Interim Results to 30 June 2012€¦ · – Flexi • Bill validation and bureau service •...
Transcript of Interim Results to 30 June 2012€¦ · – Flexi • Bill validation and bureau service •...
Interim Results to 30 June 2012
Janet Thornton - Managing Director David Foreman - Finance Director
28 August 2012
Group Overview
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• An established leading provider of energy purchasing and management solutions consisting of:
– Inspired Energy (Inspired) founded in June 2000 by MD, Janet Thornton
– Direct Energy Purchasing (DEP) founded in 1996 by MD, Corin Dalby
• Manages over 1,000 contracts for energy procurement on behalf of over 600 UK corporates
• Delivers bespoke buying strategies, market intelligence, effective negotiation and extensive contract management solutions, all of which are developed and tailored to client specific needs
• Raised £3.4 million in a placing on Admission, which was over subscribed
• £3.5m of acquisition finance
• Raised a further £1.0m of equity (over-subscribed) in April 2012 to part finance the acquisition of DEP
• Acquired DEP in April 2012
• Continue to seek complimentary acquisitions
Fast
growing energy
consultancy
Over 60 employees
across 2 offices
Over 5 billion kWh
managed annually (5 TWH)
Over 600 clients
Admitted to AIM: 28 November 2011
Market cap £14.6 million at 3.62p
Shares in issue: 404.15 million
TIDM: INSE
Sector: Support Services
By managing market risk and providing
effective and innovative procurement
strategies Inspired has become the leading
expert in a complex market.
Why Inspired Energy
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Unique Approach
• Customer-centric approach backed by vigorous supplier negotiation
Supplier Relations
• Excellent relationships with all major suppliers ensure aggressive pricing and swift issue resolution
Exclusive Products
• Access to exclusive products, unavailable to end users or other brokers
Customer Retention Over 70%
Main Divisions & Services
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Risk Management
Fundamental Analysis
Technical Analysis
Market Reporting
Gas and Electricity Trading
Price Optimisation
Analysis & Account Management
Customer Relations
Fixed Price Contract Tendering
Supply Contract Negotiation
Bureau & Projects
Data Collection
Bill Verification
Energy Reporting
Site works
Renewable Energy Projects
Group Overview
• Energy procurement and consultancy
– Fixed
– Flexi
– Risk Managed
• Bill validation and bureau service
• Energy intensive SMEs
– Food manufacturing (Muller)
– Foundries (BI Group)
– Heavy industrial (Bombardier)
• Single/Limited site operations
• UK only
• Focus on North and Midlands ~ manufacturing bias
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Inspired
Core Customers
Core Geographies
• Energy procurement and consultancy
– Fixed
– Flexi
• Bill validation and bureau service
• Non-intensive, large corporates
– Healthcare
– Specialty retail
• Complex multi-site operations
• UK only
• Greater exposure to Southern UK
DEP
Core Products
H1 Highlights
• Overall financial performance, including DEP, in line with management expectations
• Record six months of order book sales of £2.9m (2011: £1.9m) and increase of 53%
• Inspired order book of £5.5m as at 30 June 2012 (2011: £4.0m) increasing 38%
• Total order book, including secured contract values of DEP clients, of £7.9m as at 30 June
2012
• Accelerated and completed planned staff expansion with several high quality hires
• Secured additional exclusive contracts with chosen energy suppliers through to 2015
• Successful implementation of new IT systems across majority of business processes
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Growth Strategy
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• Clear, defined organic growth strategy, augmented by acquisitions
• Acquisitions must add capability – focus on technical
New Customers
New Geographies
New Services • Increase share of wallet by increasing value-add services to clients • Range of services being increased by key hires and/or acquisitions
• Expand geographic reach, principally in the UK but with potential for client-led internationalisation
• Pursue larger clients, up to a threshold level • Increase penetration in non-manufacturing sectors • Develop sector specialisms and penetration
Increased Awareness • Increase market presence, including market knowledge of skill base
present within the Inspired team
Acquisition and Integration of DEP
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• DEP in line with expectations
