Green Tariff Gold Standard. The comparison and switching service's independent panel judged our electricity and gas tariffs to be 'market leading in their environmental credentials'.

In October 2021 we topped Which? magazine's new league table about the sustainability of energy suppliers. This resulted in us being awarded an Eco Provider badge after a lengthy research process, which saw us come top out of over 40 energy companies, many of which have now exited the market. This validates the unique work we have been doing to support renewables for over 20 years.

We attended COP26 in November and our secondary school-aged Good Future Board attended COY16, a precursor to COP26 to input youth voices into negotiations. We continue to push for meaningful change across this industry.

Purpose and strategic vision

Today we launch a bold vision for the coming years. Our ambition is to support one million homes and businesses cut carbon from their energy and transport used by 2025.

Our mission remains as it always has. To power a cleaner, greener world. We make it simple to generate, share, store, use and travel by clean power.

In order to deliver this bold vision, we will be laser focused on our target markets and service offerings.

Renewable supply business

· Fairly priced, transparent, 100% renewable electricity.

Decentralised energy

· Services to help homes and businesses generate, store, consume and share their own power.

Mobility

· Make it easier to own, drive, fuel and pay for an electric vehicle.

Energy supply market context

Despite our clear strategic direction, the current energy market volatility has caused us to pause some of our more acquisitive customer ambitions in the short term.

In 2021, we saw the trend of consolidation continue in the energy supply market. In total, 28 firms collapsed throughout the year. Whilst many were victims of circumstance, a great deal were poorly run, unhedged businesses which will lead to the taxpayer and customers, footing the bill.

As a result, in February 2022 we saw the price cap increase by a staggering 54% to £1,971. Expectations are that this will rise further throughout the year, given continued elevated wholesale prices.

The devastating war in Ukraine is a stark, but horrifying, reminder of the need for scaling up renewable energy and services, which the UK can and should be at the forefront of.

Before this event, we had already seen prices quadruple throughout 2021. Despite initial abatement in early 2022, the war in Ukraine and associated geopolitical nervousness has seen prices increase further. Electricity increased 472% and gas increased 752% year on year (March 2022 vs March 2021).

We are not immune from this energy crisis, which has affected everyone from consumers to suppliers, regulators, and government.

In November 2021, we highlighted the impact of incurring additional commodity costs from a higher number of business and domestic customers than expected. We expected this to continue into the first quarter of 2022and this has indeed been borne out.

In December 2021, we outlined that the elevated wholesale prices and record low wind levels would lead to an adverse impact to our full year results by approximately £3m. Electricity prices increased 36% in December alone, whilst wind output was materially below seasonal norms.

Despite this impact, we have continued to mitigate against these risks where possible.

· Our ongoing derogation from the price cap provides us with a degree of pricing flexibility, recognising our commitment to 100% renewables and the associated cost of delivering this service.

· To absorb some of the higher input costs, we announced a second domestic SVT price rise of 30% to be effective from 17 January 2022.

· We expect this to minimise the impact of the rising forward prices over the medium term. We will continue to monitor the need to increase prices further, given our exemption from the price cap.

· We expect prices to stabilise, albeit it at a significantly higher level, throughout 2022 and 2023.

· We remain well hedged for summer 2022 and plan to incrementally increase hedging for winter 2022.

More recent events have heightened market volatility. The escalating crisis between Russia and Ukraine has caused significant short-term spikes in price since 21 February 2022. In early March, the price of gas spiked over £8.00/therm.

The longer-term impact on the UK and European energy markets remains unknown, but a reduction on reliance on Russian gas inevitable. This structural shift in the source of UK energy supply provides a material opportunity to further accelerate our development and deployment of renewable generation.

We anticipate that the days of low prices and aggressive price competition are unlikely to return in the short or medium term. Whilst there will inevitably be pain for customers, we are well positioned to help those customers wishing to go green and have the services to generate, consume, share and store fully renewable power. We see this market evolving to be increasingly focused less on price competition, but more on trust, purpose, products and services. We are well aligned with this change in market focus and are well placed to prosper.

Strategic update - investing for growth

Renewable supply

Our focus is to provide fair priced, transparent, 100% renewable electricity.

We are different as we source 100% renewable electricity from over 1,900 independent generators across Britain. As of January 2022, our fuel mix was 49% wind, 33% biogen, 14% solar and 4% hydro.

We exist to give our customers the ability to generate their own power, not just buy ours. To do this, we have a clear strategy for a growing market in decentralised, digitised clean energy and transport services based on 100% 'real' renewable power. We are already successfully delivering on this strategy, as shown in our integration of new digital customer service platforms for home and business customers and launch of innovative new tariffs for electric vehicle (EV) drivers.

Real renewable electricity

Good Energy has supplied 100% renewable electricity for over 20 years, sourcing power directly from renewable generators and not using regulatory loopholes to 'greenwash' with certificates.

Today we are:

· Differentiated as a UK supplier backing all electricity supply, both business and domestic, with long-term contracts with renewable generators.

· The only UK supplier with the Uswitch Green Tariff Gold Standard accreditation for all its tariffs.

Excellent customer service

We have successfully embedded new digital customer service platforms for home and business customers. These investments have delivered consistently high customer satisfaction ratings and helped to bring our prices down:

· The Kraken customer service platform, from Octopus Energy Group, is scalable and more efficient. It enables us to easily launch new "smart" and "agile" tariffs.

· 100% of domestic supply customers have been migrated to the Kraken platform.

· We have an 'excellent' 4.5* rating from customers on Trustpilot.

· We partnered with one of the leading software suppliers to UK energy, Ensek, to install a slicker, digital billing system for our business customers. 100% of our business customers have now been moved to the Ensek platform, enabling improved services and efficiencies through self-service.

· We have now managed through some short-term migration issues, and this has helped to drive record cash collections in recent months.

Digital services

Our new customer service platforms form one of the building blocks towards digitising our business. Others include:

· The appointment of our new Chief Executive Officer, Nigel Pocklington, who joins from Moneysupermarket Group with a wealth of experience in digital led, customer-centric businesses.

· Our controlling stake in the UK's leading app in electric transport, Zap-Map, which has over 350,000 registered users, and over 95% of the UK's public charging points on its network. Over 70% of the UK's EV drivers have downloaded Zap-Map.

· Our existing 180,000 energy services customers for whom we operate as Feed-in Tariff administrator.

· Our smart meter rollout is on track with over 22,000 installed in 2021 and almost 30,000 total installations to date.

As part of an ever-increasing digital offering, we are turning sustainability into an engaging digital experience. We continue to evolve our digital offering to introduce new customer touch points and cross-sell opportunities. These improved digital tools are aimed at lowering cost to serve and improving our monthly average users.

