UTW Utilitywise

TIDMUTW

RNS Number : 4916D

Utilitywise plc

27 October 2015

27 October 2015

Utilitywise plc

("Utilitywise" or the "Group")

Favorable change to payment terms with existing supplier

Utilitywise plc (AIM:UTW), the leading independent utility cost management consultancy, is pleased to announce an important and immediate change to its existing payment terms with a key energy supplier.

Following ongoing discussions, the supplier has agreed to amend its terms such that any extension secured on a contract that has not expired receives the same payment terms as a new customer would, in this case 80% on the extension signing and 20%, subject to the normal reconciliation process at the end of that contract. We have also agreed that this change of terms will apply to historic accrued revenue balances and hence we have as of today received GBP3.6 million in cash from the supplier. This amount represents approximately 13% of the accrued revenue balance due within one year at 31 July and approximately 13% of the accrued revenue balance due after one year at the 31 July.

As a result of our strengthening supplier relationships and the prevailing energy price environment, the length of the contracts we are securing for our customers has increased. Whilst the Group remains focused on acquiring new customers to drive growth, we have also prioritized securing existing customers on longer contracts with their incumbent energy suppliers, either as renewals or extensions to the initial contract. Historically our supplier payment term for this contract revenue was delayed until the extended period had commenced and was booked to accrued revenue on the balance sheet.

Discussions are ongoing with all of our key energy suppliers to amend payment terms to reflect the changing way that we are doing business, with the aim of agreeing revised terms resulting in the receipt of payment for renewals and contract extensions in a similar way to the revised terms detailed above

Geoff Thompson, Chief Executive of Utilitywise, commented:

"Securing this change to more favorable payment terms demonstrates both the strength of the relationships we have with our key suppliers but also our ability to meet changing market sentiment.

The recognition by our supplier to treat a contract extension in the same way it does for a new customer acquisition is very positive and addresses a concern that the revenue was being booked in advance of the payment of our commissions. It has also resulted in a cash payment to the Group of GBP3.6 million, with a consequential reduction in our accrued revenue balance of the same amount.

Whilst this amendment to payment terms with one of our major suppliers is very welcome, we are in ongoing discussions with all our other key energy suppliers and will update the market as and when we are in a position to do so."

For further information:

 
 Utilitywise plc                         0330 303 0233 
 Geoff Thompson (CEO) 
 Jon Kempster (CFO) 
 
 finnCap (NOMAD and broker)              020 7220 0500 
 Matt Goode/ Grant Bergman (Corporate 
  Finance) 
 Simon Johnson (Corporate Broking) 
 
  Liberum (Joint broker)                   020 3100 2000 
 Robert Morton/ Steve Pearce 
 Redleaf Communications                  020 7382 4763 
 Emma Kane/ Richard Gotla 
 

About Utilitywise

Utilitywise is a leading independent utility cost management consultancy based in North Tyneside. The Group has established trading relationships with a number of major UK energy suppliers and provides services to its customers designed to assist them in achieving better value out of their energy contracts, reduced energy consumption and lower carbon footprint.

Businesses large and small rely on Utilitywise for their energy management needs. Clients range in size from single site SME's to multinationals with thousands of sites and cover the whole of the UK. In total, Utilitywise has over 27,000 customers.

Utilitywise is a UK company quoted on the AIM market of the London Stock Exchange. For more information, please visit www.utilitywise.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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