• Integration progressing well
Integration of DEP
Finance
Staffing
Performance • In line with management expectations • Acquisition has provided increased impetus to drive new sales
• Full review of operational roles and responsibilities with higher focus on creating new sales opportunities (New Business Director and introduction of telesales operations)
• Intention to include key staff within the Inspired share options scheme
• Financials integrated into Inspired’s systems • Running management accounts in parallel with external accountants in short term
New Products • Negotiated and agreed a unique ‘budget defender’ product for the non-
half-hourly customers that DEP services
System • Introduced new sales lead system to DEP – allowing dedicated telesales
operations from Bolton office • DEP bureau system in operation across entire Group
Investment in Talent
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• Market conditions and increased awareness following Admission allowed Inspired to attract and recruit high calibre new employees at a rate quicker than planned
• New employee recruitment focused on:
– New sales (1x field sales, 2x analysts and 3x telesales)
– New products (Andrew Stubbs and Nick Campbell)
• Effect of new employees seen through:
– Record levels of new sales (increase of 53% on 6 month period to June ‘11)
– New product launches (more detail on next slide)
– Increased employee costs in period but limited impact on revenues to date
(60,000)
(40,000)
(20,000)
-
20,000
40,000
60,000
80,000
100,000
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
ExampleAnalystProfit/CashCurve
CashCurve ProfitCurve RestatedCashCurve RestatedProfitCurve
1,935 1,859
2,926
0
100
200
300
400
500
-
500
1,000
1,500
2,000
2,500
3,000
3,500
H111 H211 H112
SalesPerformance
Value Deals
New Product Development
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• Focus on developing new products and revenue streams
• Developed in-house or in conjunction with key partners
New Products
Power Purchase Agreements
Historical Audits
Climate Change Agreements
• Consultancy and advice on compliance burden • Advice on retention of discounts from climate change levy and reduction of
CRC payments
• Increased knowledge and system capability increases ability to find significant errors on historic bills
• Operated on a share of findings basis
• First 500 kW wind turbine scheme achieved • Trading green energy certificates on behalf of renewable energy producers
Open Market
• Pilot project based on ability to trade between bid/offer spread in illiquid energy market
• Share of savings model, piloted with key supplier and certain risk managed clients
FSA Registration • Seeking to gain FSA authorisation for part of the business (Trading Team) • Quality assurance, and can be a procurement pre-requisite for very large
users
Investment in IT
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Online, Integrated Telesales CRM
• Integrated, bespoke call scheduling, monitoring and CRM system
• Doubled the level of active, qualified leads produced by call centre per month
• Increased ‘on-call’ time within team and improved reporting and accountability
• Extended into DEP with promising results
Group-wide Bureau System
• Acquired with DEP, Systemlink has been integrated throughout Group
• Increased reporting and monitoring system, particularly for complex client structures
• Increased automation of data entry
Phase 2
• Significant progress on next phase of our IT strategy
• Fully integrated, end to end platform for the entire life cycle of our client’s procurement and trading strategies
• Significant reduction in human repetition
• Increased robustness of platform on which to continue our growth
Income Statement
• 2 month contribution from DEP consolidated within the above
• Revenue increase of c. 43% despite significant lag in revenue recognition from new sales
– Of £4.6m order book sales since October 2011, revenue recognised of c. £250k in period
• Significant increase in admin expenses
– Increased staff costs (c. £400k)
– Plc costs
• In line with management expectations 12
Unaudited Income Statement (£’000) 30 June 12 30 June 11
Turnover 2,126 1,482
Gross Profit 2,008 1,342
Administrative Expenses (950) (467)
Earnings before fees associated with acquisition and depreciation
1,058 884
Profit before income tax 541 898
Adjusted EPS 0.19 0.22
Group Statement of Financial Position
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Unaudited Statement of Financial Position (£’000) 30 June 12 30 June 11
Intangible Assets 2,812 -
Fixed Assets 184 74