In late 2021 we released an automation to our feed in tariff (FiT) meter reading capabilities. In Q4 2021, we saw a 50% reduction in the number of manual meter reads required on FiT tariff submissions by customers. This improves both the customers experience, as well as the time required to services these customers effectively.

We are continuing to roll out improvements across our app, portal and customer journey. Alongside these digital improvements will be an increasing number of collaborative referral partners helping to drive cross sell opportunities for more engaged customers.

Energy trading

One of the features that separates us versus other energy suppliers is our in-house trading capabilities. We have a history of implementing a robust hedging policy.

These trading capabilities have become of increasing importance in an energy market as volatile as we have seen recently. We remain well hedged for summer 2022 and plan to incrementally increase hedging for winter 2022.

In October 2021, we partnered with Barrow Green Gas ("Barrow") for shipping services. The agreement ensured continuity for our gas customers and builds on our longstanding relationship with Barrow. This ensured continuity of supply for our gas customers following the market exit of CNG. Looking ahead, our extensive experience in trading renewable electricity alongside our existing array of counterparty relationships means we are well placed to become our own gas shipper, and Barrow is an ideal partner for that journey.

The implementation of both Kraken and Ensek act as foundations for further trading optimisation as we continue to develop further energy services. Particularly focused on half hourly settlement, more agile smart tariffs and an increased focus on accessing revenue streams from the flexibility markets.

Decentralised energy

Services to generate, store, consume and share your own power.

Services

We will help people optimise their energy and be as efficient as possible, through a range of options. We are aiming to evolve into a trusted portal on how to go green, to help people make the best choice for them.

Alongside our own products, we will use referrals to build a network of services for customers. We want to be trusted and increase the length of relationships with our customers. We have a committed and motivated green customer base and increasingly see this business as a referral engine for further products and services for the right customers. Almost half of our existing feed in tariff customers were referred by solar installers.

We are actively investing in services and businesses that can accelerate our offering.

Feed in tariff

We are one of the UK's leading FiT providers. As of December 2021, 65% of our meter points were feed in tariff customers. We have a 93% satisfaction rating, with customers overwhelmingly positive about their experience. We have built and demonstrated capabilities to deliver a valuable administrative service to solar customers. We believe that this presents several opportunities in similar markets.

We see several cross-sell opportunities to existing and new customers. Currently, only 7% of FiT customers are also domestic supply customers. We are actively investing in propositions to provide additional value for this customer base, such as our smart export programme and referral partner offers in EV charging, battery storage and heat pumps.

Whilst the feed in tariff is closed to new entrants, The UK rooftop solar sector is booming, as homes and businesses turn to solar to mitigate the impact of the energy price crisis. This reflects homeowner, business, and investor confidence. Solar PV capacity installations increased 36% in 2021 to 730MW.

This provides clean, affordable energy that reduces dependency on fossil fuels, while installation of on-site solar protects against wholesale price volatility. Self-generation reduces cost and increases certainty. There is a clear opportunity to tie renewable supply alongside solar generation, EV charging and battery storage.

Smart export payments

We have continued to develop new offerings for solar customers. Our smart export solution pays users for what they export as opposed to deemed rates. This could provide customers with high export a significant increased income, ideal for homes who generate more than they are able to use, or who can shift load effectively.

By paying customers for what they export, we can reward customer for making the grid greener. The more electricity the customer sends to the grid, the more they get paid.

In line with our proven capabilities of managing feed in tariff administration, our platform allows us to make it easy to claim from OFGEM, whilst we make a fee for each MWh our customer's export. Helping to build longer, recurring revenue streams.

Partners

We are building a strong network of partners and plan to use referrals to build a network of products for our customers. In these new markets we need to be fast, flexible and responsive whilst focusing on partnerships that will elevate our core offering for customers. We focus on the customer needs of the future and how we make customers feel.

Initial results from our partnership with Caplor energy are extremely positive, reinforcing the view that there is significant demand for solar, electric vehicle and battery storage solutions. Our role is to use this to create a referral engine and develop long lasting customer relationships who engage with an increasing number of products and services. These services will allow us to deliver value add solutions for customers, whilst we share the benefit through recurring revenue streams.

Mobility

Our ambition is to make it easier to own, drive, fuel and pay for an electric vehicle. We have solutions for all areas an electric vehicle driver needs. We will continue to focus on investing in software and services and look to partner for asset and hardware solutions;

· Energy supply

· Customers with increased electricity demand, powered by 100% renewable electricity.

· Time of use tariffs, and automated solutions to help save money and be green

· Services

· Zap-Map providing leading services for all electric vehicle users, both consumer and fleet.

· Help drivers search, plan, drive and pay.

· Charging infrastructure

· Partner with charging asset providers, for public and home charging solutions.

· Payment integrations to remove barriers to adoption

· Electric vehicles

· Partner with car manufacturers as EV adoption increases, driving an increased awareness of energy services

· Working with car purchase, leasing and subscription offerings

We are building a strong network of partnerships for our customers throughout this ecosystem. Our focus is on the energy supply and services, whilst partners will provide more capital-intensive solutions to infrastructure and access to electric vehicles.

In 2021 we released our EV tariff, Green Driver. We also trialled more innovative time of use tariffs, including those with free energy periods. Customer feedback was clear. Longer off-peak windows were preferable, and we are still early in the journey of automated optimisation on more complex tariffs.

Time of use tariffs demonstrated that customers shifted 43% of load off peak, when incentivised with lower off peak rates. More automated solutions allow for an even greater amount of load to be shifted off peak, benefitting not just the consumer, but also the grid in being able to consume renewable electricity when it is most readily available, or when there are less constraints on the grid. We are working on developing these automated solutions, alongside ways for users to monetise and be rewarded for shifting this load.

The electric vehicle is likely to be the catalyst for further decentralised energy solutions alongside solar generation and battery storage. The opportunity to optimise generation, consumption and export is significant in both green and financial terms for consumers and energy suppliers.

Zap-Map

Zap-Map delivered a strong 2021 performance and our focus for 2022 is about scaling up to capitalise on Zap-Map's market leading opportunity.

We intend to participate in the current funding round being undertaken by Zap-Map and we remain in advanced discussions with a number of strategic partners. Our expectation is that this will complete in early Q2 2022. This will allow Zap-Map to embark on its next course of commercial and development goals, which will crystallise its leading position for its market services in the UK and initiate steps of international expansion to selected territories.

The electric vehicle (EV) market is experiencing a seismic shift with record demand. EVs are expected to grow from 10% of new car sales in 2020 to 100% by 2030. This would represent over 27% of the total UK car parc. Throughout this period, we expect a 92% compound annual growth rate (CAGR), with 47% growth expected until 2026.

Zap-Map currently has over 350,000 registered users, and over 95% of the UK's public points on its network. Over 75% of UK EV drivers have downloaded Zap-Map, with growth in Zap-Map downloads more than keeping pace with the rapid growth in the EV market. Growth in users has tracked the growth of the wider electric vehicle market with user numbers up 125% vs December 2020.

