eEnergy Group increases ownership in MY ZeERO platform
(AIM: EAAS ) says it has increased its ownership in the MY ZeERO smart metering and analytics platform from 51% to 85.5% “at a time of developing momentum.”
The digital energy services company previously increased its ownership in MY ZeERO from 37.5% to 51% in October 2021 after it completed ‘specific development milestones,’ it said.
eEnergy first invested in MY ZeERO in April 2021 after seeing an opportunity to integrate this type of proprietary energy analytics hardware and software into its Energy Efficiency division. The entity is held by its subsidiary, eEnergy Insights, which conducted today’s investment.
eEnergy also announced today that it has completed a restructuring of the eEnergy Insights’ (EIL) shareholder register in order to increase its economic share of the business and remove consent rights granted to minority investors under the
Shareholders Agreement. In addition, the restructuring will allow EIL to benefit from funding from the Group’s SVB debt facility.
Following a transfer (of their holdings of £196,500 of loan notes issued by EIL and 2,548 ordinary shares of 1p in EIL to the Group) and the issue of further equity in EIL at nominal value to eEnergy, the company’s interest in EIL will thus increase from 51.0% to 85.5%.
eEnergy highlighted that these new shares, as well as the shares previously issued to the same investors in October 2021, will be subject to a new lock in agreement until July 2023.
In regard to current trading, eEnergy outlined that the amount of meters under contract have increased by 33% to 522 since March 2022, resulting in an increase in contracted revenues to £781,000. The qualified pipeline of sales opportunities has also grown from £1.8m to £2.6m.
Commenting on this morning’s investment, Harvey Sinclair, Chief Executive Officer of eEnergy Group, told investors: “I am pleased to announce our increased ownership in MY ZeERO, our Smart Metering Analytics Business, at a time of developing momentum. We first invested in MY ZeERO in April last year as we recognised the opportunity to integrate this proprietary energy analytics hardware and software into our Energy Efficiency division.
He added: “We are pleased with the rollout of these new smart meters which give eEnergy a differentiated and valuable proposition in the market. The restructuring simplifies the ownership structure and allows for EIL to be further embedded into the Group’s operations.”
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Earlier this month, eEnergy reported strong new customer wins in the financial year to date across its two core divisions of Energy Efficiency and Energy Management, signing £8.6m of contract value across a broad range of Education, other Public Sector and C&I customers.
It stated that the momentum seen in 3Q22 had continued into the start of 4Q and that further increases in the new business pipeline were expected as energy users seeked to mitigate price increases through smart procurement, onsite generation and reducing consumption.
At 31 March 2022, contracted forward revenues had increased to £23m from £18m at 31 December 2021. £19.6m of this was related to energy management and £3.4m related to energy efficiency contracts. Around £8.3m of £23m is expected to be recognised in FY23.
In terms of outlook, eEnergy said it has a growing pipeline of new business opportunities across both of its Energy divisions which the company expects to convert during H1 FY23.
With eEnergy’s Ireland business having experienced longer Covid lockdowns, eEnergy found that there was slower than expected recovery post 1H. Meanwhile, customers entered into larger multi-service contracts resulted in longer conversion times from signing to installation
As a result, the Board is now expecting revenue and Adjusted EBITDA to be behind current market expectations for FY22 with revenue of around £23 million (up c. 70% from £13.6m in FY21) and Group Adjusted EBITDA of around £3m (up c. 250% from £0.8 million in FY21).
The Board said it plans to increase operational investment in FY23, in particular through eCharge and onsite solar generation, in order to capitalise on “enhanced long-term growth opportunities” presented by the energy crisis. As a result, it expects lower Adjusted EBITDA margins in FY23 than current expectations whilst still delivering improved margins over FY22.
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