2,996 74
Current Assets
- Trade and Other Debtors 1,609 1,268
- Cash 944 1,035
2,553 2,303
Total Assets 5,549 2,377
Current Liabilities
- Trade and Other Payables 303 315
- Bank Borrowings 524 -
- Contingent Consideration 1,000 -
- Current Tax Liability 804 420
2,631 735
Non-Current Liabilities
- Bank Borrowings 2,590 -
- Deferred Consideration 501 -
- Deferred Tax Liability 402
- Other 9 28
3,495 28
Net (Liabilities)/Assets (83) 1,614
Cash Flow Statement
• Cash investment in period due to:
– Increased commissions on 53% sales growth in period (c. £100k)
– Acquisition of DEP
– Bank debt repayment (£245k)
– Corporation tax (£243k)
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Unaudited Statement of Cash Flows (£’000) 30 June 12 30 June 11
Profit before income tax 541 898
Cashflows before changes in working capital an exceptionals 1,118 907
Increase in trade and other receivables (303) 45
Increase in trade and other payables (321) 114
Cash generated from operations before exceptionals 493 1,044
Net cashflows from operating activities (114) 21
Cashflows from investing activities (132) (88)
Cashflows from financing activities (358) -
Net (decrease)/increase in cash (314) 861
Outlook • Momentum in sales performance as we build on record sales in H1
– Existing customers – New customers
• DEP acquisition has performed well and in line with expectations
– Integration of people and systems to plan – Introduction of new product innovation will benefit DEP client base
• Expanded senior analytical team and continued investment in IT systems to improve
efficiencies and service offering
• Increased focus on new product development: – Climate change agreements – Power purchase agreements – Historical audits – Open market pilot project
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Inspired well positioned for further growth
Some of our Clients
www.inspiredenergy.co.uk 16
ENERGY MANAGEMENT FOR THE COMMERCIAL WORLD
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Inspired Board
•Bob has a background in developing support service businesses and has operated in the support services sector since 1981, initially in a financial capacity before moving into general management.
•Bob is Chairman of Mears Group PLC (MER.L) and Non-Executive Chairman of Green Compliance plc (GCO.L) and a director of a number of other businesses
Bob Holt
Non-executive Chairman
•Following a successful career with a number of energy consultancies such as PCMG, McKinnon & Clarke and Utility Auditing, Janet founded Inspired in 2000
•In addition to her day-to-day management of the company, Janet is responsible for supplier relationships and product development, giving Inspired Energy the opportunity to create bespoke, exclusive supply contracts for clients.
•Janet still negotiates supply contracts for significant energy users such as United Castbar Limited, Mexichem UK Limited, TMD Friction UK Limited and Seven Seas Limited
Janet Thornton
Managing Director
•David Foreman was previously Head of M&A for Lifestyle Services Group, part of the 4U Group of Companies, owned by B.C. Partners. Prior to that, he was an assistant director at Altium Capital Limited, specialising in private equity, banking advisory and public company advisory
•David is a Chartered Accountant, having trained with KPMG
•He is also co-founder and partner of Praetura Capital LLP, a business specialising in venture investment and corporate advisory, which was incorporated in 2011
David Foreman
Finance Director
•After a successful career in technical recruitment Matthew joined IES in 2002. In 2005, he established Inspired Energy’s ‘risk managed’ division, which to date has advised on the procurement of energy on behalf of customers with a supply contract value in excess of £100 million
•Matthew and his team have a 100 per cent client retention rate in this division, which includes customers such as Bombardier Transportation UK Ltd, Brenntag Group, Interfloor Limited and Wedge Group Galvanizing Limited
Matthew Thornton
Sales Director
•Previously a managing director of investment bank Altium Capital Limited, he has over 10 years’ experience in M&A and corporate finance.
•Mike has advised a wealth of clients ranging from public companies, private equity houses and entrepreneurs.
•In 1999 he completed his training with PwC and qualified as a Chartered Accountant.
•Mike is a co-founder and partner of Praetura Capital LLP, a business specialising in venture investment and corporate advisory, which was incorporated in 2011
Mike Fletcher
Non-executive Director
www.inspiredenergy.co.uk 18