Engagement is one of the key metrics for growth. Zap-Map has historically had an early adopter, highly engaged user base. Over 50% of users are monthly active users, a leading indicator of repeat usage. There are over 20k chats per month, 15k monthly routes planned and over 2.5k cross platform users. The breadth and depth of the data available to EV drivers is what defines Zap-Map as the market leader in this category.

In the past twelve months Zap-Map has launched its Zap-Map Plus and Premium subscription services, including support for Apple CarPlay and Android Auto. Its leading cross-network simple payment solution Zap-Pay now has nine networks signed up with Osprey, ESB and char.gy live and new launches including MFG EV Power and GeniePoint coming shortly. It also announced a commercial partnership with worldwide leader in business payments Fleetcor for integration in its Allstar fleet payment platform.

In March 2022, Richard Bourne was appointed as permanent CEO. Bourne joined Zap-Map in January 2021 as Interim CEO, to work alongside the Zap-Map Board on the business' long-term strategic plan.

EV driver products

Zap-Map is a digital platform which enables revenue streams form both consumers and businesses. With the app as a core offering, they have developed a range of products across consumers, fleet and business that leverage their position at the centre of the EV charging market.

Subscriptions

Recurring revenue streams from solving the specific needs of each EV driver segment. Providing value-add services to higher usage customers.

The core of the Zap-Map app remains free but also operates a 'freemium' model offering value added features to simplify the driving experience. Zap-plus has smarter search with enhanced filters and save options, while Zap-premium ads in-car integration with Apple Car-Play and Android Auto.

Since its launch in July 2021, subscriptions have been growing and have seen good levels of initial conversion, particularly with new drivers. The ambition is to have 10% of the userbase as paid subscribers by 2026, which is supported by the experience of other consumer facing freemium models.

For fleet offerings, Zap-Map are launching a co-branded free fleet payment app alongside Allstar business solutions (Fleetcor UK) in Q1 2022. Zap-pro will add to the premium feature set with enhanced route planning and fleet dashboard and reporting functionality.

Zap-Pay

An interoperable payment solution with multiple charging networks accessed with one simple payment method.

For EV drivers, this provides cross-network in app payment, removing the complexity of the fragmented UK charging network. For a user there is a superior experience to contactless payment, with real time charging updates and expense management and history provided.

To date, there are three networks live on Zap-Pay, with nine due live by the end of April 2022. Currently this provides a c. 15% coverage of the total UK charging network, with 25% coverage of ultra / rapid chargers. Good progress is being made signing up new charge point operators, with an ambition scale this up significantly by the end of 2022. Utilisation of the Zap-Pay network continues to grow providing increased driver behaviour insights.

For charge point operators, they are able to promote their network to the Zap-Map user base, which is a low-cost alternative to contactless. There is a clear standards-based integration, control of pricing and terms and conditions, as well as monthly driver behaviour insights which contactless payment is unable to provide. This data allows charge point operators to better understand their customer base and refine services.

Zap-Pay fleet solution

For fleet drivers, Zap-Map have partnered with the UK's number one fuel card service provider, Allstar (Fleetcor UK). This co-branded app allows drivers to search and pay for charging across multiple charge point operator networks. It delivers aggregated monthly billing to fleet managers, with no driver expense management. Simplifying the user experience and removing barriers to fleet adoption of electric vehicles. Allstar will also be reselling the Zap-pro subscriptions to provide enhanced fleet-oriented services to drivers.

Summary

The ongoing impact of COVID-19 coupled with a national energy crisis mean that 2021 is a year that many are unlikely to forget.

However, we have navigated our way through these challenges and are well positioned to deliver on our mission. Powering a cleaner, greener world.

We are using the capital from our past to invest in our future across a range of new technologies, services and businesses. Whilst the upcoming investment into Zap-Map will further help to accelerate the adoption of electric vehicles.

We are a substantially debt free company with a strong balance sheet, primed to capitalise on increasingly favourable market dynamics, as we emerge from the current market volatility.

I would like to thank my Good Energy colleagues for their hard work, and our customers and shareholders for their support in 2021. We remain excited for what the future holds.

OPERATING REVIEW

Wholesale energy market conditions

Power prices

The development of power prices in the last 18 months has been significant following COVID impacts, and dramatic in the last 6 months with average electricity and gas prices 36% and 35% higher in December than November.

Since we entered 2021 prices have continued to escalate reaching as high as £500/MWh in December 2021.

Weather conditions in 2021 impacted volumes with sustained low wind seen through 2021 and especially in December 2021. There was sustained low wind in 2021, up to 33% below seasonal norms. The impact of this was seen clearly with UK onshore wind output down 24% (Q1-Q3 2021 vs Q1-Q3 2020) despite a 2% increase in installed capacity.

Our revenues are sensitive to changes in the demand for electricity and gas. As the pandemic has progressed, markets and businesses have adapted to cope with COVID and we have seen business demand recover materially, with SME business supply volumes up 17% and HH volumes up 20% in 2021 vs 2020.

Overall supply volumes were up 10%, partly driven by average temperatures which were 1.7 degrees lower in the first half of 2021 (vs 2020), and 0.5 degrees lower across the full year (vs 2020); and partly by COVID recovery. The impact of colder weather meant gas supply volume increased from 486GWh in 2020 to 512GWh in 2021.

Our renewable supply business

Cash collections

Significant rise in cash collections in Q4 driven by the fully implemented Kraken customer services platform and standard variable tariff ("SVT") price rises for both Domestic and SME customers, high supply volumes via new and extended business contracts and resolving teething issues with the business billing system (Ensek) migration.

We expect significantly higher cash collections through 2022 and this is an expectation being fulfilled in Q1 2022.

There is an increased focus on good quality business partners to ensure future growth comes hand in hand with good collections performance.

Teething problems with the implementation of our new business billing platform (Ensek) impacted collection during 2021, resulting in lower Q2 & Q3 collection levels. However, in Q4 collections performance improved and the collections deficit was substantially recovered.

Business

Total business supply customers increased by 3% to 144k. SME customers grew the most materially up 27% and HH up 15%, which helped significantly increase electricity supply volumes (2021: 640 GWh, 2022: 560 GWh).

Business FIT customers increased 1.7% to 132.7k, as we continue to maintain our position as one of the market leaders in operating the feed in tariff scheme. Total business supply customers increased by 20.1% to 144k.

Growth in business customers has underpinned our strategy in recent years, and this planned tilting towards business provides us with greater stability through longer term contracts and higher retention levels compared to domestic supply. Whilst gross margins fall because of this shift, operating margins have the potential to increase over time due to the lower cost per acquisition and cost to serve these customers. We continue to partner with a growing number of like-minded businesses, ranging from small, owner-managed businesses to large corporates, providing confidence for the future.

