TIDMINSE
RNS Number : 0588A
Inspired PLC
31 January 2022
31 January 2022
Inspired PLC
("Inspired" or the "Group")
Full Year Trading Update
Strong revenue growth driven by momentum in Energy Optimisation
Services
Inspired (AIM: INSE), a leading technology enabled service
provider supporting businesses in their drive to net zero,
controlling energy costs and managing their response to climate
change, is pleased to provide a trading update for the financial
year ended 31 December 2021.
Robust Group trading performance
The Board is pleased to report that Inspired expects to announce
revenue growth ahead of market consensus. This was driven by the
Energy Optimisation division gaining momentum through the second
half of the year, delivering a record revenue quarter for the
division in Q4 2021. Adjusted EBITDA is expected to be in line with
market consensus, with improvement in margin from H1 to H2 as the
Energy Optimisation division activity levels increased.
-- Group revenues are expected to be c.48% higher than 2020,
achieving organic growth of c.38% (FY 2020: GBP46.1 million).
-- Group Adjusted EBITDA* is expected to be c.55% ahead of 2020 (FY 2020: GBP12.8 million).
-- Underlying cash generated from operations increased
significantly in H2 2021 to c.GBP7.0m. Net debt at the year end is
expected to be c.GBP32.7 million (H1 2021: GBP30.2 million).
-- The acceleration in Energy Optimisation project delivery, in
particular in Q4 2021, drove an increase in trade receivables into
the year end. Management expects cash conversion ratios from FY2022
onwards to further improve, consistent with FY2020 levels, as the
Energy Optimisation division's trading profile stabilises.
-- Year-end Corporate Order Book stood at GBP67.5 million (2020: GBP63.0 million).
* Adjusted EBITDA is earnings before interest, taxation,
depreciation and amortisation, excluding exceptional non-recurring
items and share-based payments.
Operational and acquisition highlights
-- Name change to Inspired PLC, reflecting the transition of the
business to a technology enabled, ESG service provider, supporting
clients to manage their response to climate change and deliver net
zero carbon.
-- The Group is now structured across three divisions and four
reporting segments, all underpinned by long term structural growth
drivers:
- Inspired Energy - Energy Solutions (comprising two reporting
segments, Energy Assurance Services and Energy Optimisation
Services)
- Inspired Software - Software Solutions
- Inspired ESG - ESG Solutions
-- Integration of the acquisitions of Businesswise Solutions
Limited ("Businesswise") and General Energy Management Limited
("GEM") in March 2021 is progressing to plan, and both businesses
are performing in line with management expectations further
increasing Inspired's market share in Energy Assurance
Services.
Current trading and positive outlook
2021 was a year of significant progress across the Group, with a
strengthened platform capable of generating long term growth as the
business' end markets continue to recover from the pandemic.
The global energy crisis has highlighted energy as a high
priority board level topic. The Group continues to proactively
respond to this, working tirelessly to support clients manage
energy prices and reduce their energy consumption and carbon
emissions during these unprecedented times.
Energy Assurance Services trading in the year remained in line
with expectations as the Group continued to deliver on its strategy
to broaden its customer base and significantly increase its units
of opportunity with energy consumption levels increasingly
recovering to pre pandemic levels.
Although Group revenues and profits are not directly impacted by
changes in energy commodity prices, record high commodity prices
are influencing the timing at which the Group's customers renew
their contracts, including the duration of contract renewals;
clearly this impacts the size of the Group's Order Book. Despite an
absolute increase in the order book due to the contribution of the
acquired order books, the impact of high energy prices has led to
the underlying orderbook contracting during the year. Management
observe this is a point of timing as to when customers will renew
and the duration of those renewals, with customer retention
remaining strong during the year.
The Group's Energy Optimisation Services division gained
momentum throughout 2021, which further accelerated in H2 2021,
following the lifting of Covid related restrictions which had
impeded access to sites. The period delivered profits in line with
expectations, with revenues generated above expectations. Lower
margins during the first half of 2021 reflected the impact of
restrictions on the trading performance of the division, with the
benefits of the investment made into the division reaped during the
second half of the year as activity levels increased, with the
Group benefitting from the higher utilisation rates. Demand for
energy optimisation services continues to increase, with strong
underlying drivers, including high commodity prices and the drive
to net zero.
The acceleration of Energy Optimisation project delivery into
the latter part of the year drove an increase in trade receivables
at the period end. At the time of the half-year results, the Group
referenced an increase of GBP5.3m in trade receivables in that
period, the majority of which related to delayed payments from a
small number of significant optimisation customers, predominantly
in the public sector. 70% of this balance has been received so far,
and measures are in place to recover the remaining 30% during H1
2022.
Software Solutions and the recently launched ESG Solutions
divisions continue to develop well. ESG Solutions generated
revenues of c.GBP1.0 million in its first full year of operation,
reflecting the growing market for these services. The increasing
focus of investors and businesses on net zero carbon targets,
combined with mandatory requirements for businesses to make ESG
disclosures from 2022, provides a favourable backdrop to continue
to invest in the strategy for the Inspired ESG division.
The strong growth of the Group's revenues, and adjusted EBITDA
in the year, coupled with a strengthened platform capable of
generating long-term growth, underpins the Board's confidence in
achieving its financial goals, strengthened by the secular trend
towards greater ESG focus and sustainable energy usage.
Commenting on the results, Mark Dickinson, CEO of Inspired,
said: "With the changing landscape, we are delighted to report on a
period of strong growth at Inspired, both financially and
operationally. The performance in 2021 reflects the continuing
recovery in energy consumption, alongside a return to on site
access to client premises, accelerating the delivery and
implementation of energy optimisation services.
"We are encouraged by the current execution of the business plan
within the ESG Solutions division, which is gaining good traction
and we expect further progress during 2022.
"The transition to Inspired PLC has enabled us to strengthen our
market position as we help our clients respond to the Climate
Emergency whilst controlling their costs. Looking ahead, the Board
remains confident in achieving its objective of evolving into the
leading provider of services to help businesses respond to climate
change and meet their net zero targets."
Enquiries please contact:
Inspired PLC www.inspiredplc.co.uk
Mark Dickinson (Chief Executive Officer) +44 (0) 1772 689250
Paul Connor (Chief Financial Officer)
Shore Capital (Nominated Adviser and
Joint Broker)
Dru Danford
Patrick Castle
James Thomas +44 (0) 20 7408 4090
Peel Hunt LLP (Joint Broker)
Mike Bell
Ed Allsopp +44 (0) 20 7418 8900
Alma PR +44 (0) 20 3405 0205
Justine James +44 (0) 7525 324431
Hannah Campbell inspired@almapr.co.uk
Molly Gretton
Notes to editors
Inspired PLC is a leading technology enabled service provider of
energy advisory and sustainability services, supporting businesses
in their drive to net zero, controlling energy costs and managing
their response to climate change.
Founded in 2000, Inspired operates three divisions: Energy
Solutions (Assurance and Optimisation), Software Solutions and ESG
Solutions, providing expert energy advisory and sustainability
services to over 3,400 businesses in the UK and Ireland who
typically spend more than GBP100,000 on energy and water per
year.
Inspired has been recognised with the London Stock Exchange's
Green Economy market since 2020 for its environmental and strategic
advice, service, and support to customers and is also ranked as the
UK's leading advisor by the independent energy market intelligence
consultancy, Cornwall Insight.
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END
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January 31, 2022 01:59 ET (06:59 GMT)
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