TIDMGOOD
RNS Number : 5154D
Good Energy Group PLC
22 June 2023
22 June 2023
Good Energy Group PLC
("Good Energy" or "the Company")
Acquisition of Wessex EcoEnergy Limited
Good Energy Group PLC (AIM: GOOD), the 100% renewable
electricity and energy services provider, is pleased to announce
that it has acquired the entire issued share capital of Wessex
EcoEnergy Limited ("Wessex"), an established UK based solar
installation business (the "Acquisition"), on a debt free, cash
free basis for an initial consideration of GBP2.5 million.
Building on its acquisition of Igloo Works in December 2022, the
Acquisition represents a further milestone in delivering on Good
Energy's strategy to expand its capability in decentralised energy
services, complementing its established energy supply business and
heat pump installation capability. It also supports Good Energy's
ambition to help one million customers cut carbon by 2025.
Strategic highlights
-- Continued progress against Good Energy's ambition to be the
UK's leading provider of green energy services, with the ability to
install green energy infrastructure and provide the best tariffs
for the energy produced by its customers.
-- Having established itself as a solar installer since
acquiring Igloo Works, this transaction takes Good Energy's solar
installation capabilities to the next level. The Company is
positioned to offer premium solar installs, benefiting from the
ongoing rapid growth in demand for solar power. The UK solar market
has seen near record levels of growth through 2022 as energy prices
remained high.
-- Installs increased over 125% to 132,000 and this trend has continued in 2023.
-- Domestic installs accounted for 88% of the volumes in 2022,
as people looked to shield themselves from elevated energy
costs.
-- We anticipate this market is to grow by 9.9% CAGR to 2030.
-- Wessex will report under Good Energy services division and
continue to operate under its own brand. Wessex will benefit from
now being able to offer a full energy service package including
solar, storage, heat and export tariffs for its customers. Services
will be marketed to both Good Energy's existing 270,000 customers
and new prospects focused in the South West of England.
-- Wessex is a registered MCS, RECC and Tesla Energy Certified
solar installer and service provider, based in Dorchester, for
domestic and commercial customers with an established team of
engineers, technicians, and operations specialists. It has a strong
brand predominantly covering the South West of England and a proven
track record of high-quality installs with a 5* Google review
rating. It completed 155 installs in 2022 and following the
acquisition will be targeting 600 panel installations per month
within 18 months.
-- The Acquisition builds on Good Energy's existing energy
service offering across other product areas including heat, storage
and electric vehicles. Good Energy will seek to accelerate growth
in these areas through further bolt-on acquisitions.
Transaction highlights
-- Good Energy has acquired 100% of Wessex's issued share
capital for an initial consideration of GBP2.5 million, payable in
cash on completion (the "Initial Consideration"). Deferred
consideration of up to GBP1.5m is payable in cash by Good Energy
dependent on the achievement of certain financial and non-financial
milestones, over an 18-month transition period to 31 December 2024.
These are split broadly equally across service quality, management
transition, increased installation capacity and earnings run
rate.
-- Day 1 Initial Consideration price at a less than six times
EBITDA multiple based on forecast 2023 earnings. Revenue for the
year to 31 October 2023 remains on track to exceed GBP4m.
-- For the financial year ended 31 October 2022, Wessex reported
sales of GBP2.2 million and a net profit of GBP0.3m. Gross assets
as at 31 October 2022 were GBP0.8m.
-- The new business plan will see the balance of 2023 and the
first half of 2024 as a period of investment as we look to double
the installation capacity of Wessex. Elevated installation capacity
is expected to drive material earnings accretion from 2025,
leveraging corporate overheads to deliver effective customer
acquisition and cost to serve.
-- Working capital will be required over the coming 12 months to
accelerate investment in people and marketing to allow the business
to scale. Good Energy expects to invest GBP0.5m in working capital
to reach this point.
-- The Initial Consideration, rest of the working capital and
any future pay-outs will be funded through the Company's existing
cash resources.
-- The Acquisition is expected to be marginally EPS accretive in
the first full year of ownership and materially accretive in the
year ending 31 December 2025.
-- Wessex EcoEnergy was founded in 2014 by Daniel Cole and
Martin Hawkins, who are the majority shareholders. Both will remain
with the business on completion. Daniel has over 24 years'
experience in sales and senior management roles in telecoms,
internet, SAAS and solar energy sectors. Martin is a Chartered
Engineer specialising in Naval Architecture and an experienced
Project Manager, Martin has a proven track record of delivering
multi-million pound engineering projects. Martin has a passion and
skill for property renovation as well as cutting-edge ecological
technology.
Nigel Pocklington, Chief Executive Officer of Good Energy,
said:
"Good Energy is fast becoming the UK's go-to all-in-one solar
service company. We have the second largest solar generating
customer base, paid out a record amount for solar power last year
and have launched market leading smart export tariffs. Bringing
Wessex into the business accelerates our solar and storage
installations business, as the solar surge which saw installs grow
125% in 2022 continues.
"Not only does Wessex ECOEnergy's purpose align with Good
Energy's, its premium, trusted positioning in the South West aligns
with Good Energy too.
"There is a GBP5 to GBP10 billion growth opportunity in clean
energy technology installations among climate conscious consumers.
With our trusted legacy and green-motivated existing customer base
we are positioned to be a major player in this, and are already
kitting out homes with heat pumps, solar and batteries. Now we're
supercharging our solar services."
Enquiries
Good Energy Group PLC
Nigel Pocklington, Chief Executive
Charlie Parry, Director of Corporate
Strategy & Investor Relations
Ian McKee, Head of Communications Email: 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)
Henry Reast / James Rudd Tel: +44 (0) 20 7597 5970
Canaccord Genuity Limited (Joint Broker)
Henry Fitzgerald - O'Connor / Harry Rees Tel: +44 (0) 20 7523 4617
About Good Energy www.goodenergy.co.uk
Good Energy is a supplier of 100% renewable power and an
innovator in energy services. It has long term power purchase
agreements with a community of 1,700 independent UK generators.
Since it was founded 20 years ago, the Company has been at the
forefront of the charge towards a cleaner, distributed energy
system. Its mission is to power a cleaner, greener world and make
it simple to generate, share, store, use and travel by clean power.
Its ambition is to support one million homes and businesses to cut
carbon from their energy and transport used by 2025.
Good Energy is recognised as a leader in this market, through
green kite accreditation with the London Stock Exchange, Which? Eco
Provider status and Gold Standard Uswitch Green Tariff
Accreditation for all tariffs.
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END
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