Domestic

Total domestic customers increased by 0.9% to 133k. Domestic FIT customers numbers increased by 0.5% to 47.4k, whilst domestic supply customers increased by 1.0% to 85.8k.

In the domestic supply market, 2021 saw 28 suppliers exit the market. This reinforced our stance that a race to bottom on price was not a viable long-term business model. We remain committed to ensuring that we fair priced, transparent 100% renewable electricity proposition. Elevated energy prices will drive increasing awareness on the sector.

Feed in Tariff ("FIT")

FIT administration provides the foundation of our energy services model. Despite the FIT scheme closing to new entrants in March 2019, we continue to administer the scheme for domestic and business customers. Domestic customers numbers increased 0.5% to 47.4k and business customers increased 1.7% to 132.7k in the period.

Generation performance

The generation portfolio consisted of 6 solar (30.1MW) and 2 wind sites (17.4MW). The Delabole site experienced outages following storms at the start of the year together with some delays to parts being available from Europe as a result of Brexit.

There was sustained low wind in 2021, up to 33% below seasonal norms. The impact of this was seen clearly with UK onshore wind output down 24% (Q1-Q3 2021 vs Q1-Q3 2020) despite a 2% increase in installed capacity.

In January 2022 we announced the disposal of the renewable generation asset portfolio (47.5MW) as part of an ongoing strategic shift to energy and mobility services.

Smart metering

Following delays in 2020 and the first half 2021 due to COVID-19 restrictions, installations are now progressing well. By Jan 7^th, 2022, we had installed 22,00 meters delivering on our 2021 target. Total installed meters to date are close to 30,000 meters.

CFO REVIEW

Overview

The Group has had a resilient financial performance despite significant pressure from commodity markets and low wind levels, impacting on the year's performance.

The first half of 2021 saw significant benefits from power and gas hedged during 2020. The second half of 2021 saw rapidly escalating wholesale prices combined with significant periods of low wind, which combined to hit margins materially.

Pricing flexibility

Winter 2021/2022 commodity costs are showing significant variation due to ongoing geopolitical impacts. However, our ability to raise Standard Variable tariffs ("SVT") through Good Energy's ongoing derogation from OFGEM's price cap gives good Energy a natural lever to offset these impacts and flexibility in such volatile markets.

Following rising wholesale prices in Q4 2021, benefits from associated price rises will flow through to working capital in 2022.

Financial performance

Profit and loss

Revenue increased 12% in the period to £146.0m (2020: £130.6m) driven by growth in supply volumes (up 10%).

Cost of sales increased by 18% to £119.0m (2020: £101.1m). This impact is net of the £6m cost of sale adjustment related to the transfer of the generation activities to discontinued business. Excluding this reallocation cost of sale has increase by 24% to £126.0m.

Gross profit decreased 9% to £27.0m (2020: £29.6m). Gross margin decreased to 18.5% (2020: 22.6%).

Administration costs excluding non-underlying administration costs decreased 5% to £23.8m (2020: £25.0m). This was primarily driven by a £0.7m reduction in ECL provision levels compared to the prior year and smaller other administration cost savings. Total administration costs decreased 3% to £24.6m.

Net finance costs decreased by 86% to £0.6m driven by a combination of significant debt reduction, including the £12m bond repayment in H1 2021, and the transfer to discontinued activities of the generation activities.

Underlying profit before tax of £2.6m includes the impact of the cost of sales adjustment to the transfer of generation activities. There was a £5.7m loss from discontinued operations.

The underlying loss for the period was £3.4m and the reported loss for the period was £4.1m (2020: £0.4m). This reflects the extraordinary market conditions seen in 2021 a alongside the one-off impacts related to sale of the generation business and defending a hostile takeover attempt.

Financial bridge 2020 to 2021*

2021 saw growth in supply customer numbers and a substantial recovery in particularly business electricity supply volumes post COVID. This generated a £2.4m positive profit impact compared to 2020

The current energy crisis - affecting everyone from consumers to suppliers, regulators and government - means we are experiencing ongoing global uncertainty and have not been immune from the impacts from the wholesale market.

In November 2021, we highlighted the impact of incurring additional commodity costs from a higher number of business and domestic customers than expected. This was expected to continue into the first quarter of 2022, at sustained high commodity prices. We have seen this play out to date. In December 2021, we outlined that the elevated wholesale prices and record low wind levels would lead to an adverse impact to our full year results. In aggregate the negative profit impact through higher costs of commodity and other industry costs led to a profit deterioration of £6m compared to the prior year.

Substantially offsetting impacts of a lower ECL provision and the increased gross ZAPMAP loss leads to a continuing business loss before tax of £3.3m in 2021

Intra-group revenue, electricity generated by the discontinued segment generation assets to the used within the customer supply segment of £5.9m is eliminated as usual, however the elimination results in a lower cost of sale within the continuing business, leading to an underlying continuing profit before tax of £2.6m

This intra-group revenue is then removed from discontinued segment before the operating performance of the discontinued generation segment, realising a profit before tax of £0.5m, is added.

This then provides, at a loss of £2.8m, the most meaningful comparison with the FY20 underlying profit of £0.5m

The impairment loss on the generation assets arises from changes in value of the portfolio between the sale announcement date and the year end. This incorporates estimated transaction costs (£1.0m) on the sale of the portfolio and any change in modelled value over this period (£0.2m). The gain on the sale of the revalued assets is offset by writing off previously capitalised transaction and financing costs when the majority of the portfolio was first operationally financed in 2014.

Finally non-underlying costs of £0.8m incurred track to the Company's reported loss before tax of £5.2m.

*A profit bridge slide has been included in the Investor presentation, which is available on the Company's website. ( https://group.goodenergy.co.uk/home/default.aspx )

Cash flow and cash generation

Our business model remains cash generative. Impacts of a business billing system migration had a working capital impact within year but has been materially resolved by end of Q1 2022.

There was a net decrease in cash of £9.7m, which includes the repayment of 70% of Good Energy Bonds II totalling £11.9m. The resulting cash balance of £8.9m (£6.7m continuing operations, £2.2m discontinued operations) (2020: £18.3m) enables continued strategic investments including participation in the Zap-Map funding round.

Cash at the end of February 2022 was £19.6m following the sale of the generation asset portfolio.

Funding and debt

Our business is now substantially debt free on a net basis. In the period, gross debts have reduced by 86.5% compared with year-end 2020. The gearing ratio decreased to -7% following the sale of the generation asset portfolio in January 2022.

Substantial progress has been made against reducing Group finance costs and reducing the gearing ratio. The remaining Good Energy Bonds II outstanding (£4.9m) is reported within non-current liabilities. This is due to an annual redemption request window for bondholders in December of each year. The next bond redemption date is 30 June 2022 with £0.2m due for repayment.

