First Day of Dealings on AIM
Posted on: 30.07.2012
Good Energy Group PLC, owner of Good Energy Limited, the UK’s leading 100% renewable electricity supplier, is pleased to announce its admission to trading on AIM.
Further to the Company’s announcement on 25 July 2012 and following admission to AIM, the Company has raised £4 million before expenses by way of a placing of 4,705,882 new Ordinary Shares at 85 pence per Ordinary Share, which based on the placing price gave it a market capitalisation of £10.6 million on admission. The Placing was conducted by N+1 Brewin, the Company’s Nominated Adviser and Broker.
Following Admission, completion of the Placing and the sale of £2.7 million of the Company’s Renewable Obligation Certificate inventory, the Company will have approximately £8 million of cash on its balance sheet.
Dealings in the Company’s Ordinary Shares of 5 pence each will commence at 8 a.m. today, under the ticker symbol “GOOD”. Following admission the Company will have 12,522,649 Ordinary Shares in issue.
Juliet Davenport, Chief Executive Officer of Good Energy Group PLC said:”This is a natural next step for Good Energy. AIM provides better liquidity for our existing shareholders and allows us to reach institutional shareholders for the first time. We look forward to continuing to grow both our customer base and our own generation capacity as renewables become an increasingly important part of the UK’s energy mix. ”The information below is extracted from the Company’s AIM Admission Document dated 25 July 2012 which will shortly be available on the Company’s website, www.goodenergygroup.co.uk.
Introduction to Good Energy Group PLC
The Company and its subsidiaries (the “Group”) are a vertically integrated utility, supplying 100 per cent. renewable electricity to approximately 30,000 domestic and commercial customers, gas to approximately 6,700 domestic customers and supports a growing community of approximately 38,500 independent green power generators across the UK. The Group also has a renewable electricity generation business which includes a 9.2MW operational wind farm in Cornwall, and a proposed 4.6MW wind farm in Aberdeenshire, currently in planning.
The Group was founded in May 2000 to lower UK carbon emissions by developing and distributing renewable electricity within the UK. The Group divides its activities into three key business segments: the supply of electricity and gas, renewable power generation, and FIT administration.
One of the Group’s key purposes is to provide individuals and companies in the UK with a means by which they can reduce their contribution to the causes of climate change through selecting the Group to be their energy supplier.
The Directors believe that the key strengths of the Group include the following:
- Rapidly growing and high profile sector;
- Well established branded business with seven years of continuous growth;
- Highly qualified, motivated and experienced management team;
- Deep knowledge of renewable supply and generation sector and related policy;
- Proven and successful relationships with its customers;
- Scalable business model;
- Proven ability in repowering and developing wind and heat projects; and
- Financially mature business model demonstrated through active dividend policy.
Medium and Long-term Strategy
Good Energy Group PLC’s subsidiary, Good Energy Limited, is the UK’s leading 100 per cent. renewable electricity supplier and its medium and long term strategy is to continue to supply 100 per cent. renewable sourced electricity.
To support this, the Group plans to generate around 50 per cent. of its own electrons and, therefore, has set a medium term target of owning and operating 110MW of renewable generation assets. Once the 50 per cent. target has been attained, the Group aims to continue to develop renewable assets to maintain this percentage as the supply side of the business grows. Currently the assets that the Group is focusing on are onshore wind and large scale solar. Going forward the Directors will consider small scale hydro and a limited number of bio-generation technologies as well.
Longer term the Directors will also look at developing further renewable assets in the heat sector and are developing a renewable heat strategy. This will support the carbon offsets required for the certification aspect of the Group’s electricity business. The Group aims to continue being a preferred partner for managing smaller generators. Since this market has expanded significantly under FIT to over 320,000 installations in the UK, the Directors believe there continues to be opportunities to provide services directly to generators, and potentially on an outsourced basis to utilities.
The Group plans to grow its customer base and increase its rate of growth of electricity and gas customers from a combined 18 per cent. annualised rate, through a combination of pricing, marketing and sales strategy.
The final area of innovation the Group is considering is around developing tariffs, particularly load shifting tariffs and local tariffs. The Group is considering how these may support the management of variable and weather dependent generation and the opportunities that may arise in demand side management and trading.
The Group’s key priorities for 2012 include:
- Further development of the customer base for electricity, gas and FIT customers;
- Continuing to develop the Generation business by identifying additional wind and solar opportunities, and looking at other technologies including small hydro and bio-generation;
- Launching a new in-house customer relations system to further enhance the Good Energy ‘experience’ and allowing the development of unique tariffs around the Group’s 100 per cent. renewable electricity trading portfolio;
- Developing opportunities to provide FIT administration services to other organisations; and
- Finalising research and piloting both demand side and local community tariffs.
Summary Financial Information
The following table is a summary of the Group’s combined and consolidated financial information:
|Year ended||31st December 2009
|31st December 2010
|31st December 2011
|Profit Before Tax||663||705||1,056|
As announced on 25 June 2012 in the Group’s latest trading statement, Juliet Davenport, Chief Executive Officer said:
“We are on course for a strong performance in the first half of 2012, and expect this momentum tocontinue for the rest of the year. We are pleased to see progress across all key areas of the business with a combined annualised growth rate for gas and electricity customers of 18 per cent., resulting in over 75,000 gas, electric and generation customers.”
Use of Proceeds
The Group intends to use the net proceeds of the fundraising to continue, and accelerate, the development of the Group in each of the following areas:
- Marketing and brand awareness – development of new partnerships with national membership organizations and increase in local and national advertising to improve brand awareness;
- Trading – further development of the Group’s trading platform and credit lines to enable its trading team to improve trading margins across all technologies; and
- Asset development – expansion of the Group’s asset development portfolio including onshore wind and large scale solar projects.