The Group continues to maintain capital flexibility, balancing operating requirements, investments for growth and payment of dividends. Our business remains mindful of the need to capitalise on strategic business development and investment opportunities. Prudent balance sheet management remains a key priority.

Earnings

Reported basic loss per share decreased to -21.8p (2020: 0.9p). Basic underlying earnings per share from continuing operations increased to 13.2p (FY 20: 0.9p).

Dividend

The Board were pleased to restart the dividend and to announce an interim dividend of 0.75p per ordinary share for the period to 30 June 2021, as set out in the Company's interim results released on 14 September 2021.

Good Energy continues to operate a scrip dividend scheme and the payment timetable of the final dividend will be announced alongside the notice of the Annual General Meeting in June.

Non-underlying costs

Total non-underlying costs of £0.8m, relating primarily to corporate defence activities against a hostile takeover approach within 2021. 2021 non-underlying costs were 69% higher than prior year (FY2021 £0.5m).

Expected Credit Loss (ECL)

ECL charge decreased 19% in the period to £3.0m (2020: £3.7m).

The main impacts in year are a faster collection of commercial debt, being offset by increased revenue.

Zap-Map investment

2021 saw a P&L loss related to Zap-Map of £(1.0m) which increased £0.8m from 2020, following a period of continued investment. This was expected and related to Zap-Map's growth plan. At an earnings level the group retains a £0.5m loss reflecting Good Energy's 50.1% stake in Zap-Map.

Events after the balance sheet

Generation portfolio sale

On 25 November 2021, the Company appointed KPMG LLP to lead a sale process for the Company's entire 47.5MW generation portfolio.

On 20 January 2022 the Company announced, that following a competitive process, the disposal of the 47.5MW generation portfolio was complete with Bluefield Solar Income Fund ("BSIF").  Total consideration of up to £24.5m was comprised of initial and deferred payments.  The initial consideration of £16.4m, less distributions since the lockbox date of £0.7m, resulted in £15.7m being paid to the Company on completion.

The final deferred consideration payment has been agreed as follows:

£4.3m has now been paid, with a further up to £0.5m to be paid on 30 June 2022, subject to Good Energy meeting all its payment obligations up to that date for power supplied by the Portfolio to it under the power purchase agreements. 

The total deferred consideration is therefore agreed to be up to £4.8m.

Of the £3.3m that will not be received, £2.3m arose due to the impact of a third-party energy yield assessment on the agreed financial model and £1m arose during detailed technical and financial due diligence.

Total consideration received to date is therefore £20.7m, with an agreed final total consideration of up to £21.2m by 30 June 2022.

We are committed to delivering value to stakeholders and the sale of our generation portfolio, at a significant premium to book value, was a good deal. It is also a significant moment for Good Energy - we are using the capital from our past to invest in our future.

Consolidated Statement of Comprehensive Income (Unaudited)

For the year ended 31 December 2021

	2021	2020
	£'000	£'000
	Unaudited	Restated
REVENUE	146,045	130,649
Cost of sales	(119,019)	(101,065)
GROSS PROFIT	27,026	29,584
Administrative expenses	(23,816)	(25,029)
Non-underlying costs	(806)	(477)

OPERATING PROFIT	2,404	4,078
Finance income	14	109
Finance costs	(584)	(4,172)
Share of loss of associate	-	(13)
PROFIT BEFORE TAX	1,834	2

Taxation	(187)	19
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS	1,647	21

DISCONTINUED OPERATIONS
Loss from discontinued operations, after tax	(5,740)	-
(LOSS)/PROFIT FOR THE PERIOD	(4,093)	21

Attributable to
Good Energy Group PLC	(3,583)	146
NCI	(510)	(125)

OTHER COMPREHENSIVE INCOME:
Other comprehensive income for the year, net of tax	(775)	13,313

TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY	(4,868)	13,334


Earnings per share for the year Basic	(21.8)p	0.9p
Diluted	(21.8)p	0.9p

Earnings per share for the year Basic	13.2p	0.9p
(continuing operations) Diluted	13.0p	0.9p

Consolidated Statement of Financial Position (Unaudited)

As at 31 December 2021

	2021	2020
	£'000	£'000
	Unaudited	Restated
ASSETS
Non-current assets
Property, plant and equipment	209	58,602
Intangible assets	3,891	4,833
Right of use assets	851	5,108
Deferred Tax asset	173	-
Long term security deposits	-	4,552
Total non-current assets	5,124	73,095

Current assets
Inventories	7,682	13,264
Trade and other receivables	35,928	26,715
Short term security deposits	2,414	698
Cash and cash equivalents	6,699	18,282
Total current assets	52,723	58,959
Held for sale assets	62,959	-
TOTAL ASSETS	120,806	132,054

EQUITY AND LIABILITIES
Capital and reserves
Called up share capital	840	833
Share premium account	12,790	12,790
Employee Benefit Trust shares	(444)	(502)
Retained earnings	3,231	6,854
Reserves of disposal group held for sale	11,589	-
Revaluation surplus	-	12,472
Total equity attributable to members of the parent company	28,006	32,447
Non-Controlling Interests	(325)	185
Total equity	27,681	32,632

Non-current liabilities
Deferred taxation	-	4,135
Borrowings	317	53,431
Provisions for liabilities	-	1,316
Long term financial liabilities	-	13
Total non-current liabilities	317	58,895

Current liabilities
Borrowings	6,867	3,630
Trade and other payables	41,253	36,897
Total current liabilities	48,120	40,527
Liabilities associated with held for sale assets	44,688	-
Total liabilities	93,125	99,422
TOTAL EQUITY AND LIABILITIES	120,806	132,054

Consolidated Statement of Changes in Equity (Unaudited)

For the year ended 31 December 2021

	Share capital	Share premium	EBT shares	Retained earnings (Restated)	Revaluation surplus	Reserve of disposal group held for sale	Non-controlling interests	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2020 as previously stated	832	12,790	(549)	5,707	-	-	-	18,780
Prior year adjustment	-	-	-	136	-	-		136
At 1 January 2020 as restated	832	12,790	(549)	5,843	-	-	-	18,916
Profit / (Loss) for the year	-	-	-	146	-	-	(125)	21
Other comprehensive income for the year	-	-	-	-	13,313	-	-	13,313
Total comprehensive income for the year	-	-	-	146	13,313	-	(125)	13,334

Share based payments	-	-	-	39	-	-	-	39
Exercise of options	1	-	47	(15)	-	-	-	33
Acquisition of subsidiary	-	-	-	-	-	-	310	310
Transfer of revaluation to retained earnings
	-	-	-	841	(841)		-	-
Total contributions by and distributions to owners of the parent, recognised directly in equity	1	-	47	865	(841)	-	310	382
At 31 December 2020	833	12,790	(502)	6,854	12,472	-	185	32,632

At 1 January 2021	833	12,790	(502)	6,854	12,472	-	185	32,632

Loss for the year	-	-	-	(3,583)	-	-	(510)	(4,093)
Other comprehensive income for the year	-	-	-	(775)	-	-	-	(775)
Total comprehensive income for the year	-	-	-	(4,358)	-	-	(510)	(4,868)
Dividend Paid	-	-	-	(108)	-	-	-	(108)
Exercise of options	7	-	58	(40)	-	-	-	25
Transfer of revaluation to retained earnings	-	-	-	883	(883)	-	-	-
Discontinued Operations	-	-	-	-	(11,589)	11,589	-	-
Total contributions by and distributions to owners of the parent, recognised directly in equity	7	-	58	735	(12,472)	11,589	-	(83)
At 31 December 2021	840	12,790	(444)	3,231	-	11,589	(325)	27,681

Consolidated Statement of Cash Flows (Unaudited)

For the year ended 31 December 2021

	2021	2020
	£'000	£'000
	Unaudited	Audited Restated
Cash flows from operating activities
Cash generated from operations	3,898	11,425
Finance income	620	19
Finance cost	(2,902)	(3,735)
Income tax received	-	66
Net cash flows generated from operating activities	1,616	7,775

Cash flows from investing activities
Purchase of property, plant and equipment	(248)	(4)
Purchase of intangible fixed assets	(760)	(473)
Transfers from/(to) security deposits	1,971	(228)
Acquisition of a subsidiary, net of cash acquired	-	107

Net cash flows used in investing activities	963	(598)

Cash flows from financing activities
Payments of dividends	(108)	-
Proceeds from borrowings	6,786	-
Repayment of borrowings	(18,076)	(2,184)
Capital repayments of leases	(616)	(411)
Proceeds from exercise of share options	26	33
Net cash flows used in financing activities	(11,988)	(2,562)

Net (decrease)/increase in cash and cash equivalents	(9,408)	4,615
Cash and cash equivalents at beginning of year	18,282	13,667
Cash and cash equivalents at end of year Represented by:	8,874	18,282
Cash and cash equivalents for discontinued operations	2,175	-
Cash and cash equivalents for continuing operations	6,699	18,282

Notes to the Financial Information (Unaudited)

For the year ended 31 December 2021

1. Basis of Preparation

Good Energy Group PLC is an AIM listed company, incorporated in England and Wales and domiciled in the United Kingdom, under the Companies Act 2006.

The principal activity of Good Energy Group PLC is that of a holding and management company to the Group. More detailed information on the Group's activities is set out in the Chairman's statement, the Chief Executive's review and the Finance Director's review.

The unaudited Preliminary Report has been prepared under the historical cost convention and in accordance with International Financial Reporting Standards ("IFRS") and interpretations in issue at 31 December 2021.

The Preliminary Report was approved by the Approvals Committee and the Audit Committee and adopted by the Board of Directors. The Preliminary Report does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006 and has not been audited.

On 24 November 2021, the Group publicly announced the decision of its Board of Directors to sell the Good Energy Holding Company No. 1 Limited group including its wholly owned subsidiaries ("GEGAN

group"). The sale of the GEGAN group was completed on 19 January 2022. At 31 December 2021 the GEGAN group was classified as a disposal group held for sale and as a discontinued operation. The business of GEGAN group represented the entirety of the Group's Electricity Generation operating segment until 24 November 2021. With GEGAN group being classified as discontinued operations, the Electricity Generation segment is no longer presented in the segment note.

The prior year has been restated for:

· The elimination of internally generated Renewable Obligation Certificates (ROCs). This has the impact of reducing inventory by £1,361k and reducing trade and other payable by the same value.

· Adjustments to the treatment of leases under IFRS 16 being the removal of future lease payment increases where the increase is determined by a future index rate, as a result of a prior year adjustment noted by the Group's new auditors. This has the impact of increasing retained earnings by £220k, decreasing right of use (RoU) asset by £816k, decreasing current short-term financial liabilities by £3k and decreasing long-term financial liabilities by £1,033k.

The accounting policies adopted, other than as documented above, are consistent with those of the annual financial statements for the year ended 31 December 2020, as described in those financial statements.

The Preliminary Report is presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.

The Preliminary Report will be announced to all shareholders on the London Stock Exchange and published on the Group's website on 29^th March 2022 . Copies will be available to members of the public upon application to the Company Secretary at Good Energy, Monkton Park Offices, Monkton Park, Chippenham, Wiltshire, United Kingdom, SN15 1GH.

2. 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:

· Supply companies (including electricity supply, FiT administration and gas supply);

· Electricity generation companies (including wind and solar generation companies);

· Energy as a service (including Zap-map and nextgreencar.com)

· Holding companies, being the activity of Good Energy Group PLC.

The Board assesses the performance of the operating segments based primarily on summary financial information, extracts of which are reproduced below. An analysis of profit and loss, assets and liabilities and additions to non-current assets, by class of business, with a reconciliation of segmental analysis to reported results follows:

Segmental analysis: 31 December 2021 (Unaudited)

	Electricity Supply	FIT Admin-isration	Gas Supply	Total Supply Companies	Electricity Generation	Energy as a service	Holding Companies/Consoli-dation Adjustments	Total - Continuing Operations
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue
Revenue from external customers	116,521	5,323	23,491	145,335	-	643	1	145,979
FiT/ROC subsidy revenue	66	-	-	66	-	-	-	66
Inter-segment revenue	-	-	-	-	-	-	-	-
Total revenue	116,587	5,323	23,491	145,401	-	643	1	146,045

Expenditure
Cost of sales	(103,339)	(647)	(14,851)	(118,837)	-	(154)	(28)	(119,019)
Inter-segment cost of sales	-	-	-	-	-	-	-	-
Gross Profit	13,248	4,676	8,640	26,564	-	489	(27)	27,026
Administrative expenses				(17,043)	-	(1,448)	(3,612)	(22,103)
Depreciation & amortisation				(1,578)	-	(134)	(1)	(1,713)
Operating profit/(loss)				7,943	-	(1,093)	(3,640)	3,210
Net finance costs				(67)	-	(2)	(501)	(570)
Share of loss of associate				-	-	-	-	-
Underlying Profit				7,876	-	(1,095)	(4,141)	2,640
Non-underlying items				(806)	-	-	-	(806)
Profit/(loss) before tax				7,070	-	(1,095)	(4,141)	1,834
Segments assets & liabilities
Segment assets				63,415	-	633	(6,201)	57,847
Segment liabilities				48,169	-	1,549	(1,281)	48,437
Net asset/ (liabilities)				15,246	-	(916)	(4,920)	9,410
Additions to non-current assets				1,746	-	3	-	1,749

All turnover arose within the United Kingdom.

Segmental analysis: 31 December 2020 (Audited Restated)

	Electricity Supply	FIT Adminis-tration	Gas Supply	Total Supply Comp-anies	Electricity Gener-ation	Energy as a service	Holding Companies/ Consoli-dation Adjustments	Total - Continu-ing Opera-tions	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue
Revenue from contracts with customers	97,385	5,467	24,462	127,314	1,761	342	-	129,417	129,417
FiT/ROC subsidy revenue	-	-	-	-	1,232	-	-	1,232	1,232
Inter-segment revenue	-	-	-	-	5,786	-	(5,786)	-	-
Total revenue	97,385	5,467	24,462	127,314	8,779	342	(5,786)	130,649	130,649

Expenditure
Cost of sales	(77,826)	(600)	(16,909)	(95,335)	(5,509)	(60)	(161)	(101,065)	(101,065)
Inter-segment cost of sales	(5,786)	-	-	(5,786)	-	-	5,786	-	-
Gross profit	13,773	4,867	7,553	26,193	3,270	282	(161)	29,584	29,584
Administrative expenses				(19,145)	(869)	(598)	(2,481)	(23,093)	(23,093)
Depreciation & amortisation				(1,812)	-	-	(124)	(1,936)	(1,936)
Operating profit/(loss)				5,236	2,401	(316)	(2,766)	4,555	4,555
Net finance costs				(42)	(3,194)	-	(827)	(4,063)	(4,063)
Share of loss of associate				-	-	-	(13)	(13)	(13)
Underlying Profit				5,194	(793)	(316)	(3,606)	2	479
Non-underlying items				(477)	-	-	-	-	(477)
Profit/(loss) before tax				4,717	(793)	(316)	(3,606)	2	2
Segments assets & liabilities
Segment assets				54,502	73,815	320	4,778	133,415	133,415
Segment liabilities				41,217	65,723	215	(2,372)	100,783	100,783
Net assets				13,285	12,092	105	7,150	32,632	32,632
Additions to non-current assets				899	6	23	-	928	928

All turnover arose within the United Kingdom.

Consolidation adjustments relate to intercompany sales of generated electricity and the elimination of intercompany balances.

3. Non-underlying costs

Takeover bid

On 22 July 2021, Ecotricity announced the terms of its cash offer for the entire issued ordinary share capital of Good Energy Group PLC not already owned by Ecotricity, to be effected by means of a takeover offer under the Takeover Code.

The Board unanimously rejected the offer after considering this offer together with financial advisor, Investec Bank plc.

Ecotricity received valid acceptances of the offer representing approximately 11.5 per cent of the issued ordinary share capital of Good Energy. As such the takeover bid was rejected by Good Energy shareholders.

This process involved considerable third party legal and professional advice to ensure all provisions of the takeover code were adhered to. These costs incurred are not part of the ongoing and underlying success of the business and have been reported separately.

4. Finance Income and Finance Costs

Finance income:	2021	2020
	£'000	£'000
	Unaudited	Audited
Bank and other interest receivables	14	16
Gains on fair value adjustment	-	93
	14	109

Finance costs:	2020	2020
	£000	£000
	Unaudited	Audited Restated
On bank loans and overdrafts	3	2,782
On corporate bond	485	831
Other interest payable	-	38
Lease interest payable	69	327
Amortisation of debt issue cost	27	194
	584	4,172

5. Earnings per Ordinary Share

Basic

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number

of ordinary shares during the year, after excluding 250,880 (2020: 268,270) shares held by Clarke Willmott Trust Corporation Limited in trust for the Good Energy Group Employee Benefit Trust.

	2021	2020
	Unaudited	Audited
(Loss)/Profit attributable to owners of the Company (£'000)	(3,583)	146
Basic weighted average number of ordinary shares (000's)	16,399	16,350
Basic earnings per share	(21.8)	0.9

Continuing operations	2021	2020
	Unaudited	Audited

Profit attributable to owners of the Company (£'000)	2,157	146
Basic weighted average number of ordinary shares (000's)	16,399	16,350
Basic earnings per share	13.2	0.9

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares to assume conversion of all potentially dilutive ordinary shares. Potentially dilutive ordinary shares arise from awards made under the Group's share-based incentive plans.

Where the vesting of these awards is contingent on satisfying a service or performance condition, the number of potentially dilutive ordinary shares is calculated based on the status of the condition at the end of the period.

Potentially dilutive ordinary shares are dilutive only when the average market price of the Company's ordinary shares during the period exceeds their exercise price (options) or issue price (other awards). The greater any such excess, the greater the dilutive effect.

The average market price of the Company's ordinary shares during the year was 269p (2020: 184p).

5. Earnings per Ordinary Share (continued)

The dilutive effect of share-based incentives was 145,752 shares (2020: 395,679 shares). The dilutive effect of share-based incentives for continuing operations was 145,752 shares (2020: 395,679 shares).

	2021	2020
	Unaudited	Audited
(Loss)/Profit attributable to owners of the Company (£'000)	(3,583)	146
Basic weighted average number of ordinary shares (000's)	16,544	16,746
Diluted earnings per share	(21.8)	0.9

Diluted (continuing operations)	2021	2020
	Unaudited	Audited
Profit attributable to owners of the Company (£'000)	2,157	146
Weighted average number of diluted ordinary shares (000's)	16,544	16,350
Diluted earnings per share	13.0	0.9

6. Borrowings

	2021	2020
	£'000	£'000
	Unaudited	Audited Restated
Current
Bank and other borrowings	1,007	1,955
Bond	5,305	1,063
Lease liabilities	555	612
Total	6,867	3,630

	2021	2020
	£'000	£'000
	Unaudited	Audited
Non-current
Bank and other borrowings	-	33,405
Bond	-	16,331
Lease liabilities	317	3,695
Total	317	53,431

The Group has undrawn bank overdraft facilities of £nil (2020: £nil) as at 31 December 2021.

The current portion of the bond repayment represents the interest accrued and the amount of principal repayments requested prior to the end of the year. The latest redemption request deadline was in December 2021, for repayment of the remaining bond in June 2022.

The bank and other borrowings are made of interest accrued and amount of principal repayments under a Revolving Credit Facility. This has been fully repaid since year end, though the facility is still available.

7. Cash Generated from Operations

For the year ended 31 December 2021

	2021	2020
	£'000	£'000
	Unaudited	Restated
Profit before tax from continuing operations	1,834	2
Loss before tax from discontinued operations	(7,010)	-
(Loss)/Profit before tax	(5,176)	2

Adjustments for:
Depreciation	4,014	4,458
Amortisation	1,133	1,218
Impairment of assets	-	287
Impairment loss on remeasurement of discontinued operation to fair value less costs to sell	1,581	522
Loss on asset disposals & writedowns	182	25
Fair value adjustment of contingent consideration	-	(86)
Net gain on financial assets at FVTPL	-	(6)
Share based payments	-	39
Share of loss of associates	-	13
Other Finance (income)/costs - net	2,257	4,156

Changes in working capital (excluding the effects of acquisition and exchange differences on consolidation):
Inventories	5,582	(4,813)
Trade and other receivables	(10,441)	2,844
Trade and other payables	4,766	2,766
Cash generated from operations	3,898	11,425

8.Held for sale Generation Assets

On 24 November 2021, the Group publicly announced the decision of its Board of Directors to sell the Good Energy Holding Company No. 1 Limited group including its wholly owned subsidiaries ("GEGAN group"). The sale of GEGAN group was completed on 19 January 2022. At 31 December 2021 GEGAN group was classified as a disposal group held for sale and as a discontinued operation. The business of GEGAN group represented the entirety of the Group's Electricity Generation operating segment until 24 November 2021. With GEGAN group being classified as discontinued operations, the Electricity Generation segment is no longer presented in the segment note.

The results of GEGAN group for the year are presented below:
		Restated
	2021	2020
	£'000	£'000
Revenue
Revenue from contracts with customers	405	1,761
FiT/ROC subsidy revenue	2,109	1,232
Inter-segment revenue	5,974	5,786
Inter-segment adjustment	(5,974)	(5,786)
Total revenue	2,514	2,993
Cost of sales	(5,250)	(5,509)
Gross Loss	(2,736)	(2,516)
Administrative Expenses	(1,965)	(869)
Operating Loss	(4,701)	(3,385)
Net finance costs	(728)	(3,194)
Impairment loss on the remeasurement to fair value less costs to sell	(1,581)	-
Loss before tax from discontinued operations	(7,010)	(6,579)
Taxation benefit/(expense):
Related to pre-tax profit/(loss) from the ordinary activities for the period	1,270	-
Loss for the year from discontinued operations	(5,740)	(6,579)

In accordance with IFRS 5, inter-segment revenue between the discontinued group and the continuing business totalling £6.0m (2020: £5.8m) has been excluded from revenue. Without this adjustment, the loss before tax for the discontinued group would have been £1.0m (2020: loss before tax of £0.8m).

The major classes of assets and liabilities of the GEGAN group classified as held for sale at 31 December 2021 are, as follows:


	2021
	£'000
Assets
Property, plant and equipment	54,000
Right-of-use assets	4,280
Intangible assets	385
Restricted deposit accounts	866
Total non-current assets	59,531

Current assets
Trade and other receivables	1,253
Curr Tax Receivable	-
Cash and cash equivalents	2,175
Total current assets	3,428
Held for sale assets	62,959

Equity and liabilities
Capital and reserves
Revaluation Surplus	11,589
Reserves of a disposal group held for sale	(11,589)
Total equity	-

Non-current liabilities
Deferred taxation - NC	4,225
Borrowings - LT	33,665
LT Financial Liabilities	3,263
Provisions for liabilities	1,339
Total non-current liabilities	42,492

Current liabilities
Borrowings - ST	1,485
Trade and other payables	409
ST Financial Liabilities	302
Total current liabilities	2,196
Liabilities directly associated with assets held for sale	44,688
Total equity and liabilities associated with disposal group	44,688

Net assets directly associated with disposal group	18,271





Earnings per share	2021	2020
Basic, loss for the year from discontinued operations	(35.0)	(40.2)
Diluted, loss for the year from discontinued operations	(35.0)	(40.2)

Write down of property plant and equipment

The recoverable amount has been taken as the final agreed sale price subsequent to the sale completion of GEGAN group on 19 January 2022, less costs to sell. A write down of £1.5m was performed at the year end. This is primarily due to the revaluation method of valuation that the assets were held at pre-sale, requiring valuation at fair value at the Held for Sale date, followed by a valuation of fair value less costs to sell at the year end.

9. Subsequent Events

As previously announced in a strategic update on 25 November 2021, the Company appointed KPMG LLP to lead a sale process for the Company's entire 47.5MW generation portfolio. Following a competitive process, the disposal of the portfolio has been completed with Bluefield Solar Income Fund ("BSIF") who are advised by Bluefield Partners LLP.

The Disposal is for a total consideration of £20.4m. This consists of initial and deferred consideration elements:

· Initial consideration of £16.4m, less distribution since the lockbox date of £0.7m. Cash proceeds of £15.7m were received on completion.

· Deferred consideration of up to £8.1m, largely calculated with reference to an agreed financial model and based on the actual operational, technical, real estate and financial position of the projects.

· The final deferred consideration is £5.3m as announced on 25 February 2025. £4.8m has now been paid, with a further up to £0.5m to be paid on 30 June 2022, subject to Good Energy meeting all its payment obligations up to that date for power supplied by the Portfolio to it under the power purchase agreements.

· Of the £3.3m that will not be received, £2.3m arose due to the impact of a third-party energy yield assessment on the agreed financial model and £1m arose during detailed technical and financial due diligence.

· Total consideration received to date is therefore £20.7m, with an agreed final total consideration of up to £21.2m by 30 June 2022.

· The Company is now substantially debt free with a strong cash position, strengthening the Company's balance sheet.

· The 47.5MW generation portfolio provides around 15% of Good Energy customers' electricity and will continue to do so via existing power purchase agreements.

As announced on 14 January 2022, Ecotricity Group Limited requiring the Board to convene a general meeting of shareholders for the purpose of considering two resolutions, namely:

· an ordinary resolution to remove William Whitehorn from office as a director of the Company ("Resolution 1"); and

· a special resolution to direct the Board not to dispose of the Company's generation assets without shareholder approval ("Resolution 2").

The requisitioned General Meeting was held at 9am on Friday 11 February 2022 at SEC Newgate, 14 Greville Street, London, EC1N 8SB.

All voting was undertaken on a poll. The table below shows the votes received for and against each of the Requisitioned Resolutions.

	For		Against		Total		Withheld
Resolution	Votes	%	Votes	%	Votes	% ISC	Votes
1	4,581,943	41.7%	6,411,473	58.3%	10,993,416	65.5%	35,198
2	4,658,286	42.8%	6,226,697	57.2%	10,884,983	64.9%	143,631

Consequently, neither of the Requisitioned Resolutions received sufficient support from the Company's shareholders to be passed.

Zap-Map Board update

As announced on 10 March 2022, Nigel Pocklington has been appointed Chair of Zap-Map. He takes over the role from Good Energy Founder and Non-Executive Director Juliet Davenport, who steps down from the Zap-Map Board. Nigel bolsters the Board's expertise in building successful online platform businesses, together he and existing independent Non-Executive Director Tim Jones have a wealth of experience from leadership roles at AutoTrader, Moneysupermarket.com Group and Hotels.com.

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